Help for wool woes

Traceable wool is marketed as a luxury item. Photo / Daily Post

Kiwi farmers are earning a premium of up to $2/kg for their wool, thanks to agreements such as the deal struck this week with coffee chain Starbucks.

Starbucks is to use a new upholstery fabric called "WoJo", made of New Zealand wool and recycled jute coffee sacks, in some of its stores in Europe.

The product was designed by Wellington company The Formary and 70 per cent of the fabric is made from a high-quality, traceable New Zealand wool brand called Laneve.

Laneve is part of a strategy by wool supply and marketing company Wool Partners International to reposition the fibre as a luxury product which commands a premium price, improving returns for beleaguered farmers.

WPI chief executive Iain Abercrombie said the strategy was paying off.

The deals WPI was doing with manufacturers and retailers around the world varied but Laneve was earning farmers 50c to $2/kg more than the auction price for carpet wool.

Carpet or strong wool prices are currently about $4.40.

Earlier this month, WPI announced a deal with large European flooring distributor Headlam, that it believed would increase New Zealand's strong wool sales by more than 2 million kg a year - equal to 2 per cent of the national clip.

Initially, Headlam had been interested in WPI's other brand, the Wools of New Zealand quality mark, but the deal was also earning farmers an additional royalty, Abercrombie said.

It also hoped to sign several other European deals in coming weeks.

The timing of the Starbucks and Headlam agreements "couldn't have been better" as WPI was about to go to farmers with an offer to join its associated co-operative, Wool Grower Holdings. At the heart of its strategy is the need to consolidate the wool clip and sign exclusive supply deals with farmers.

WPI is competing with rival wool company Elders Primary Wool, which also has a farmer co-operative and a luxury brand, Just Shorn.

Both brands are high-quality wool that is traceable to the individual farm that grew it.

Abercrombie said while the volumes involved in the Starbucks deal were not yet significant it demonstrated what was possible and there were already other opportunities in the wind.

"It's not going to solve the New Zealand wool [industry's] problems overnight but it's a significant contract with a high-profile company that will get this fabric known and get other people interested."