Wools of New Zealand and PGG Wrightson team up to boost wool supply chain efficiency
Wool farmers are hoping that efforts by two leading companies to develop a more efficient supply chain would eventually boost farmgate returns.
“There is now a real pathway to farmgate prices rising,” the farmer co-operative’s chief executive John McWhirter told Rural News.
He says the company’s strategy is to capture more value for its 2,000 grower shareholders.
“The merger was never going to change the fundamental problem of the wool industry or the price of wool. However, for the first time, we now have an integrated value chain from the grower through to the consumer.”
He adds the merger was about bringing two wool companies together and adding more resource to invest in the consumer goods business. McWhirter says that wool carpets account for a greater proportion of WNZ’s partners’ retail sales than ever before.
“This rising demand is a clear indicator that more New Zealanders are considering sustainable floor options for their homes.”
McWhirter says currently there is around a 5-7% over supply of wool compared to the demand for wool, which is around 45,000 bales.
“If we can increase the demand for wool by 45,000 bales – then the price of wool will go up as supply and demand kicks into place.”
He says the faster they can grow the sales of wool carpet within NZ and internationally, the faster they will increase the price of wool at the farmgate.
McWhirter says demand for wool is now starting to increase.
“For the first time in 20 years, in the last 12 months, wool carpet stopped declining and actually grew.”
He says wool carpet sales grew in NZ last year by 25% - from 14% to 18%. However, this is a long way back from where it was in the mid-1990s, when wool carpets made up about 90% of floor coverings sold in NZ.
Wool’s of NZ is rolling out a commercial and brand campaign, which McWhirter says showcases farmer-suppliers and highlights wool carpet’s natural and durable attributes as well as its affordability.
“We’re ramping up branded consumer product sales, driving operational excellence into the new business and really connecting with our growers and customers.”
McWhirter says the aim of the advertising campaign is to leverage the increasing demand for wool carpets in New Zealand.
Meanwhile, he says WNZ is continuing to add more independent and retail chains to market wool carpets – following the launch of its partnership with Flooring Xtra and other retailers last year.
“Retailers are clearly telling us that consumers want sustainable, renewable and biodegradable carpet made from wool grown right here in New Zealand.”
McWhirter says the co-operative now has 11 wool stores, a carpet manufacturing partner, a New Zealand carpet distribution warehouse and over 150 carpet retail store partners in NZ.
“We also have a UK office, many offshore customers, a strong well recognised Wools of NZ brand and loyal grower suppliers.”
He says Wools of NZ is owned by farmers and its only objective is to positively benefit NZ sheep farmers.
