The Resurgence of an Iconic Australian Industry

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-By Aleisha Parr

“The history of Australian Merino mirrors that of Australia itself, playing a major role in the development of both the country and its character,” says AWI CEO Stuart McCullough, in a recent interview with Business in Focus. “Australian farmers have made great advancements in Merino production over the past two hundred years, and today they are justifiably proud of the tradition of excellence they have inherited.”

Originally heralding from Spain, Australia’s first Merino sheep were introduced from South Africa in 1797. Through selective breeding, the already fine fibre of these sheep’s wool was further enhanced to produce the authentic Australian Merino with its even finer wool. With the introduction of new industrialised spinning and weaving machines, the quality and flexibility of wools became increasingly important. Australian Merino wool, with its long, fine fibres, was ideal for enabling the production of lighter, softer wool fabrics, and so by 1870, was the industry leader globally in both the quantity and quality of its wool production.

“Australian wool and more specifically Merino wool has been designed by woolgrowers over two hundred years to be the finest in the world,” Mr McCullough says with pride, “and so is sought after by the world’s leading apparel and interior textile manufacturers.”

In the two centuries that have followed, Australia has continued to be the world’s most advanced wool producer, despite changes in the industry and an unreliable global economy. Today, the industry thrives on the support of its efficient, transparent and highly developed wool marketing system, a trained and registered workforce of over 20,000 wool-classers who prepare clean white Merino for the world’s processors, and objective laboratory test results attached to almost every bale of Merino exported.

Australia’s advanced systems can also trace wool right back to the land where it was produced, providing consumers with confidence in the origin and quality of the wool used in the clothes they buy.

“Many rural and regional communities are supported by this most Australian of industries,” explains Mr McCullough, “with over fifty thousand Australian farmers and many tens of thousands more working in the industry. Most farms are family owned and operated, with unique skills and a great sense of pride passing from generation to generation.”

As producers of ninety per cent of the world’s fine wool, Australia exports over seventy per cent of its wool clip to be processed in China. Half of that exported wool is consumed by China’s growing middle class. In all, over ninety per cent of Australian wool is exported to the northern hemisphere, where Merino’s fine quality and breathability answer both to environmental and style demands.

At present, wool production in Australia – at 350 million kg – is slowly rising from a near century low. As such, wool producers are beginning to experience a rather rare but certainly sustained run of strong demand resulting in good profitability.

“The state of the global economy is of significant concern,” admits Mr McCullough. “Demand for Australian wool is relatively strong and prices comparatively strong but the future is uncertain.”

Ensuring the continued strength of Australia’s wool industry has been the responsibility of the AWI since 2001, when it was established by the Federal Government and the wool industry stakeholders as the industry’s rural Research and Development Corporation (RDC). AWI is one of fifteen separate rural RDCs for specific rural industries, and is responsible for delivering research, development and marketing activities for the benefit of Australian woolgrowers. The organisation received funding via a two part levy, with the initial investment paid by woolgrowers and matching R&D funding from the Federal Government.

Before the establishment of the AWI, these tasks were carried out by a variety of discrete organisations, including the Australian Wool Research and Development Corporation, the Australian Wool Corporation and the International Wool Secretariat (dating back to the 1960s when the famous ‘Woolmark’ was developed to represent the natural, sustainable features of wool. It is now the most recognised textile brand in the world).

“Everything we do must pass the woolgrower test. If it can be explained and approved by the woolgrowers we serve then this passes our primary guiding principle,” explains Mr McCullough. “From close consultation with woolgrowers, research priorities are set and we aim to deliver on these though research projects and proposals, in effect problem solving.”

The organisation has been successful in gauging the needs and preferences of woolgrowers through the undertaking of three yearly ‘WoolPolls’. These questionnaires provide woolgrowers the opportunity to vote and decide on the future of the company and by extension, the future of the industry. Mr McCullough says that through this research, woolgrowers have also endorsed a new model of investment favouring more marketing of their product, which has been carried out by the AWI across a variety of global marketing campaigns.

“By scheduling our product development and marketing to fit in exactly with the retailer’s fashion calendar, the company effectively presented and marketed its products to retailers and brands. This year, AWI offices around the globe have also been working with many of its retail partners to help inform and educate their sales staff about the natural properties and benefits of wool.”Central to this marketing, Mr McCullough says, is the use of the Woolmark logo, which continues to be recognised worldwide as an emblem for the quality and luxury of Australian Merino wool.

At the same time, the apparel industry has slowly been experiencing a shift in focus to a more casual style, forgoing luxury for practicality and comfort. The active outdoor market continues to grow, with particular focus on the hunting and fishing markets as well as urban style.

Fortunately, Australian Merino wool provides all of these benefits, and so has focussed its marketing efforts in recent years on not only promoting this, but also on developing innovative fabric technologies to produce more casual or individual finishes for its wool. Most major manufacturers are currently using Merino wool in their range, allowing access to a host of exciting opportunities for Australian woolgrowers.

“We’re continuing to work across the board to influence demand for Australian wool by working with brand, retail, manufacturing and media partners,” says Mr McCullough. “AWI works with dozens of industry bodies, research providers and representatives and has in the last twelve months partnered with some of the biggest fashion names on the planet such as Giorgio Armani, Benetton, Missoni and Vivienne Westwood.”

Through these and other partnerships, the AWI is rolling out three global marketing campaigns this year: Campaign for Wool; Merino. No Finer Feeling; and Woolmark Gold.

The first of these, AWI’s Campaign for Wool, aims to educate consumers on the natural and renewable attributes of wool. “Merino. No Finer Feeling” is focussed on building consumer awareness of the fineness and luxurious nature of Merino wool. Woolmark Gold represents the largest marketing venture ever attempted into China, emphasising to the Chinese consumer that “to dress with style is to dress with wool.”

The AWI is also continuing work on its Wool4skool program. Through this initiative, over six thousand Year Nine and Ten Design students are using wool in their design of a garment with the overarching theme “Modern Australia.” This is the first time that wool education has had a place in the classroom, despite its long and rich history.

Finally, the AWI is introducing a new international competition, the Woolmark Prize, in hopes of “cementing wool’s place in the top echelon of fashion design.”

Through each of these initiatives, the AWI has found a way to reintroduce one of Australia’s oldest and most celebrated industries in a new and modern way, strengthening the fibre of the industry itself. What the future might hold for the industry is yet to be determined, but it is safe to say that the Australian Merino wool industry will forever be a part of Australia’s rich tapestry.

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June 19, 2018, 8:18 PM AEST