AUSTRALIAN Wool Innovation (AWI) chief executive Brenda McGahan says the wool industry has a decade of missed marketing opportunities to make up for.
Speaking after 10 days of business development meetings across the United Stated, Europe, United Kingdom and India, Ms McGahan said it was clear that wool had lost market share and AWI had to get back to being on the ground and supporting its key retail and brand partners or risk being trounced by its aggressive and persistent textile competitors.
In a frank conversation with Rural Press, she said members of the National Retail Federation in the United States - the world largest retail association representing 1.6 million stores - conveyed to her that the last major marketing campaign selling the benefits of wool in the US was in 1996-97.
"That’s a long time to not be in that market," Ms McGahan said.
This lack of marketing means the many positive stories of wool need to be retold; for example easy-care wool, sleeping better with wool, and the next to skin wool opportunities.
The business development meetings occurred as wool industry delegates were scrutinising the operational costs of AWI, as stated in its annual report.
Earlier this year AWI stated it would slide into the red if it continued to dip into its reserves as it had in the past.
Woolgrowers have voted at this year’s WoolPoll to boost its marketing spend from 60pc to 70pc split of AWI’s overall budget spend.
"Our competitors, particularly synthetics, are extraordinarily active and we have to get back out on the road and go to every major retail and brand partner," Ms McGahan said.
"We have to stay with them to provide support, whether that be staff training, product development, trend forecasting or assisting with marketing materials."
She explained that while wool "had been largely forgotten", its competitors had stepped up their campaigns.
Getting more wool back on the shelves of retail stores is the goal and is not impossible, Ms McGahan said.
"Everywhere I have been, I could not believe the amount of wool and wool blends in stores. There is a marked increase in the amount in store this year.
"Because the retail sector is down – particularly in the United Kingdom – retail stores are really trying hard to market their products and Merino wool is helping provide a point of difference.
"Everywhere I went the trade was concerned about the suiting market but they are seeing the trouser and outerwear markets as a potential growth area.
"A lot of shops are stocking an increased volume of wool blends, knitwear and woven-in both mens and womenswear - they see blends as a way to meet competitive price points for value conscious customers."
Because of the high Australian dollar, she said, wool manufacturers had conveyed they were paying 30-35 per cent more for their Australian wool than 6-12 months ago (see graph).
The final round of business meetings were held in India, around the International Wool Textile Organisation and the International Apparel Federation.
Ms McGahan said the growth in the Indian textile industry was cause for optimism, with the pace of market expansion breeding a new Indian expression: "we are minting the money".
She said one of the factors that would drive a big lift in the consumption of wool in India was youth. Some 50pc of its population is 15- to 35-year old aspirationalists – with growing sophisticated tastes and a need for suits and outerwear to enter the workforce.
Asked if the Indian populace knew about wool Ms McGahan said: "Yes and no."
"I was told by sales staff that men definitely come into stores wanting Merino wool suits but women just want the fashion – so there is a job to be done."
Indian economic data shows that its retail industry increased to $US372 billion in the last financial year, and its growth in GDP stands at 6pc.
Ms McGahan says one of the most promising trends in India was the rise in domestic spend on woolen apparel, which follows similar growth patterns in China.
This has counter-balanced falling exports to Europe and the US.
The series of business meetings came as Brand India last week successfully wound up its two-day exhibitions showcasing India's manufacturing capabilities in Sydney and Melbourne.
"We have had an incredible response from the trade and people were asking about wool," said event organiser Karyn Western, who confirmed manufactures for international brands including JC Penney, Nautica, cK, Marks and Spencer, GAP, and United Colours of Benetton attended.
Australian wool exports to India lifted 2.7pc in 2008-09, including a 42.7pc increase in June with India now the second biggest buyer of Australian wool according to Australian Bureau of Statistics.
India’s Joint Secretary Ministry of Textiles Dr J.N Singh says India had established a solid business with the US and Europe and was now looking at Australia to grow its business.
AWI will hold its annual general meeting in Sydney on tomorrow.
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