Research and Development

AWI strategic plan targets Merino wool demand and grower profitability

Terry Sim June 3, 2016

AWI logo June 2016

AUSTRALIAN WOOL Innovation is targeting the creation of new wool demand and boosting the value and cost-effectiveness of its research and on-farm programs to wool growers, processors and marketing partners in its latest strategic plan.

AWI yesterday released a 112-page draft version of its 2016-2019 strategic plan. An online interactive version is also available to view.

Wool growers have about two weeks to make comments and give feedback on the draft plan via [email protected], by Tuesday June 17.

Following on from the 2015 WoolPoll vote, AWI is developing its strategic plan for 2016-17 to 2018-19. The purpose of the plan is to outline AWI’s key investment priorities for the three years from July 1 2016. AWI will subsequently be measured against the targets set in the plan, through the independent Review of Performance before the 2018 WoolPoll.

Increasing wool demand and grower profitability are key aims

AWI said increasing demand for Australian wool and increasing the profitability of growing wool are its key aims, but educating the next generation of wool growers, textile experts and fashion designers to use wool is also an increasing feature of AWI work.

The draft plan includes targets of new global partnerships and 11 million kilograms of new demand for wool by 2019 in the womenswear, menswear and sportswear sectors, and through its global campaigns, the Woolmark Prize and the Campaign For Wool.

The plan document also outlines AWI’s strategies to increase the profitability and sustainability of wool production and wool processing and; provide cost-effective services to growers and other parties, including cross-company services.

AWI said its investment focus during the 2016/17-2018/19 strategic planning period will be on:

– Continuing to position Australian Merino wool as the premium fibre for luxury apparel worldwide.

– Increasing the demand for Australian Merino wool in order to increase the average price and improve the return to Australian woolgrowers.

– Recognising brands and retailers ’own’ their consumers and partner with them to effectively create demand for finished products made from Australian Merino wool.

– Focussing on improving productivity and efficiency by continuing the shift to a digital engagement model for B2C and B2B2C activities and remaining consumer-centric across all aspects of marketing strategies, programs and projects.

In the draft plan AWI commits to working with its key global customers, “and targeting their consumers, we will build, distribute and promote key marketing tools that focus on the benefits of wool, target high potential (HP) categories and both educate and motivate consumers to purchase.”

AWI chief executive officer Stuart McCullough said the draft plan also demonstrated AWI’s emphasis on transforming AWI into a digital and service orientated company.

“Through the period covered by this new strategic intent document we are determined to ensure that all parts of the wool supply chain are innovation rich and that Australian woolgrowers are the significant beneficiary.”

Marketing to focus on Merino wool

AWI is proposing to develop and implement co-marketing campaigns targeting menswear and womenswear that build demand in key consumer markets for fashion apparel where the ingredient is Australian Merino wool.

The draft report said AWI will continue to defend Australian Merino worsted as the only component of a high quality suit, and capitalise on the current trend for woollen looks in men’s outerwear.

“We will aim to partner with upper-middle brands that are seen by the trade as ‘iconic’ and who have the elasticity in their pricing to absorb higher wool prices.

“This will influence the aspiring men’s middle market that seeks to trade up via fibre upgrades and ingredient branding.”

In the womenswear market, AWI aims to continue to reverse the trend towards the ‘fast fashion’ and focus on the upper end of the market where there is a growing awareness of, and demand for, transparency in manufacturing and source of fibre content.

“This represents a distinct advantage for Australian wool.”

AWI said there was opportunity for wool to capitalise on growth in the high performance apparel sector and it intended to focus on the running, athleisure and outdoor sectors with co-marketing and partnership collaborations.

AWI initiatives on welfare, reproduction, lifetime genetics and pests

The AWI draft plan is proposing to lift the profitability and sustainability of wool growing, resulting in:

– Australian wool growers widely utilizing pre-operative pain relief for invasive procedures, or welfare enhanced alternative procedures;

– the lifting of the average weaning rate in Merino-Merino joinings;

– Reducing the impacts and costs of wild dog and other vertebrate pests on Australia’s wool growers;

– Increasing the genetic and phenotypic aspects of lifetime economic performance of ewes in wool enterprises, and;

– the strengthening of wool’s reputation for environmental stewardship.

The draft plan lists ‘Healthy Productive Sheep’ as one of its sheep production strategies, stating that “improving wool sheep health, welfare and productivity represented the greatest overall opportunity for on-farm R&D for the benefit of the Australian wool industry – both in terms of delivering productivity gains and improved profitability, but also in terms of protecting and enhancing the international reputation of Australia’s wool growers as custodians of the world’s largest population of Merino sheep.”

AWI’s second sheep production strategy will be ‘Farm Automation and Software Development’ recognising that labour use efficiency is an important contributor to farm profitability, and seasonal labour availability constraints have been shown to limit important profit drivers as stocking rate, but can also impact on sheep health and welfare.

“More significantly and specifically, the wool industry suffers by comparison to other livestock enterprises due to the frequency of hands-on sheep management and harvesting activities,” the draft said.

AWI is proposing to develop low-cost, smart sheep ear tags capable of generating maternal pedigree (mothering-up), geo-location, and other behavioural information of commercial value such as wild dog and fly strike alert notifications. It will also support development of virtual fencing, for precise grazing management and potentially, stock movement, and; development platforms to enable automated pasture production assessment and its integration into farm apps such as the LTEM app.

AWI’s third sheep production strategy is ‘Feedbase and Fibre Advocacy’, recognising that “improving wool’s reputation as a sustainable textile, healthy for both consumers and the planet is an increasing priority for the Australian wool industry.

“Critical review of raw material supply chains is an ongoing process by brands and retailers with those supply chains considered to be environmentally harmful at risk of being overlooked.”

AWI is aiming to increase shed productivity by, on average, four sheep per day by 2019 across the whole industry, ensure the cost per person trained remained constant in real terms. It also aimed to make commercially available at least one technology, by 2019, to increase the efficiency of wool harvesting.

Strategic plan development is ongoing

AWI chief executive officer Stuart McCullough said the development of the strategic plan is a continual process.

“It is a document that has evolved over many months and countless conversations with wool growers and wool industry bodies around the country.

“At events in woolsheds and at sheep shows through to corporate board rooms and more formal industry consultation events as part of a planning and consultation cycle,” he said.

“I encourage anyone interested in the future of wool to review the document and have their say.”

As part of the development process of the strategic plan, AWI has periodically released Progress Documents that report on the development of the Strategic Plan.

AWI listed its key stakeholders as wool growers, wool grower representative groups (national and state), state farming organisations, governments (federal, state and international), domestic supply-chain representative groups, research and development vendors, retailers and brands, fashion designers, and manufacturers and supply-chain partners.

Source: Australian Wool Innovation.


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  1. Edward Wymer., June 5, 2016

    The draft version of the 2016-2019 strategic plan looks great, must have cost plenty. The final version could finish up as “War and Peace.”
    The most repetitive line — seems like every few pages is – ‘Increase the profitability and sustainability of wool growing.’ Also getting a mention several times is — ‘More highly trained shearers and wool handlers’ and ‘Encouraging the next generation of the wool industry participants is critical to the prosperity of the Australian wool industry’. All fair enough.
    But the profitability and sustainability of shed staff gets no consideration; they are just a pool of labour who can evidently try and get the dole when out of work for most of the year.
    The Australian Wool Exchange claimed in January 2015 there were 19,200 registered wool classers of all types. One for every 88 bales of classed wool per year, or about four days work. On AWEX’s own figures, Australia’s current 180 master classers — the “creme de la creme” — class on average 1322 bales per year; about 13 weeks work in a four-stand shed.
    I would like to see AWI telling the next generation the truth and not mislead them.

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