Strong wool finds its white knight

29-06-2009 | Tony Leggett

Bob Peffers chuckles at the suggestion he could be responsible for rescuing the New Zealand strong wool industry. He is stocky of build and not the archetypal loud, bombastic Yank. More a quiet achiever.

The 60-plus-year-old veteran of more than 40 years marketing in the US came to this country less than three years ago to enjoy retirement in the sleepy Banks Peninsula township of Akaroa.

But after sitting around for a few months, he agreed to do some consulting work for the Wool Industry Network (WIN), the initiative set up in 2005 by Meat & Wool NZ to identify opportunities in the sector.

He won't comment on his reasons for leaving WIN, but says his initial high-level analysis of the industry in NZ suggested time was running out for the sector. He saw the supply of quality wool was shrinking and nobody was making money.

His solution was simple and proven. And he found Elders Primary Wool management willing to listen.

"I said the only way to do anything was to create demand at the retail level and work backwards. That's the whole key to our strategy.

"We need to create an identity, a brand at retail and with that brand we can set a premium for the carpet. If we're certain consumers will pay that premium, which we are at the high end, and then we just pass that back to growers."

Research confirmed his observation that US consumers knew little about wool carpet, but a large percentage of the more affluent, green-sensitive home owners were happy to pay a premium for a product that fitted their sustainability and naturalness values.

Peffers says this highlighted the failure of the former NZ Wool Board's Fernmark brand which he claims "didn't mean anything to anyone".

"What's a fern got to do with wool? It never really was marketed; it was there, but it was never explained."

He encouraged Elders Primary Wool to hire Brand Content, the successful US marketing company that developed the Ocean Spray brand for the cranberry industry worldwide. Brand Content was also chosen because it had experience dealing with farmer co-operatives.

Peffers says the company pinpointed the brand's target audience; educated, green-sensitive and affluent. Further research confirmed these people would pay a premium for a wool carpet.

"We then knew we had to get into a retail environment and to do that we had to create a brand and work that brand through the system."

When Peffers approached giant US carpet retailer Commercial Carpets America (CCA), there was an instant attraction to the concept from its management.

CCA's size and status meant it had the potential to drive the brand through the retail stage, way beyond where previous wool carpet ingredient brands like the Fernmark had ever gone before.

"Fernmark never got to retail. Some $250 million was spent over a decade on advertising and promotion and marketing that might as well have been flushed down the toilet."

CCA offered 3600 retail outlets across the US and its own "college" to train its retail staff.

"When I saw that, I said this is the right company to link with. They basically sell synthetic carpets, but they needed a story to help them sell wool carpets. It was a case of good timing. They wanted it and we were there."

Peffers says Elders Primary Wool agreed to pay the costs for developing the brand. It is owned by a subsidiary company, Wool Marketing Enterprises, which has agreed to allow CCA to use it exclusively in return for CCA marketing the NZ wool carpet range through its stores.

The numbers are certainly appealing. Try this for size: A 1% increase in wool carpet sold in US would require more strong wool than NZ can currently supply.

Or: A doubling of the price paid to growers for their wool that goes into a premium-quality carpet would be less than $2/square yard extra at retail. Putting it another way; if the price of the raw wool going into a high-end carpet retailed for US$140/square yard was doubled from $2.50/kg to $5/kg, the impact at retail would be US$1.42/square yard, or 1%.

And arguably the bitterest pill for growers to swallow: Elders Primary Wool is aiming to get wool carpet selling at the same price as synthetic carpet, which currently sells at around a 40% premium over wool.

Ironically, Peffers says one of CCA's synthetic carpet retail brands, called Resister, was used as a model for developing the Just Shorn brand. Although CCA's total carpet business is 97% synthetics, the company agreed to have an ‘eco-label' wool carpet range in its retail stores.

Peffers says Verifi TT, the breakthrough in traceability Elders Primary Wool gained exclusive access too earlier this year, proved a winner with CCA.

"It's (traceability) the other piece of the equation that glues the whole thing together. Now we can guarantee this is the farmer and this is the wool and to go on line to see the farm that produced the wool. It's not a new idea, but it's not been done before for carpets."

Guaranteed traceability through Verifi TT means the carpets produced under the Just Shorn brand will meet the stringent US SNF 140 certification requirements, a major breakthrough in getting architects, interior designers and consumers to consider wool carpets along with synthetics.

Peffers accepts the next big test onshore will be the specifications and volumes available in the contracts offered to growers. These are expected late next month.

The launch of the range to consumers will be at the massive US flooring exhibition Surfaces at Las Vegas in late January next year.

Right now, he is helping to determine which carpets will be in the new Just Shorn range and from that, what the grower specifications and volumes will be.

Peffers left this month's National Fieldays at Mystery Creek, where the Just Shorn brand was unveiled, and headed to Los Angeles.

He's now wrapping up the marketing programme with CCA, assisting the company with development of training manuals and procedures for its soon-to-be released wool carpet range.

"It's now down to detail. We just have to step through it. The wool is there, the customer is ready, we're on track.

"To tell you the truth, I'm busier than I've ever been."

Growers would agree, Bob, every minute must count.

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