Leading wool broker and exporter hopes a supply contract with the world's largest carpet retailer will make amends for the absence for more than a decade of wool promotion, while also addressing plummeting wool prices.
An Elders Rural Holdings NZ-owned marketing company, Wool Marketing Enterprises (WME), has reached agreement with carpet retailer CCA Global Partners (CCA) to supply it with New Zealand strong wool, to their specifications.
Elders managing director Stuart Chapman said such direct supply arrangements were needed to ensure the wool industry had a future.
"There is no future if we don't. The whole wool industry is at the lowest point anybody has ever seen, and somebody needs to take a lead," Mr Chapman said in an interview.
Wool prices had fallen to new lows this summer and were expected to fall further as the global recession dried up demand.
The WME deal would see Elders provide wool to CCA for the production of carpets for the luxury market, for which wool growers would receive a premium price.
The two companies would develop a luxury wool carpet brand made with New Zealand strong wool which would be sold in CCA stores across the United States.
The size of any price premium for farmers was still to be determined, but Mr Chapman said the volume of wool involved was "significant."
But just as important was the investment by CCA in promoting wool and what Mr Chapman called "the New Zealand story".
Changes to the structure and funding of the former Wool Board 10 years ago saw promotion of wool all but disappear, and he said a generation of consumers were not aware of the qualities of woollen carpet.
"There is nothing branding New Zealand strong wool. It is carpet, that is the difference."
Equally, there was a story to be told to consumers about products from New Zealand.
Mr Chapman said not only was CCA Global Partners the largest carpet retailer in the world with 3600 stores, but it invested heavily in training and educating retail staff who would learn the benefits and virtues of New Zealand and its wool.
Other similar deals negotiated by WME were expected to be announced in the next few weeks.
Mr Chapman said the sector had missed international opportunities through a decade without promotion.
"There has been no promotion going into wool as a product, and out of that we have missed opportunities, and synthetics have picked up those opportunities."
Meat and Wool New Zealand chairman Mike Petersen welcomed the announcement but said with the recent establishment of grower-owned procuring, selling and marketing co-operative, Wool Partners International (WPI), he hoped the two groups could work together.
"It makes no sense for both companies to pursue the same strategy in the same target markets and then to fight on the ground for a reducing supply of crossbred wool from farmers."
Mr Chapman said he had not seen WPI's strategy, but he did not want the distraction of progressing the US-venture by issues such as working with others.
WPI chief executive Iain Abercrombie said the Elder's initiative confirmed the merits of its strategy of linking from the farm to the market.
