WA Merino wool needs its own brand to capitalise on market potential and to boost grower returns by eliminating a traditional price discount, local wool industry doyen Peter Scanlan has declared.
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Recently returned from leading Scanlan Wools' latest 19-day tour of China for 25 WA woolgrowers, Mr Scanlan has already come up with 'CashMerino' as a potential brand name and said his ideas for a WA wool brand were reinforced on the trip.
He believes the average WA Merino wool clip is fine enough, when processed with the latest technology, to rival cashmere goats' wool for softness and next-to-skin comfort - hence the 'Cash' component of his suggested brand name.
On current prices cashmere wool sells for up to nine times what WA Merino wool sold for last week.
Global marketers quoted latest indicative prices of up to US$131.90 ($188.44) a kilogram for Chinese cashmere, US$110.40/kg ($157.72) for Mongolian cashmere and US$97.80/kg ($139.72) for Iranian cashmere.
WA Merino wool traditionally sells at a lesser price than Eastern States' wools - 18, 18.5 and 19 micron wools sold at the Western Wool Centre for up to 87 cents a kilogram clean less than comparable wools at Melbourne and Sydney last week.
But currently it was better wool because of the impact the sustained drought has had on Eastern States' sheep flocks and their wools, Mr Scanlan said.
WA was therefore in a "unique position" to cash in by rebranding and repositioning its wool in the marketplace as a competitively-priced rival for cashmere, rather than continuing to use the AAAM branding on bales that aligned it with drought-tender Merino wools from Eastern States, he said.
Marketing WA's Merino wool as a premium competitor for pure and blended cashmere wools and perhaps even pashmina - fine cashmere wool - rather than cotton and synthetic fabrics wool is traditionally compared to, would recognise its "true value", Mr Scanlan said, and could boost WA woolgrowers' returns.
"You can use any name you like for WA Merino wool, I just think AAAM is too old fashioned and it's got too many connotations to it," Mr Scanlan said last Friday.
"Our wool clip here in WA has got that fine, I'm sure it's closer to 18-18.5 microns now as an average," he said.
"That's the same micron as cashmere.
"They (Chinese processors) consider 18 microns to be cashmere and pashmina is considered to be 16 microns.
"On the tour (which included visits to the world's largest integrated textile processor Sunshine Group and world's largest wool top maker Tianyu, plus smaller wool processors, knitters and spinners) we saw quite a few Eastern States wools being processed.
"Every mill has all the latest technology, particularly for machine-washable, easy-care wools - that was the big thing, machine-washable, easy-care wools.
"But I couldn't understand why they were buying some of these drought wools from over east and discounting ours.
"For too long now WA wools have been discounted compared to Eastern States' wools.
"I think maybe we should be looking at rebranding WA wool.
"We (WA) have probably the biggest pure Merino flock in the world now and that should be part of our wool marketing.
"WA hasn't been infiltrated with all the crossbreds yet, like Victoria, New South Wales and Tasmania.
"We've still got a pure-bred Merino flock here because of the way we put our British-bred rams over our Merino ewes to get our crossie lambs, we're a unique State now - it's just evolved, I don't think anyone planned it that way.
"But because of this, I think we should be looking at a WA branding for our wool and incorporating that pure Merino softness aspect into our marketing."
Mr Scanlan said several things he saw and heard on this latest trip to China had influenced his thinking on creating a specific WA wool brand.
Australian Wool Innovation staff at its wool education centre at Donghua University, Shanghai, had pointed out to his tour group that new technology enabled Chinese processors to take a 21 micron wool and straighten it so it processes and feels like it is two or three microns finer.
"I don't know, but perhaps that's the reason the price spread across our microns has contracted so much, because the part-micron measures don't mean very much any more to processors who can take quality mid-micron wools like ours and process them like fine wools," he said.
The tour group also saw a massive, new eight-level cashmere wool warehouse called Vetiancashmere which cost $50 million to build.
"From the outside it looked just like a five-star hotel only it was surrounded by factories," Mr Scanlan said.
"There would not be enough true cashmere available to supply this new mill, they will be using 18 micron wool - hopefully WA wool.
"Other mills we visited also had cashmere in their collections.
"They blend cashmere and fine wools."
Mr Scanlan said he and Scanlan Wools' wool buyer Steve Noa - both frequent visitors to China - were "amazed" at how Quick Response (QR) codes on product labels now dominated point-of-sale marketing in Chinese cities .
"It didn't matter what they were buying, in China we saw everybody using their iPhones to read QR codes on labels," Mr Scanlan said.
"Steve and I couldn't believe all these young people with their phones clicking away to all these labels - it was just so noticeable.
"When you work it out, 80 per cent of our wool goes to China and 40pc of that 80pc is being consumed in China, so you've got to look at what they are doing.
"We (WA woolgrowers) have to come up with backstories on short videos that can be put on QR codes on product labels with our own branding to tell people what we do and how we produce the wool.
"We've got to tell the story of WA wool to the customer.
"The QR code is going to be a very big thing, we need to get onto our farmers and come up with a back story for WA wool."
Mr Scanlan said he was contemplating putting together a 100-tonne order of 18-19 micron Merino wool with about 10 WA woolgrowers prepared to put their story on video for inclusion on QR labelling identifying it as wool from WA with specific branding.
"Two of the mills we went to would be interested in buying," he said.
"The government has told Mongolian sheep farmers they have to cut down their flock numbers big time.
"They've had three years of drought on their prairies and their stock have eaten the grasses out.
"They've been told to slash stock numbers so that their prairies can recover.
"That has tremendous implications for our wool and sheep meat, it's going to be a huge opportunity for us," Mr Scanlan said.
