By Eric Pawson and Harvey C. Perkins
A few years ago, people wanting outdoor wear for recreational pursuits would most likely have bought something made of polypropylene or some other brightly coloured artificial fabric. ‘Polyprop’ was a sort of distinguishing uniform among those who liked to be in the hills, or who wanted others to imagine that that was where they liked to be. It was also cheap, sweaty and smelly. Today, those same people – and many more besides – are as likely to dress in rather more stylish garments made from merino fine-wool fibre. They may well get their T-shirts, jackets and underwear from Icebreaker in Auckland, their socks from the American firm Smartwool, and even wool runners from Allbirds, a New Zealand company based in California. These new merino products are not cheap, but neither are they sweaty and smelly on the body. Instead, they have introduced a whole new experience of comfort in next-to-the-skin clothing and footwear.
Merino is by no means restricted to recreational uses. It has long been favoured for high-end Italian suits for men and women, but its new-found status in the outdoor market has prompted wider use in fashion, for sweaters and scarves, for example. Its softness has found favour for baby and children’s wear, and its fire-resistant properties have been employed to advantage for clothing for emergency services. This wide range of uses has created new meanings for fine wools, emphasising versatility, insulation and moisture management, ease of care, naturalness and discernment. In this sense, merino is a very new fibre at the same time as being a very old one. The merino story of the last twenty years is about the way in which its properties have been understood and assembled so as to create fresh value for one of the country’s longest-standing commodities. Even the deliberate adoption of the term ‘merino’ signifies the transition from wool to a high-value fibre with a much richer storyline. This chapter explores who has been responsible for this transition as well as how and why it has happened.
The merino was the first sheep brought to New Zealand by Europeans, and by the turn of the twentieth century there were about fourteen million in the country. But it then rapidly lost ground on the introduced pastures of the lowlands and hills to dual-purpose animals, like Romneys, which supplied strong wools for the worsted mills of Britain, and served as meat producers for the burgeoning export trade in lamb (see Chapter 3). Merino were also not suited to damp ground conditions, foot-rot being a major problem. By the 1960s there were fewer than a million left, mostly in the South Island high country, comprising less than 2 per cent of the national flock. The half-bred sheep, a merino crossed with either the Romney or English Leicester and developed as being better suited for lamb production, numbered another two million.1 But merino flesh is rather gamy due to the native vegetation on which it grazes, which until recently was deemed to rule it out for bland public tastes.
The feature that distinguishes the merino from Romney sheep is the fineness of their fleeces. Individual fibres are measured in terms of the micron, which is a millionth part of a metre. On this scale, the diameter of a human hair is about 60 microns, and traditional strong wool from breeds like the Romney, as used in carpet making, is between 35 and 45. Merino, however, is 21 microns or less (and can be as low as 12), whereas half-bred wool ranges from 22 to 31 (Figure 4.1). This is one attribute that makes merino suitable for high-quality clothing. At the finer end, it rivals luxurious fibres such as silk or cashmere. Compared to synthetics, its surface structure is irregular and covered with overlapping scales like roof tiles. As a result, it traps the air in its fibres, retaining heat whilst simultaneously absorbing up to a third of its weight in water, so keeping its wearer dry, at a much better performance rate than polypropylene or polyester.
New Zealand is a relatively small producer of merino wool compared to Australia and South Africa, accounting for less than 3 per cent of global supply in the 1990s.2 By then, the wool industry had been in decline worldwide for three decades or more due to competition from oil-based synthetics. Merino farmers had become disillusioned with the activities of the government-run Wool Board, which they saw as promoting the interests of strong wools (for carpets, for example) at their expense. They were concerned that their fine wool had no market identity of its own, as it was sold on contract and then often blended with fibre from other countries.3 Merino shared the characteristics of other primary commodities of the time, being subject to price volatility at auction, after which much of the product disappeared anonymously into the international market. It was a classic case of knowing little, and influencing less, of what went on beyond the farm gate.
Figure 4.1: Comparison of micron width of different fibres.
Source: various, including http://www.scienceimage.csiro.au/image/8115
Then in the mid-1990s two important events occurred, although neither happened overnight and the influence of each has continued to grow. The first was action by a group of merino farmers from Marlborough, Canterbury and Otago leading to the establishment of the body now known as New Zealand Merino as an integrated innovation, marketing and sales company.4 The second was the founding of the New Zealand firm Icebreaker as a designer and producer of merino recreational garments made from high country fibre. The use of the term ‘fibre’ is deliberate. It encapsulates New Zealand Merino’s intention to transform the merino industry from a wool commodity business to one able to capitalise on the attributes of New Zealand merino as a fibre that is distinct from coarser wool. Icebreaker helped to pioneer a new retail category for merino outdoor clothing as a result. Its founder, Jeremy Moon, saw the potential of some finely woven merino wool thermals that had been produced for a Marlborough farmer. Unlike wool, this merino fabric was soft, did not scratch and was comfortable to wear next to the skin. And unlike polyprop, it breathed, and didn’t stink after intensive or lengthy use.5
It is significant that these developments did not really depend on technical discoveries: in that respect they could have occurred very much earlier. Rather, they were the outcome of system-design experiments. The success of both companies has been based on bringing together previously disparate components. Jeremy Moon ‘found passionate but disconnected groups’ associated with the industry. ‘Scientists, wool researchers, knitters, the spinners and the merino growers. All these people who loved the quality and characteristics of the fibre, but hadn’t quite been able to pull the product together into one concept.’6 New Zealand Merino was also aware that farmers, wool buyers, processors and manufacturers did not often talk to each other. Information and ideas were not being shared for the good of all, a situation that had to be remedied in order to turn things around. As with the recovery of the kiwifruit industry, discussed in Chapter 5, relationships between the key players in the industry had to be reworked for new ends.
The organisational change at the core of this was New Zealand Merino’s negotiation of supply contracts with prospective buyers, who have become known as ‘brand partners’. These contracts have usually been for terms of one to three years, although recently some are longer.7 They enable relationships to be developed between grower and manufacturer, so that each better understands the needs of the other. For the grower, the advantage lies in the assurance of greater price and income stability for the duration of the contract; for the buyer, it is being able to rely on a guaranteed supply of fibre that is both traceable and grown to desired specifications. For many years, the Icebreaker contracts have been the most visible, due to large high country roadside stands that proclaim the name of the farm, or station, with the byline Home of Your Icebreaker (Figure 4.2). Within a decade or so, New Zealand Merino was transacting about 85 per cent of all the country’s home-grown clip, about half of this through direct supply contracts. Given that New Zealand Merino’s commission is higher than that of traditional brokers, the trade-off for growers has to be consistently realised value, from a clearly differentiated product.8
Figure 4.2: Icebreaker high country sign.
Source: Harvey C. Perkins
The development of Icebreaker, a key New Zealand Merino brand partner, illustrates this. The company worked to forge close links to high country stations,9 with the heritage and landscape of the high country featuring strongly in its packaging and advertising. The initial focus for the company was the relationship between station families, the land and their merino sheep. This gave meaning to Icebreaker garments in terms of provenance and a story that could be readily communicated. More than this, however, Icebreaker has always emphasised its environmental credentials: ‘Our pure merino is annually renewable. Each year the merino comes down from the mountains to be shorn and then returns to the mountains.’ These credentials are backed up by New Zealand Merino’s own quality assurance system, ZQ, which is given to fibre whose production has met specified standards of land and animal care.10 Icebreaker products have been designed not just as stand-alone items but as part of a pioneering integrated-layering system.11 This starts with a next-to-the-skin base layer, specified by weight or fineness of the fabric, and matched to seasonal or weather conditions. ‘The merino’s wool keeps it warm and dry across all seasons. It will do the same for you.’ Icebreaker now sells its base layers as ‘the world’s most comfortable underwear’.12
The reinvention of the merino industry owes everything to the success of Icebreaker and the parallel development of a global business strategy by New Zealand Merino. The latter is based in the South Island, in Christchurch. There are other national brokers, such as PGG Wrightson, and smaller local players. Although traditionally some stages of processing were carried out onshore, and fine fabric was manufactured in Italy, today there is a fluid and evolving network of relationships with an increasing number of partners in Europe, North America and Asia (Figure 4.3). Merino not produced on contract is usually auctioned in Melbourne, and there is some mixing of Australian and New Zealand merino in lower-value garments. Processing occurs in a variety of countries in addition to Italy, for example Vietnam, Japan and Korea. China, however, has emerged as the dominant player, combining both top-end technological sophistication and high-volume, relatively low-cost production.
Figure 4.3 illustrates the networks built by New Zealand Merino and suggests that ‘although the business model sounds simple, the wiring behind it has been incredibly complex’.13 Almost all the merino that New Zealand Merino handles, however it has been brokered, is shipped to China for primary processing (involving scouring, top making and spinning). While some is then sent for secondary processing and garment assembly by Italian brand partners, much remains in China to be woven into fabric before shipment to New Zealand Merino brand partners in Europe, North America and other parts of Asia for garment assembly and sales under various labels.14 The map shows the location of New Zealand Merino’s brand partners. These were brought into the network by a process of identifying leading companies in targeted market segments, and then matching the needs of those companies to the attributes of New Zealand merino. This worked to differentiate the New Zealand product globally at the same time as finding end uses for the full micron range of merino being produced on farms. On the ground, these relationships are managed through the contract system.
Figure 4.3: Outline of the New Zealand Merino Company’s key global relationships, as well as other New Zealand players in the merino industry.
Source: compiled from New Zealand Merino Company data
In the 1980s, the New Zealand industry experienced what has been called ‘micron madness’ as growers sought to breed sheep with finer and finer fleece in order to take advantage of boom times in the Italian mills.15 Ultrafine (less than 17.5 microns diameter) and superfine (17.6–18.5 microns) grades have long been used for high-status business-suit fabric, albeit in small volumes. Not until the development of the recreational clothing market were there equally specific end uses for fine (18.6–19.5 microns) and medium-fine/medium (19.6–22.5 microns) parts of the clip, although some superfine wool is also used for ultralight base layers. There is now also a considerable market for mid-micron wool in the 22-plus range from half-breds: it goes to the American brand partner Smartwool to make socks. Whilst the future of mid-micron wool has been questioned for many years, the turnaround in its fortunes reflects New Zealand Merino’s ability to identify and match specific market demands through contracts. It now has a rising share in the company’s business.16
Relationships with brand partners are maintained by frequent exchange visits between the parties, to ensure that expectations with respect to fibre thickness and style match. This was the method that Icebreaker pioneered with a large number of high country farms in order to develop its own concept, product and story. The first partner with whom New Zealand Merino signed a long-term contract, in 1997, is John Smedley, a well-established, high-quality British knitwear manufacturer. John Smedley’s merino is supplied by Omarama Station, which lies in the upper Waitaki Valley in Otago. Return visits occur on a regular basis between representatives of the firm and the runholder: both to Omarama and to the factory in Derbyshire. Another long-standing brand partner is Reda, a high-end clothing and fabric maker located in the alpine foothills of northern Italy. It purchases on contract through New Zealand Merino and has also bought several high country merino stations in the Waitaki Valley and Mackenzie basin to ensure even closer linkages between supply and end use.17
Other brokers are following this lead. PGG Wrightson arranges visits to New Zealand suppliers for staff of Japanese suit manufacturer and retailer Konaka Co., which is often the first time that Konaka sales personnel have felt (let alone shorn) the merino wool that ends up in the suits they sell on the streets of Tokyo and major Japanese cities. Similarly, the farmers that supply Konaka in Otago and Canterbury have travelled to Japan. Global Merino, a technical fabric maker based in California, with customers such as the American clothing company Patagonia, increased its sourcing of New Zealand fibre from 20 to 200 tonnes in the three years to 2016, at the end of which PGG Wrightson organised a meeting between growers and the company’s chief executive at Glenbrook Station, near Omarama.18
These relationships are based on rewards for both parties. The overseas client is better able to tell the story about the origin of the wool and the quality of the fibre, whereas the grower knows better what is expected and receives credit for farming practices that often take years to perfect. For instance, in the early days of Icebreaker, there were problems with holes appearing in the fabric, which required a better understanding of the factors that affect the tensile strength of the fibre produced on farm. This can be resolved in time through breeding, but taking care of the animals and the environmental conditions in which they grow their fleeces is important too. Icebreaker uses about 25 per cent of the national merino clip, drawing on 180 sheep stations to supply its wool.19 Although its head office is in Auckland, its range is mainly designed in the United States and manufactured in China. No New Zealand processor is large enough.
Figure 4.4: Icebreaker’s Touchlab in Toronto.
Source: Icebreaker.
Reproduced with permission
Nonetheless, Icebreaker works to narrow the cognitive distance between itself and its far-flung customers, and between them, the grower and the merino sheep. For many years, the symbol of the company was a part-sheep, part-human figure, intended to convey not only the sensuousness of the clothing, but also its body fit. This was illustrated in the slogan ‘A system of layers, inspired by nature, engineered to perform freely’.20 Buyers could enter a ‘baa code’ from their newly purchased garments on the company’s website in order to find out where the merino fibre used in its construction had come from. Purchases originally had to be made through independent retail outlets, later supplemented by online sales, and then a small chain of the company’s own stores, called Touchlabs (Figure 4.4). This name recognises the kinesthetic value of being able to feel not only the manufactured products but also the merino fibre from which they are made. Small amounts are available in-store to touch and handle. In all, packaging, labels, store posters and a detailed website long provided a consistent story of a clothing and a fibre grounded in the scenery, human heritage and farming practices of the New Zealand high country.21
Recently Icebreaker’s presentation has undergone a change, reflecting the ways in which the company became increasingly global in its orientation, prior to its acquisition by the US-based VF Corporation late in 2017. It is also drawing on a wider set of fibres in its range. Even though functionally the high country connection is as important as ever, it has become less conspicuous in the company’s storytelling. Instead, product packaging promotes it as ‘wool with sex appeal’, a quote attributed to the New York Times. Short product descriptions are provided in English, French and German, including the phrase ‘made in China’, but there is no mention that Icebreaker itself is New Zealand-based. It sees itself as an ‘evolving brand’, and where once it claimed to be ‘100 per cent focused on merino’, it is now ‘more than merino’, with small quantities of Lycra used to provide additional strength and shape to base layers, and experimentation with other natural fibres, such as T-shirts made from merino combined with Tencel, a plantation-grown eucalyptus fibre.22 These changes represent attuned responses to global consumers from a company that pioneered new meanings and markets for New Zealand merino and which remains the single largest user of the country’s fibre output.
The emergence of New Zealand Merino and Icebreaker as drivers of new and sustained value for merino is matched by a raft of other players, big and small, international and domestic, flourishing and struggling. Another merino design and manufacturing company with a head office in Auckland is Designer Textiles International, a longer-established but less well-known textile firm than Icebreaker. The locations of their offices in, respectively, the industrial district of Manukau and the hip quarter of Ponsonby are somewhat symbolic: the fabric maker with manufacturing customers all over the world, versus the consumer-focused style driver. Designer Textiles International was established in the 1970s as a multifibre textile manufacturer and entered the merino market as one of New Zealand Merino’s brand partners. It is jointly owned by Korean and German interests and produces textiles using New Zealand and Australian merino, the latter in its less expensive product lines. Its primary merino processing is in China, with secondary textile production mainly in Vietnam and a little in Auckland, its base for experiments in textile development. The firm has its own textile accreditation programme – MAPP (Merino Advanced Programme Performance), integrated with the New Zealand Merino’s ZQ programme – to which merino farmers and overseas processors must adhere. Its customers include big Scandinavian and North American brands, such as Ibex.23
There are also emerging merino companies run by New Zealanders overseas. At least two of these represent further experimentation to find wider uses for the fibre. One is Allbirds of San Francisco, recently founded by Tim Brown, a former All White football player. It makes footwear – dubbed ‘the world’s most comfortable shoes’ by Time magazine – from ZQ-certified merino fibre, using merino fabric manufactured by Reda in Italy. The shoes draw on the same odour-minimising, temperature-regulating and moisture-wicking qualities that have been so effective for recreational clothing.24 An additional attribute of merino, its natural flame resistance, is the basis of Armadillo Merino’s range of next-to-the-skin clothing for extreme users, such as soldiers, emergency services personnel and now the United States space programme. Andy Caughey, another New Zealander, established this company, which is based in Derbyshire in the United Kingdom. He formerly worked in marketing with New Zealand Merino. The fabric is made by Designer Textiles International from ZQ-certified fibre.25 An overseas location capitalises on proximity to large numbers of consumers and reduces the sheer amount of personal and company resource that has to be invested in frequent long-distance travel by New Zealand-based firms such as Designer Textiles International and Icebreaker. But there are also a significant number of locally based merino clothing and fashion firms that are both in and of New Zealand. These not only source their fibre and fabric onshore but also assemble their products in-house. A shared characteristic is the way in which they forefront a New Zealand or regional narrative, even more so than Icebreaker once did.
The best-known of these firms is Snowy Peak Ltd, which was set up in Christchurch by Peri Drysdale in 1981. It has received many awards for sustainable business practices. Its aim is to produce items that are ‘fresh and original’ and have not been seen before on the high street.26 Its two brands – Untouched World and Merinomink – project style and an element of luxury. Untouched World uses ZQ merino and other natural fibres. Merinomink was introduced in 1996, based on a fabric designed by the company and made from merino wool blended with possum fur. The latter has a hollow structure, and high warmth-to-weight ratio. The result is a soft, lightweight and warm garment, and one whose manufacture contributes to the control of the brush-tailed possum, a marsupial introduced from Australia that is an officially designated pest in New Zealand’s forests. Snowy Peak exports to northern Europe, North America and Asia. Its clothes are hand-finished by outworkers around the country, as well as in its own workshops in Christchurch, where staff engaged in product development, design, marketing and sales are also based.27
Drysdale named her company Snowy Peak after the Canterbury high country farm on which she grew up. Two smaller companies whose founders are also from sheep farms are Jane Shand Design of Christchurch and Perriam of Wānaka in Central Otago. John Perriam is the owner of Bendigo Station at Tarras; his late wife, Heather, established The Merino Shop in Tarras village. Their daughter, Christina, has established the Perriam fashion label for adults, children and babies, using superfine merino for many of its garments. It consciously embodies the values of its place: Perriam wool, for example, is sold as Highcountry Yarn. Its knitwear is made by local women, and is sold in the shop in Tarras and another in Wānaka, providing direct feedback from customers. The values of working as a family and in a well-loved place are part of the motivation for being in business, and can be set against the trials of staying in it.28
Perriam wool is from Bendigo; Jane Shand sources her naturally coloured merino wool from William Gibson in Middlemarch, one of very few owners of a pure-bred coloured merino flock in New Zealand. She too is in business not only because she loves what she does, but because of the satisfaction of working with people in all parts of the production process. In addition to sourcing of her wool, she arranges the washing and spinning in New Zealand (which has been challenging due to factory closures) before coordinating knitting and weaving. She also oversees the design and marketing of her products. Her knitted scarves, wraps and shawls are made from ultrafine and superfine merino (Figure 4.5). Like Perriam products, they can be bought online and in a small number of retail outlets; developing overseas markets beyond the tourist trade has not been easy.29
Figure 4.5: Harlequin scarf by Jane Shand Design, ‘crafted from ultrafine naturally coloured cream and silver merino’.
Source: JS Design.
Reproduced with permission
There is a considerable amount of churn in enterprises of this scale, due to the problems faced in making all the right connections to coordinate a viable business. Dil Belworthy, the founder of Glowing Sky Clothing, talks of ‘putting your pots down where the crayfish are’. So the company has shops where he considers there will be customers, on Waiheke Island in Auckland, in Wānaka, Dunedin, Stewart Island and in Invercargill, where the company is now based. He started it more than twenty years ago on Stewart Island to supplement his income as a fisherman. He sources fabric from Designer Textiles International, has an in-house team to design and make all the clothes, and places a heavy emphasis on customer service. For him, everyone must leave the shop feeling they have been ‘cosseted’.30
Each of these companies has not only a product story but also a set of values to sustain them that amounts to more than the making of financial return. A recurring theme is how best to manage relationships between the different parts of the business, the more so when available business mentoring advice often amounts to little more than accounting guidance. A great deal of emphasis is put on developing reputational capital, much of which depends on building connections with both consumers and farmers alike. Belworthy recalls a customer visiting from Australia who bought several thousand dollars worth of stock; following her return home, online orders were received from around her suburb. Jeremy Moon has talked of the value of positive word-of-mouth, asking, ‘Would you recommend it to others?’ For him this is ‘the single most important motive in business’. Similarly relationships with farmers are critical. Each of these merino manufacturers relies on transparent relations with growers, whether through quality assurance systems such as ZQ or direct face-to-face contact.31
The transformation of the merino industry beyond the farm gate has considerably affected on-farm practices, although it is by no means the only cause of change on merino stations. Growers have had to respond to new quality management expectations from New Zealand Merino or PGG Wrightson and their brand partners. But many are strongly motivated to do so because, to quote William Gibson, it is part of the pride and passion that they have for working with merino as ‘the pinnacle of wool’. The contract system has provided some security of income and a small premium over market prices, permitting forward planning in a way that was more difficult when relying on erratic auction returns alone. But not all wool is sold on contract, and contract prices too are variable. In recent years, prices for finer merino have fallen, in part because Australian growers, who produce far more fibre than New Zealand, have moved towards fine and superfine wool, although prices for medium- and mid-micron have held up with new uses such as socks.32 The transformation in merino uses and meanings has therefore not necessarily boosted livings significantly, and growers continue to search for additional sources of income.
Merino farming is also beset by environmental risks that require active management, the result of most high country lands sitting more than 500 metres above sea level. John Perriam has said of the Italian owners of Reda, with whom he went into partnership, that they ‘struggled to get to grips with why the business couldn’t run exactly as it did in a controlled factory environment . . . it took a while for them to understand that on a farm your “factory” is controlled by the forces of nature’.33 This observation applies not only to the weather but also to the way in which stock is managed: it takes up to a decade to breed a flock for a reduction of one or two microns. But it is not only micron numbers that matter: brand partners require fibre of sufficient tensile strength, staple length and often a specific style, or crimp. Sheep that are stressed from harsh conditions may grow a fleece with thin spots in the fibre that break during processing.34 The animal welfare requirements of programmes such as ZQ assure a fit-for-purpose fibre as well as a well-treated animal. More recently, buyers have paid a premium for wool from farms that avoid the controversial practice of mulesing: removing folds of skin from the backsides of the animal to reduce fly-strike.35
Farmers must manage both risks and requirements to meet the expectations of the market. Visits from brand partners and New Zealand Merino’s own ground staff provide more transparent insight into these needs than in the days of not thinking too much beyond the farm gate. Flock management has been improved by electronic identification tagging of animals on a growing number of stations. This speeds up the recording of attributes such as micron, wool yield and carcase weight, in turn helping in deciding which merino to keep and which to sell to the works. A Primary Growth Partnership between the government, New Zealand Merino and merino growers is tasked with trying to make ‘better merino sheep’.36 Two aspects of this are breeding merino that are more resistant to foot-rot, as well as better meat producers. The development of these traits – by combining work in genetics, animal health and feed improvement – is to enable the extension of merino production outwards from the high country into low and wetter hill and plains country (Figure 4.6, overleaf).
Merino are agile movers, and spend the better weather at higher altitudes, shifting during the day to feed in different places. The rougher country is particularly suited to wethers. But the programme of high country tenure review over the last two decades, more fully described in Chapter 11 on Central Otago, has brought about a considerable reduction in access to mountain lands for many stations. Tenure review involves the surrender of ecologically sensitive lands, in exchange for freehold title to more intensively used pastures at lower elevations. As a result many stations have lost access to big areas, although fencing of the remaining blocks into smaller areas can compensate by giving greater control over grazing. Large-scale top-dressing and oversowing has helped boost stocking rates, alongside provision of better feed at lower levels, using strategies such as irrigation of sown pastures. New feed crop experiments include the planting of lucerne, pioneered in Marlborough, and the harnessing of Russell lupins, which had become invasive in parts of the Mackenzie basin in Canterbury.
Figure 4.6: ‘Better Merino Sheep in the Making’, Press, 8 May 2015.
Source: Fairfax New Zealand Ltd. Reproduced with permission
Overall sheep numbers have declined dramatically in New Zealand, from a peak of over 70 million in the early 1980s to under 30 million today. This is entirely accounted for by strong wool breeds; by contrast merino and half-bred numbers37 have been pretty much stable for the last twenty years. One aim of the Primary Growth Partnership, in seeking to extend the geographical range of the breed, is to grow the national merino flock to meet ongoing demand for the new fibre uses identified in this chapter. Another is to provide an additional source of income from meat. The marketing of merino lamb, fattened on introduced pasture to reduce its gaminess, was pioneered a decade ago under the Cardrona Merino Lamb label by a small group of farmers in Central Otago (see Chapter 11). Larger-scale production has been developed using the Silere branding by New Zealand Merino, initially as a joint venture with Silver Fern Farms, one of the country’s largest meat processors, and now with a competing company, the Alliance Group. Silere is marketed as a specialist meat with provenance, and in this respect fits well with current requirements of the restaurant trade for more flavour-some tastes.
Estimates of the income mix of high country farmers are that half or more comes from wool, a third or so from lamb and beef. and the balance from a range of activities such as tourism, wine and honey. The remoter runs may be more dependent on wool; accessible stations may make more money from tourism. The figures are a general indication only.38 But they do suggest that high country farmers are continually engaged in seeking new ways of making a living. In the same way, the New Zealand Merino Company, which was the product twenty years ago of high country concerns about the future of its main product, merino fibre, is always working to invest in relationships internationally to maintain existing brand partnerships and to add new ones.
Today New Zealand merino is widely known in consumer markets in Europe, North America and Asia, and closer to home, as a natural fibre used in a range of quality fashion, recreational and special-use garments. This transformation in the profile, uses and meanings of merino has come about as the result of a series of changes driven by companies based in New Zealand, notably New Zealand Merino and Icebreaker, as well as many overseas who are partnered with New Zealand Merino or other brokers, such as PGG Wrightson. These changes exemplify something special about the nature of value creation in the country’s biological economies. It is by no means driven only by science and technology, although certainly those play a part, for instance in the industry’s Primary Growth Partnership and in the ongoing search by merino breeders to improve the genetic attributes of their flocks. Rather, the key to merino’s new prominence has been cultural and organisational change.
This perspective can be summarised in a number of ways. The American chief executive of Global Merino encapsulates an important part of the argument in saying that it is ‘about figuring out market opportunities and what customer need [is] and determining how to meet that need and then do that’. He claims it is ‘not a complex formula’. Conversely, the Global Relationships Manager of New Zealand Merino says that the ‘business model sounds simple’, but emphasises that constructing the ‘wiring’ behind it is very complex. Part of that complexity is the effort and skill that goes into building the relationships that all the players, big and small, need in order to survive and thrive. Part of it lies in the ability to see opportunity in previously disparate components: as Jeremy Moon of Icebreaker says, ‘It took a helicopter view to make all the pieces fit together’.39
Underlying these changes has been a cultural shift on the part of growers and manufacturers, who have had to learn the benefits of working together rather than anonymously and at distance. The willingness of consumers to be persuaded of the advantages of layering fine-wool fabric next to the skin has also been critical.40 And that willingness has been oiled by the creation of storylines for New Zealand merino, in terms of attributes, provenance, naturalness and fashion, that have wrapped the fibre in an emotional message with increasing appeal and reach. This is perhaps the most remarkable thing for a product whose story had previously been all but lost.
Callaghan, Paul, ‘Peri Drysdale’, in Wool to Weta: Transforming New Zealand’s Culture and Economy, Auckland University Press, Auckland, 2009, pp. 39–49.
Hersey, Paul and Morrison, Derek, Merino Country: Stories from the Home of New Zealand’s Hardiest Sheep, Penguin Random House, Auckland, 2016.
Pawson, Eric and Perkins, Harvey C. ‘Worlds of Wool: Recreating Value off the Sheep’s Back’, New Zealand Geographer, volume 69, no. 3, 2013, pp. 208–20.
Perriam, John, Dust to Gold: The Inspiring Story of Bendigo Station, Home of Shrek, Random House, Auckland, 2009.
Stanford Graduate School of Business, ‘“Icebreaker”, The New Zealand Merino Company’, Stanford Online Case Study, http://www.nzmerino.co.nz/casestudy/icebreaker.php