Independent progress review of the Wool Unleashed programme

Wool Unleashed (W3) is a 7-year programme that aims to boost value and returns to wool growers, processors, and marketing partners.

Background to the W3 programme

New Zealand's strong wool industry has become less profitable over the decades. This has caused uncertainty for wool growers and others.

The W3 programme was launched in February 2016 to help tackle this. It aims to change the way our strong wool is produced, marketed, and sold.

The programme is led by The New Zealand Merino Company (NZM), with investment from Ministry for Primary Industries (MPI) under the former Primary Growth Partnership (PGP).

Progress review of W3

As part of its monitoring and governance process for PGP programmes, MPI commissioned an independent progress review of W3. This looked at the programme's progress towards meeting its goals and made recommendations to help it succeed.

Download the Wool Unleashed (W3) evaluation report [PDF, 1.5 MB]

What the progress review found

  • W3 is a promising example of "moving up the value chain". It is an excellent example of how the strong wool sector can transform.
  • W3's/NZM's relationship with growers and others in the supply chain has helped the project to quickly make progress. Another company would have been "very unlikely" to achieve this.
  • Growers strongly support the programme. They feel more visible to consumers and market-facing brand partners, and can earn premiums for contracts.
  • Brand partners reported an "immediate and impactful benefit from the marketing expertise" provided by NZM. This was the key reason for winning some supply contracts.
  • W3 has the long-term commitment from leading growers and manufacturers, such as Landcorp (Pamu).
  • W3 has "very warm and positive linkages" with other primary sector groups, and information is being shared between the parties.
  • W3 has provided value to brand partners and consumers, and its approach to sustainability is "leading edge".
  • W3's business development and design has provided useful insights and enabled the development of "exceptional quality" prototypes and collateral.
  • Design specialists were included in early workshops. This helped generate and test product concepts, developed relationships with third parties, and increased collaboration.
  • The reviewers concluded that W3 has a "plethora of strong positive relationships" and contractual arrangements with suppliers, which has quickly resulted in sales.
  • W3 has taken a "pragmatic and practical approach" to generate revenue from its first year. Experienced people have helped the project identify potential brand partners.
  • W3 successfully scoped key target segments by building initial relationships early. These segments include floor coverings and furnishings.
  • Some brand partners lack marketing resources and budget, so W3's support and marketing material has been an excellent way to add value to relationships.
  • W3 has used market insights to create marketing material that "will likely appeal to potential brand partners" and encourage product development.
  • W3 is "doing the right things", but it has taken longer than expected to reach its targets.
  • W3 is having some success facing challenges and ensuring experience and expertise is transferred within the sector. It will continue to be a challenge to scale this up.
  • W3 has delivered grower premiums averaging 38% for brand contracts. This could be affected by factors such as the margins extracted by spinners and traders, oversupply of wool, and auctions and tender sales of unbranded product.
  • W3 is encouraging existing brand partners to use more wool, but it may not have enough brand partners to achieve its outcomes.
  • The original estimate of $219 million in economic benefits may not be realistic now, but the net economic benefit is still likely to be positive.

The progress review's recommendations

  • W3's cost benefit analysis should be recalculated to ensure it reflects uncertainty in wool sales volumes.
  • A robust system for tracking the programme's delivery should be developed, including key performance indicators.
  • Market segments should be assessed to identify the characteristics the programme wants in future brand partners, given W3 has already approached many of the "most attractive and culturally-aligned" brands.
  • Feedback should be collected from purchasers of strong wool to ensure their needs and decision-making are well understood.
  • A new member should be appointed to the independent programme steering group. They should have experience in governance, supply chain management, contract manufacturing, export marketing and market entry strategies, new product design and innovation, technology and product commercialisation, and intellectual property.
  • Strong wool growers should be introduced to the aspects within the W3 programme relating to "social licence to operate", such as specific niche requirements of leading early adopters.
  • A formal feedback channel should be developed to get market insights, brand partner feedback, and grower input into the development of the project's "ZQ" brand.
  • W3 should continue to work with a small number of third-party product developers in order to concentrate efforts and achieve tangible outcomes.
  • W3 should work with selected spinners to develop viable operational and cost models for spinning ZQ wool. This will help to show the value of the ZQ value chain.
  • Regenerative agriculture principles should be integrated into the W3 programme to show its value to brand partners.
  • More market segments should be identified to help meet volume targets.
  • Large contracts should be added each year to meet sales targets, grow the existing base, and prevent attrition within the strong wool sector.
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