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Feel Merino Marketing Campaign ISSUE 85 DECEMBER 2020 PROFIT FROM WOOL INNOVATION www.wool.com FEEL MERINO MARKETING CAMPAIGN 05 32 42 CHINA E-COMMERCE BLOWFLY INSECTICIDE SHEEP CLASSING CAMPAIGN RESISTANCE WORKSHOPS 10 WOOL FOR THE 52 SHEARING RUN COMMUTE SHED SAFETY EDITOR Richard Smith E [email protected] Australian Wool Innovation Limited OFF-FARM ON-FARM A L6, 68 Harrington St, The Rocks, Sydney NSW 2000 GPO Box 4177, Sydney NSW 2001 4 Review of Performance 28 Smart and efficient fence building P 02 8295 3100 5 China e-commerce campaign 29 Intensive production systems E [email protected] W wool.com AWI Helpline 1800 070 099 6 Feel Merino marketing campaign 29 The Yarn features Michael Caton SUBSCRIPTION 9 Move in Merino on Strava 30 AWI Change Makers R&D extension Beyond the Bale is available free. To subscribe contact AWI 10 Wool revolutionises the run commute 31 Grazing sheep on modern stubbles P 02 8295 3100 E [email protected] 12 Wool chosen for barefoot footwear 32 Blowfly insecticide resistance Beyond the Bale is published by Australian 13 EMU Australia expands sneaker range 36 AWI flystrike publications Wool Innovation Ltd (AWI), a company funded by Australian woolgrowers and the 14 Campaign for Wool UK 37 Biosecurity excellence Australian Government. AWI’s goal is to help increase the demand for wool by actively 15 McNair’s fully traceable shirts 38 Send in your maggots! selling Australian wool and its attributes 40 ParaBoss – your go-to website through investments in marketing, innovation 16 International Woolmark Prize and R&D – from farm to fashion and interiors. 17 Celebration of women in wool 42 Sheep classing workshops COPYRIGHT 18 Merino wool: asthma & allergy friendly 44 Wether trials update Material in Beyond the Bale is copyright. 19 Merino duvet covers and pillowcases 45 Merino Superior Sires Reproduction of the material is encouraged. However prior permission must be obtained 20 Laundering makes Merino sparkle 46 Merino Lifetime Performance from the Editor. 21 Snooza pet futon 48 AWI breeding publications DISCLAIMER 49 PestSmart pest animal resources To the extent permitted by law, Australian 22 Learn About Wool school resources Wool Innovation Ltd excludes all liability 23 Paddock Pen Pals beamed into class 50 Hunter Valley bites back against dogs for loss or damage arising from the use of, or reliance on, the information contained in 24 Top marketing students work with wool 52 Shearing shed safety program this publication. The Woolmark symbol is a certification mark 25 Squatter board game relaunched 54 Shearer and wool handler training registered in many countries. © 2020 Australian Wool Innovation Ltd. All 26 Woolmark Learning Centre 55 Self-massage for shearers and farmers rights reserved. 56 School Merino Wether Challenges ADVERTISING SALES 57 Succession planning Steve Luxford, Pulse Hub Pty Ltd P 0429 699 553 58 Market Intelligence update AWI INVESTMENT STRATEGIES E [email protected] Advertising is subject to terms and conditions Sheep Production, 60 EMI in the age of COVID Marketing Consultation published on the ratecard, which is available Science & Technology from Pulse Hub. 61 WoolQ: part of the digital revolution Processing Innovation Traceability ISSN & Education Extension 62 Readers’ photos 1447-9680 CONNECTING WITH AWI AWI E-NEWSLETTERS: FRONT COVER To subscribe to the free monthly AWI e-newsletter Woolgrower Dave Ward from ‘Spring Ponds’ wool.com near Goulburn, NSW, features in AWI’s new for woolgrowers, and the weekly wool market review ‘Feel Merino’ marketing campaign – see page 6. e-newsletter, visit www.wool.com/subscribe [email protected] This magazine is printed on PEFC THE WOOLMARK COMPANY (Programme for the Endorsement of wool.com/podcast Forest Certification) paper stock. woolmark.com twitter.com/woolinnovation twitter.com/woolmark facebook.com/AustralianWoolInnovation facebook.com/thewoolmarkcompany youtube.com/AWIWoolProduction youtube.com/thewoolmarkcompany Instagram.com/AustralianWool Instagram.com/thewoolmarkcompany BtB View Beyond the Bale online at http://beyondthebale.wool.com AWI STATE-BASED GROWER NETWORKS AWI-supported networks are present in each state. • Sheep Connect NSW • BESTWOOL/BESTLAMB (VIC) • Sheep Connect SA • The Sheep’s Back (WA) • Sheep Connect Tasmania • Leading Sheep (Qld) Find your grower network at www.wool.com/networks or call the AWI Helpline on 1800 070 099. GD3895 UPFRONT 3 GETTING ON WITH BUSINESS Throughout the global COVID-19 pandemic, AWI has continued Stuart McCullough Chief Executive Officer to work relentlessly for woolgrowers to ensure the sustainability Australian Wool Innovation of our industry and profitability for your enterprises. AWI CUTS BACK July last year, and the fall in Australia’s wool For instance, many knitwear manufacturers production caused by the drought. are working at levels similar to prior to the ON SPENDING AS pandemic, and the loungewear and activewear REVENUE DROPS AWI operates in a lean, efficient and sectors are seeing rises in demand. transparent manner, but just like any business AWI’s Annual Report for 2019/20, which was with a reduced income, we have had to make We consequently recently released funds to published in October, shows that AWI reduced cutbacks in staffing and projects – and we launch an activewear marketing campaign in its expenditure during the year by 22% will have to continue to do so as long as our the US promoting Merino wool as a natural compared to the previous year, to $77 million, revenue falls. We have cut staff numbers from fibre that is soft on the skin and ideal for sports and we are having to reduce our expenditure 175 a year ago to presently 153 and plan to cut and outdoor pursuits. A key element of the even further during the current financial staff numbers further, to 125 by 30 June 2021. campaign is to drive purchases of commercially year. Furthermore, the company used nearly available Merino wool performance wear on $8 million of its reserves last year and we will Although we have healthy reserves at the e-commerce giant Amazon.com. once again dip into reserves in 2020/21. moment, built up during past years for tough times like right now, continued drawing down on The one crucial market that has bounced These cuts in expenditure and reserves are our reserves is not sustainable in the long term. right back from the disruption caused by in response to the company’s deteriorating COVID-19 is China, which is very fortunate revenue which in 2019/20 fell by nearly a View details of AWI’s revenue and for Australian woolgrowers because the third compared to the previous year and is expenditure in the 2019/20 Annual Report vast majority of Australia’s wool is exported forecast to fall even lower during 2020/21. at www.wool.com/annualreport. there for processing – in the first quarter Our total revenue is to a large extent of the 2020/21 season, more than 90% of dependent on income from the wool levy, GLOBAL MARKETS Australia’s exported greasy wool went to which has been badly affected during WEAK, BUT THERE China. Furthermore, half of that wool is 2019/20 (falling by nearly 45% compared ARE POSITIVES consumed at retail in China. The country has to the previous year) due to the fall in the a large population, a growing affluence, and EMI, the reduction in the rate of wool levy The COVID-19 pandemic continues to be a a climate that is ideal for wool. from 2% to 1.5% which came into effect on 1 terrible health crisis that impacts the world economy. Unfortunately, many large wool- To make the most of China’s economic resilience, consuming countries, especially in Europe, we recently released funds there for a major have had to go into another lockdown in the marketing campaign involving 200 brands 120 and China’s largest business-to-consumer Total revenue past few months in response to a second wave of the virus. This has negatively e-commerce platform, TMALL. We continue to Total expenditure work closely with our industry partners in China 100 impacted the consumption of apparel products in many key markets and sectors to maintain the Australian wool industry’s good during wool’s important autumn retail relationships in the country. season in the northern hemisphere. 80 The demand for wool at retail in Japan and Wool’s traditional sectors of suiting and South Korea is also looking resilient at the formal attire have continued to be especially moment and we have been doing some test 60 badly hit as many people are still restricted marketing in those countries. to working from home and spending much of their leisure time at home too. FOCUS ON DIGITAL 40 BRINGS REWARDS AWI must be particularly smart about when, It is no coincidence that our two recent where, and indeed whether it is prudent to campaigns in the US and China involved 20 actually spend woolgrower funds – and this collaborations with Amazon and TMALL, two is especially the case with our marketing of the largest and most mature e-commerce activities at the moment. We have made platforms in the world. We have also very 0 cutbacks in marketing expenditure to the 2018/19 2019/20 2020/21 recently launched a campaign with Zalando, extent that AWI is currently operating with budgeted a large e-commerce platform in Europe. spending split 50:50 between marketing and R&D, rather than the usual 60:40 split. This direction towards marketing via AWI revenue and proven and robust digital retail platforms However, there are still some positives for wool expenditure ($million) is a response to the increase in purchasing at retail, with several sectors showing promise. of goods online by consumers, a movement CONTINUED ON NEXT PAGE 4 UPFRONT CONTINUED FROM PREVIOUS PAGE accelerated by the closure of brick and reproductive efficiency of ewes, improving LOOKING FORWARD mortar stores due to COVID-19.
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