New carpet brand targets wool price

Brand Content strategy lead and chief operating officer Karl Johnson.

13-07-2009 | Robert Pattison

Persuading Americans to buy New Zealand wool carpets is a key aim for a new carpet brand.

Keen to increase returns to NZ strong-wool growers, Elders Wool Marketing Enterprises (WME) wants to go further than past initiatives and increase demand for luxury wool carpets.

WME approached Brand Content, a company based in the United States with experience in marketing agricultural products.

The Just Shorn brand has been designed in partnership with CCA Global. Their retailer network in the US includes International Design Guild, ProSource, Carpet One, Floor and Home and Flooring America.

CCA Global is buying into the business partnership on an exclusive arrangement. They have a turnover of more than US$4 billion and will feature the Just Shorn brand in their retail advertising programmes.

WME owns the new brand. Maintaining tight control of the flow of wool from farm to retailer is critical for its integrity. How big the project will be or how much wool will be needed is not yet known. The key focus is that a share of the added value will be passed back to strong-wool suppliers.

Elders is not asking farmers for money up front, but is seeking a commitment to a supply of the best-quality carpet wool in the world.

Elders Primary Wool director and deputy chairman of Primary Wool Co-operative, Howie Gardner told a group of South Otago farmers at a recent meeting, farmers supplying wool for the Just Shorn carpet programme will be expected to become shareholders of Primary Wool Co-op.

At the meeting, CCA Global South Otago farmers were invited to meet the man behind the brand strategy.

Brand Content strategy lead and chief operating officer, Karl Johnson, of Boston, Massachusetts, told farmers any branding strategy had to target what consumers wanted.

"That might sound simple enough but you have to get into consumers' heads and understand their attitudes and buying-decision process," he says.

Johnson has extensive marketing experience in the consumer products industry. He has worked with Pepsi Co, Cadbury Schweppes and Ocean Spray. He was the architect behind the Ocean Spray brand for marketing 80% of the world's cranberry crop. His task was to figure out how to maximise revenue for cranberry growers. The marketing programme doubled the price of a barrel of cranberry fruit within two years.

Essentially this is what Elders WME hope Brand Content can do for NZ strong-wool growers.

The carpet and wool industries are new to Brand Content, but Johnson says the formula is the same. He is looking to add value for NZ strong wools through brand and product innovation, as was achieved with Ocean Spray.

The challenge is to design a business model that passes the retail price premium back to strong-wool growers. Every part of the supply chain from farm to retailer has to be committed to a transparent pricing structure. WME wants a business model where every sector can see its profit and loss.

While there is no commitment to actual wool price yet, Johnson says doubling the price of NZ strong wool has a minimal impact of $3-$4/square yard on the retail price for carpet in the US. That is only a couple of percentage points and isn't likely to cause consumer price resistance.

The first part of the branding process is to understand what people think about when buying carpets and rugs. While maintaining a global focus, there has to be an acknowledgement that consumer buying habits are different around the world. There is also a need to understand what is happening at the micro level, particularly in the US. People are different from city to city and town to town.

Having eyes and ears on the ground in the marketplace was the key to WME's decision to saddle up with Brand Content. Hundreds of hours have been spent on the creative development process of building and agreeing on the foundations to support the brand and its imagery.

The deadline for launching the carpet and rug collections under the Just Shorn label is at the CCA Global annual meeting in January, 2010.

In the US people buy carpets only every seven to eight years. Wealthier people employ interior designers who are looking for luxury home furnishings. Wool doesn't occupy this part of the market on its own.

Woollen carpets have only a 4-5% share of the US market, so a huge opportunity exists to increase market share. High-quality synthetic carpets are the main competitor.

Sustainability has become an important issue for consumers. Luxury carpets made from NZ wool have a compelling marketing story. For consumers with a quality focus the Just Shorn brand weaves a tale of wool, nature and the environment. There is also an extra meaning behind the words Just Shorn - sheep don't have to be killed to produce carpets.

Sustainability and fair trade has become a profitable part of business, with premiums of up to 40% for products perceived as environmentally sustainable.

CCA Global knows that when customers walk into their retailers' shops they want to buy flooring products. Their aim is to trade them up to a higher level, and wool carpets fit the bill for price and sustainability.

Johnson says the business model and operating structures are the winning propositions. All partners in the project are big in the wool business and have the same commitment to quality as farmers.

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