SmartWool Corp. has entered into a sourcing partnership with The New Zealand Merino Company, an agency representing merino wool farmers in New Zealand. The seven-year contract guarantees minimum price levels for New Zealand wool growers producing merino wool for use in SmartWool's products.
In addition, SmartWool President Chip Coe told SNEWSÂ® that the contract also pays a premium price to its growers to reward them for their efforts to end the controversial practice of "mulesing" sheep by the end of 2005 -- many years ahead of the goal of ending the practice by 2010, as recently established by the Australian and New Zealand wool industries.
The new contract, which is the third in a series of multi-year contracts between the parties, makes SmartWool the single largest branded purchaser of New Zealand merino wool through The New Zealand Merino Company.
Icebreaker, the New Zealand-based merino wool clothing company, told SNEWSÂ® that the company has been providing minimum level contracts directly with growers, and not utilizing an agency, since 1997.
"Partnering with growers (like SmartWool is doing) is to be commended," Icebreaker CEO Jeremy Moon told us. "We started direct contracts with the leading growers based in the Southern Alps of New Zealand to ensure that the pure merino we sourced for Icebreaker was of a high and consistent quality every year. We gave growers two-year contracts that locked in minimum prices that guaranteed them profitability, and locked in maximum prices so Icebreaker remained competitive. At the time, it was revolutionary and a real win/win breakthrough."
Only three companies that SNEWSÂ® is aware of -- Icebreaker, SmartWool and New Zealand-based Designer Textiles International -- are now purchasing merino wool using this sustainable model to ensure that wool growers, who rely on an open-range farming method, have sufficient financial guarantees to reinvest in stock and facilities, finance additional property acquisition, and avoid morphing into the U.S. livestock model of feedlots and overcrowded farms.
Historically, merino wool has been bought and sold at auction, with no connection between the end-user of the wool and the wool grower. Thus, the wool grower had no appreciation for the intended use of the wool and, consequently, did not raise sheep or produce wool to meet specific quality standards. Â
Coe told us that this new contract is just another example of SmartWool's "SmartPrint" program, through which SmartWool is committed to leaving a smart footprint on Earth for future generations.Â
"We are absolutely committed to working with our growers to establish good business practices that focus on continuous improvement in animal welfare and environmental practices, and that ensure economic sustainability," Coe told us.
Moon told SNEWSÂ® that while mulesing is not as widespread a practice in New Zealand as it has been in Australia, he has committed his company to only purchase merino wool from growers that guarantee they will not mulesing their sheep.
Mulesing entails cutting away folds of skin around a sheep's butt to prevent the sheep from becoming infested with maggots. That added premium that SmartWool is paying in the contract will go, Coe said, to absorb the additional cost that growers will incur to monitor the health of non-mulesed sheep.
SNEWSÂ® View: In reading the release from SmartWool, a lot is made of the size of the deal, leaving some to debate about relative sizes of the companies using merino wool and as a result their importance on the global market. Bottom line to us is that size really isn't the issue here. What is important is that under Jeremy Moon's leadership, Icebreaker started something pretty cool in the late '90s -- a sustainable model for rewarding growers and controlling the quality of wool the company received. SmartWool is emulating and building on that model, and now by paying a premium to eliminate mulesing, taking an important stand ethically on a very public stage. We're glad to see Icebreaker is also on board, as we knew it would be. We hope other companies using merino wool will also step up to the plate to ensure that growers in both New Zealand and Australia are inspired, encouraged and given reason to invest in open range farming that is sustainable and promotes animal welfare. And we applaud SmartWool President Chip Coe for being invited to address the International Wool Textile Organization congress next month, the biggest meeting of wool producers in the world to speak on that very topic of sustainability in merino wool growing.