Over a decade of investment in research and marketing demonstrated the benefits of merino wool worn next to the skin, creating a generational shift in preferences and growing global demand for merino as a technical base layer.

Back in the ’90s, a Kiwi kid heading off on a school tramp would carefully pack their striped thermal ‘polyprops’. Today, that packing list more likely mentions a merino base layer. That generational change is down to a decade-plus of focused R&D that proved New Zealand merino wool could compete with synthetic performance fabrics, and resulted in more stable income for Aotearoa’s merino sheep farmers.

Much of that R&D was driven by the New Zealand Merino Company (recently rebranded Zentera), which transitioned from an industry good body to a commercial company in the late 1990s.

“Our mission was to shift sales from auction to contracts, so we could give growers confidence and certainty of price and demand,” explains New Zealand Merino Company chief customer officer Dave Maslen, who has been with the company since 2006. “We couldn’t sell forward contracts to brands unless we offered them something they couldn’t get at the wool auction, so R&D and marketing became very important.”

Using a broader range of the wool clip was an important part of this strategy. Most performance merino fabric was once 19 microns or more, and it was almost unheard of to use wool finer than 17.5 microns. That changed in 2009, when the New Zealand Merino Company and Icebreaker collaborated on a project to investigate 16-to-18-micron wool, part-funded with $80,000 from AGMARDT.

The project was a success, with tests confirming the finer wool was soft against the skin and, importantly for activewear, durable. Brands could use this evidence to justify premium pricing, with the project’s final report estimating potential value to growers of around $1/kg, a significant value-add.

Icebreaker made the decision to include 16-to-18-micron wool in some product lines, and contracted 1573 bales of 16-to-18-micron wool from New Zealand growers, a 500% increase from the 314 bales in the previous season. Today, Icebreaker products include merino ranging from 15.5 to 22 micron.

AGMARDT first supported Icebreaker in 1996, the year after it was founded, with $36,563 for ‘Merino fabric development’, although detailed records of this early grant unfortunately no longer exist. What we do know is that Icebreaker was purchased by VF Corporation in 2018 for $273 million. Its clothing is sold through more than 3000 wholesale customers in 38 countries, and in 2022 global sales were around $260 million.

At least 13 merino-focused projects received AGMARDT funding between 1988 and 2017, with grants totalling around $1.2 million. The funding evolved from foundational science to premium product innovation and market development, supporting the industry’s development along the value chain. The New Zealand Merino Company was a recurring recipient, with grant support totalling around $380,000 over that period.

Capability building, particularly in wool classing, was another area where this support was really valuable, says Maslen. “The wool classer has an enormous responsibility to optimise the value of the growers’ wool clip,” he says. “Classing to specific markets, like Italian woven and tailored versus active outdoor and circular knitting types, can be quite different, and so classing can have a really significant impact on grower bottom lines.”

“Classing can have a really significant impact on grower bottom lines”
– Dave Maslen, New Zealand Merino Company

 

Two AGMARDT grants (‘Optimising wool production preparation and classing to maximise wool clip value’ for $58,812 in 2007, and ‘Enhanced understanding of merino fibre length and strength’ for $32,456 in 2008) informed the development of the training programme Fibre Select, later replaced by a classer internship programme. “Fibre Select was an education tool that really led to a lift in classing to a specific contract, and helped growers understand and optimise their wool testing,” says Maslen.

These AGMARDT-funded projects complemented a range of other research looking at merino wool performance, such as odour resistance, heat and moisture management. This scientific foundation gave brands confidence in New Zealand merino quality and consistency, and gave growers confidence to breed towards specific contracts, and assurance there would be premium buyers for their entire clip.

This sustained R&D strategy has proved hugely successful, helping transform merino wool into a premium, internationally recognised New Zealand product with significant added value.

“It all added up to this knowledge bank of merino wool attributes and benefits,” says Maslen. “All of that information laddered up to Icebreaker and a suite of other key customers, eventually enabling us to transfer a lot of that knowledge to other brands as well, like Smartwool, Designer Textiles International, Aclima, Reda, and Helly Hansen. It helped position New Zealand wool on the global stage.”

Over 130 brands are now supplied via contracts with the New Zealand Merino Company, and New Zealand merino (at a wide range of microns) is used in premium performance wear all over the world – from elite athletes, to Kiwi kids swapping their parents’ old polyprops for merino base layers.

Grants included:
9511      Merino fabric development
9546      The Merino Plan – a unique identity for NZ merino internationally
20717   Optimising wool production preparation and classing to maximise wool clip value
825        Enhanced understanding of merino fibre length and strength
928        Innovation in 16-18 Micron Wool

Dates: 1996 – 2009