Digital traceability platform to advance the Australian wool industry
Ground-breaking innovation through new supply chain-enabled digital traceability technology has the power to enhance the profitability of the wool industry and short-circuit an outdated system, says TerraProtein partner, Hamish Webb.
The Australian wool industry has laid dormant for many decades, receiving low levels of investment and innovation compared with other agricultural sectors.
With record-low flock numbers and near-record prices for wool in recent months, industry fundamentals are now prompting a shift, positioning the Australian wool industry for a new wave of growth.
Enter the adoption of new digital technology in agriculture, coupled with burgeoning consumer expectations surrounding transparency and sustainability, its no wonder pioneering companies such as MyOrigins are raising their heads.
MyOrigins is an Australian-based technology company connecting premium and ethical merino woolgrowers to leading international mills and fashion labels. The first of its kind, it uses digital technology including blockchain to verify and improve the supply chain for woolgrowers, processors, and end-users.
TerraProtein partner Hamish Webb says MyOrigins presents ground-breaking innovation in what has been an “archaic and clunky” supply chain for almost two hundred years.
“A bale of wool produced in Western Queensland for example requires road, rail, and even shipping transportation just to reach a warehouse for testing and auction – all at the producers cost,” Mr Webb says.
“Once purchased, that same bale goes back onto another ship for processing, usually in Asia or Europe. Thanks to MyOrigins, our vision for that bale is to be sold as soon as it’s pressed, then transported straight out of the shearing shed to the customer.”
MyOrigins brings supply-constrained buyers of wool to the woolgrowers doorstep which effectively allows the grower to differentiate and decommoditise their wool and establish a direct sale to a customer seeking a premium product.
Source: Australian Government Dept. Ag & Water Resources, NewMerino, British Wool Marketing, Wool Statistics; International Wool Trade Organisation; Economist Intelligence Unit
Beyond supply chain innovation, Mr Webb says premium wool markets such as the US, Europe and high-end Asia, are seeking more than quality – they are now seeking certified adherence to high standards in animal welfare and environmental sustainability.
“We know for a fact that there is an ever-increasing uptake and adoption of Sustainable Supply Chain Management processes and Corporate Social Responsibility practices when it comes to food and fibre-related industries,” he says.
“This is an important trend for many reasons. First, fashion is often considered to be one of the most environmentally harmful industries on the planet. As such, the apparel sector is uniquely placed to address key environmental and sustainability challenges it may face, and is therefore under a greater obligation to promote and support transparency. MyOrigins bridges that gap perfectly.”
TerraProtein has been engaged to accelerate the growth of MyOrigins and in a large part, ensure merino woolgrowers can maximise their price for a premium product.
By connecting the woolgrower directly to the brand who is seeking (and purchasing) ethical wool, MyOrigins allows the woolgrower to become a price maker, not a price taker.
Pictured: MyOrigins founder, Andrew Ross
MyOrigins founder, Andrew Ross, whose corporate career spans three decades in information technology and supply chain logistics, is enthusiastic about changing the merino wool industry forever.
He says most premium fashion brands that require ethical wool are struggling to source it because demand is outstripping visible supply. Best-in-class standards are required to receive ‘ethical certification’, including non-mulesed wool production and using environmentally sustainable processes on-farm. Presenting Australia’s ethical credentials in merino wool production has never been a priority due to the industry's commoditised production focus.
“Ironically, many Australian wool producers do all that is necessary to meet global consumer standards, but they aren’t necessarily receiving a premium for their wool. MyOrigins seeks to change that and maximise the price for the producer,” Mr Ross says.
“Sourcing ethical supply is no problem, with approximately 3,000 registered growers in Australia, however the rest are missing an opportunity to export the whole story. My objective is to build a supply chain-enabled by digital traceability which will enhance the profitability of the wool industry through premiumisation, boost their reputation as sustainable and ethical wool producers, and allow brands to source premium wool more easily.”
Its high time Australia kept pace with its competitors, in order to maintain and grow its place in the global wool market. In 2018, New Zealand, another large wool producer, banned all mulesing, implementing a country-wide ethical standard across 100 per cent of the nation’s production.
Mr Webb believes that in Australia there may be as many as 10,000 wool producers who have ceased mulesing. Of that, as few as 180 woolgrowers are independently certified as non-mulesed producers.
“So, for Australia to compete with and supply into the same markets as New Zealand, we need more producers to adopt ethical certification to show the high-end buyers that we are as good as them,” he says.
“From a business perspective, if we take a large part of that market, MyOrigins can become the funnel through which a large amount of the world’s premium, ethical wool will flow. This presents a great opportunity to create future value and we’re delighted to have many wool growers as MyOrigins shareholders to share in that journey with us.”
Adding to this opportunity, in recent years, investor adoption of ESG (environmental, social, and governance) and the subsequent growth in ESG assets under management has accelerated markedly. Leading institutional investors are incorporating ESG factors into the investment process, according Morgan Stanley Capital International.
Mr Webb notes that both ends of the wool supply chain are affected by the ESG movement.
“The end-user (customer) wants more ethically-certified products. And, more producers want to decommoditise their product and target these premium markets,” he says.
“We refer to the MyOrigins business model as ‘book-ending demand’. We are giving customers what they want – because it’s all about the customer – but simultaneously, we are recognising and satisfying a need for producers.”
Woolgrowers seeking further information on how to secure a premium for their ethical product can find out more information here.