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NZ Merino: From commodity to market leader

NZ Merino chief executive John Brakenridge made a splash at Better By Design this year with his own brand of design thinking. As an example of his company's ambition, he presented this photo to demonstrate a 'ram on the moon' (as well as some sheepish lunar, er, intimacy, which I didn't manage to capture in time).

Wool is a prime example of a commodity, and when NZ Merino began in 1994, that was very much the case.

“When we started we were told we were a sunset industry,” Brakenridge says.

But with some clever, nimble moves, NZ Merino has managed to reposition itself.

He credits design thinking for much of that – crafting ways to meet demand based on observation of customers, markets and trends – a creative approach to business.

The market at the time of launch was "very simple, very combative, very much red ocean". By that, he means a market that's very tightly defined, with a lot of competitors in the same space fighting for market share.

In contrast, NZ Merino decided to forge a new space for itself and take a differentiated route. That 'blue ocean' path involved attracting brand new customers, fresh demand and creating a new, complex, uncontested market for merino wool. Thus, they left their competition behind as they became largely irrelevant.

Brands that make shallow statements will be exposed in today's increasingly transparent, social world, he believes. And New Zealand has plenty of authentic opportunities to fill in for those brands. Brakenridge says we have better fibre, better animal care and better performance. Markets to be tapped into include lanolin and leather, nutraceuticals, and even powdered sheep's horn,

We've been riding a commodity boom for some time, and that's something NZ Merino has taken full advantage of. It's moved from selling at auctions to selling through long-term contracts, nurturing "narrow and deep relationships". It has 12,000-plus grower contracts and 1500-plus market contracts with almost nil default, apparently. 

"If they’re not successful, we’re not going to be successful on a sustainable basis."

Choose your brand partners wisely, says Brakenridge; collaborate with those with whom you have shared values, and you're away.

He also shared the following video about the meat industry, which we'll leave you with.

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