The Trickle-Down Effect

If U.S. growers don’t think the quality of their cotton matters, there is something they should consider. Yes, it is true most international mills need certain middling grades, and they are looking for the lowest possible price. But now U.S. growers are the residual suppliers, and when you are in that situation, it pays to differentiate yourself and specialize in that niche. The best bet for U.S. cotton growers could be to improve their quality slightly, filling the gap between standard mid-grade and super luxury Pima cottons.

This story is the second installment of coverage from the Certified FiberMax Quality Summit that Cotton Grower and Cotton International editor Drew Harris attended in December 2007 in Dubai, United Arab Emirates. The first story covered a question-and-answer session with a panel of cotton growers from Texas. See the January 2008 issue of Cotton Grower for that story.

But it’s ultimately not the international mills dictating this trend; it’s the U.S., European and other developed countries whose consumers are demanding more from their clothing dollar. The United States is the largest market for high-end cotton apparel and home furnishings, and consumer shopping patterns now have more influence on those goods than ever before in retail history. In a fashion landscape where Nike and Converse offer custom-designed shoes on their web sites, and a smorgasbord of companies let customers design their own T-shirts over the internet, consumer demand is the ultimate driver in the retail arena.

In this quickly changing market, what underlying factor is the common denominator for most customers? Whether they shop at Target or Saks Fifth Avenue, customers want more for their money — they want to get the best deal for the highest quality goods. For decades, textile manufacturers and garment makers have excelled at finding faster, less expensive ways of turning out a finished product. As the playing field is leveled by technology, these manufacturers must find ways to differentiate themselves from the masses in the textile market, catching the eyes of retail brands and ultimately the consumer.

Differentiation is Key

In this scenario, quality is the great un-equalizer. If two manufacturers can meet a retail brand’s demand with price, quantity and delivery time (and the competition in these areas is fierce), then quality is the deciding factor.

However, quality is a curious thing. Textile manufacturers can mitigate internal problems that slow down production or increase costs. And while spinning techniques, unique finishes and other technologies help to ensure quality in the finished textile, generating quality products ultimately begins with the fiber: seed genetics, crop management practices, ginning, packaging and shipping.

From a 30,000-foot view, quality relies on the entire supply chain, beginning with seed companies and growers and continuing through the chain to spinners, weavers and garment makers. In the end, retail buyers and purchasing agents have a vested interest in quality as well. They are the eyes and hands of the consumer; their choice for quality means more units sold at the local retail store.

Last December, shareholders all along the supply chain met in Dubai, United Arab Emirates, for the Certified FiberMax Quality Summit, organized by Globecot. The summit included FiberMax representatives, Texas cotton growers, cotton merchants, spinners and textile manufacturers from Bangladesh, India, Pakistan and Turkey, textile machinery companies and sourcing agents from retail brands.

Participants at each stop along the textile supply chain discussed how they could work together to ensure quality throughout the process and provide consumers with true value-added finished goods.

Start at the End and Go Backwards

If you want to know if quality matters, ask the average textile consumer. She wants the highest quality, most fashionable finished good at the lowest price.

“The retail landscape in America continues to change. The shopping patterns that existed five years ago have evolved and will continue to evolve through the balance of this decade,” said Gary Ross of Liz Claiborne.

“Consumers have more choices today than they have ever had — there are too many stores with too much product chasing too few customers. Retail space per person continues to increase every year, not to mention the increase of online shopping, which has grown 12% year-on-year for the last four years.

“Because of the consumer, the demands of retailers are also increasing,” Ross continued. “They expect exclusivity, innovation and flexibility. This is the new reality — it is no longer business as usual. We need to manufacture more of what the consumer wants, instead of what we think she wants.”

What the consumer wants is simple — she wants a good deal. Ross said there are no longer any stigmas associated with shopping at different retail stores. People will buy some of their wardrobe at Bloomingdale’s and some of it at JCPenney. “Consumers are more value-conscious and have tighter price-value expectations. Being a smart shopper is just as important as wearing prestige brands. It is not how much you pay, but the deal itself,” Ross said.

In this environment, U.S. retailers must capitalize on both price and quality, and international textile manufacturers will adapt to the landscape or fail. Why? There is always another textile supplier clamoring for the business. Textile mills around the world are trying every day to find a way to produce a product cheaper.

When low prices bottom out and reach parity, quality wins. Carly Beumel, an instructor at the Fashion Institute of Technology in New York City and buyer for Talbot’s, explained how this impacts her buying decisions.

“The reality is that there are so many textile mills on the global landscape today that there is always a supplier that can do something a little bit better, a little bit faster and with a little bit better value. The more vertical a supplier is the better value I get, because I am cutting out all of the middle people in between,” Beumel said.

Back to the Fiber

Spinners, weavers and knitters can invest in all the technology available, but if their raw materials are not suitable, they will never produce the quality that retail brands and consumers demand. Beumel said high-quality raw materials are a key differentiator, and she said her clients, as well as the consumer, are willing to pay premiums for that difference. She believes the customer has a high threshold for price, if the product is exactly what she wants or exceeds her expectations, and pointed to the success of the premium and luxury retail markets.

“There is an absolute consumer response to using premium raw materials, and we are willing to pay the extra investment to have that premium raw material in that fabric. I have touched thousands of swatches, and if you make that added investment, that’s what I am looking for to pass the quality along to my company,” Beumel explained.

Looking to fill this need for quality and reliability in raw fiber, Monty Christian, director of marketing for Certified FiberMax, said his organization is the only cotton seed company that is branding and marketing to retailers, textile manufacturers and cotton producers. Through events such as the Fiber Quality Summit, Christian hopes that FiberMax quality can be maximized from boll and bobbin to finished goods.

“The summit’s purpose was to get a continuous message throughout the supply chain and to get them talking to each other so they realize the vital roles they play and how they can work together maximizing fiber quality through Certified FiberMax,” Christian said. “We are the only key producing company that is working with mills internationally and moving even further downstream to make contacts with retail. The vision we want for growers is that there is downstream demand for branded FiberMax cotton. So we are trying to help create these networks for those people who want to have a little better product that is differentiated in the market place — we want to bring those people together.”

Working with textile mill operations, Christian said Certified FiberMax has developed more than 20 different 100% Certified FiberMax fabrics that were shown last month to buyers during a trade show in New York City. Although it is only in the beginning phase, Christian hopes this could be a sign of what’s to come — a branded fiber and branded fabric, with quality that spinners and retailers can both count on.

“We wanted to get these samples into the hands of people that actually buy fabrics for retail brands. We wanted them to actually see and feel the different constructs of genuine FiberMax fabric,” Christian said. “We think they will see quality. Of course, this isn’t competing with the super luxurious Pima fabrics, but we have gone into what we think is the larger part of the market and tried to raise the bar on standard quality. If you move quality up just a little bit, that is where the demand is.”

Captions:

The Retail Sourcing Panel discussed the influence of fiber quality from the raw material to the finished product.

Gary Ross

Monty Christian

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