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.

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

Leave a Reply

Market Analysis Stories
Market Analysis

Time for Growers to Start Pricing Their 2017 Crop

February 17, 2017

Dr. O.A. Cleveland believes growers should price at least 50% of their anticipated 2017 crop now with the December ICE contract above 74 cents.

Market Analysis

NCC: U.S. Cotton Industry Hinges on World Demand, China, Global Supply

February 11, 2017

According to NCC economists, several key questions will shape the 2017 economic outlook for the U.S. cotton industry.

Market Analysis

78 Cent Cotton? The Opportunities are There.

February 6, 2017

Titanic bullishness has captured the cotton market, providing opportunities for nearby cotton futures prices to top 78 cents.

Market Analysis

Strengthening Prices, Strong Demand and Bon Jovi Jeans

January 30, 2017

The narrow three cent trading range – 72.50 to 75.50 cents – remains in play, but pressure is building for cotton prices to move higher. Maybe Jon Bon Jovi’s new line of denim jeans will help.

Market Analysis

Market Remains Strong as The Limited Bows Out

January 20, 2017

The market consolidated gains of the past few weeks, just as The Limited – a primary supplier of cotton to women – closes its doors.

don shurley
Market Analysis

Shurley on Cotton: Opportunities in Improved Market

January 16, 2017

March futures have improved, and January is looking like a good month. The big question and the uncertainty is whether or not this will last.

Market Analysis

Market Holds in Face of USDA Report Adjustments

January 16, 2017

From now likely into the mid-March trading period, the very bullish call sales ratio will continue to carry the ball for the bulls.

Around The Gin
Product News

Six Greenleaf Nozzles Approved for Use with XtendiMax

February 24, 2017

Six TurboDrop D Series nozzles from Greenleaf Technologies have been approved for use with Monsanto’s XtendiMax herbicide with VaporGrip Technology.

Product News

EPA Approves DuPont’s FeXapan Dicamba Herbicide

February 17, 2017

DuPont has received EPA registration for FeXapan herbicide plus VaporGrip Technology, a low-volatility dicamba formulation for use on cotton and soybean varieties carrying traits that provide tolerance to dicamba and glyphosate herbicides.

Product News

Fourteen Southern States Register Enlist Duo for Use on Enlist Crops

February 14, 2017

Thirteen Southern states have granted state registration of Enlist Duo herbicide for use on Enlist cotton and other crops, following federal registration received in January.

Product News

BASF Application Academy Adds Online Training Module

February 2, 2017

BASF has added an online training module to its On Target Application Academy stewardship program to help increase education of new and advanced herbicide technologies.

Product News

Bayer Offers Shared Risk Program for FiberMax, Stoneville Growers

January 26, 2017

Bayer is helping support the economic sustainability of cotton growers through the company’s 2017 Shared Risk Program for those who plant FiberMax and Stoneville cotton seed.

Product News

Enlist Duo Herbicide Registered for Use on Enlist Cotton

January 13, 2017

The U.S. EPA has registered Enlist Duo herbicide for use on Enlist cotton varieties, beginning in 2017.

Product News

Data Show Yield Gains from Indigo Cotton in 2016

January 9, 2017

Data collected from 2016 trials show that Indigo Cotton – a seed treatment based on naturally occurring, in-plant microbes to help increase water use efficiency – led to yield improvements on testing acres, including an 11% average yield increase in West Texas.

Product News

FiberMax and Stoneville Release New Varieties for 2017

January 9, 2017

Cotton growers searching to match the right variety the right field now have two new FiberMax varieties and two new Stoneville varieties to consider for 2017.

Latest News
Market Analysis

Time for Growers to Start Pricing Their 2017 Crop

February 17, 2017

Dr. O.A. Cleveland believes growers should price at least 50% of their anticipated 2017 crop now with the December ICE contract above 74 cents.

Market Analysis

Shurley on Cotton: A Lot Going on and a Lot to Digest

February 13, 2017

The 2017 cotton market appears to be on increasingly stable and improved economic footing compared to 2016.

Market Analysis

NCC: U.S. Cotton Industry Hinges on World Demand, China, Global Supply

February 11, 2017

According to NCC economists, several key questions will shape the 2017 economic outlook for the U.S. cotton industry.

Market Analysis

Market Fueled by Demand, Mills and Shrinking Carryover

February 10, 2017

Cotton futures continue to hold tight to the 75-76 cent level, thanks to ever-increasing demand, mill indecision and shrinking world carryover.

Market Analysis

78 Cent Cotton? The Opportunities are There.

February 6, 2017

Titanic bullishness has captured the cotton market, providing opportunities for nearby cotton futures prices to top 78 cents.

Market Analysis

Strengthening Prices, Strong Demand and Bon Jovi Jeans

January 30, 2017

The narrow three cent trading range – 72.50 to 75.50 cents – remains in play, but pressure is building for cotton prices to move higher. Maybe Jon Bon Jovi’s new line of denim jeans will help.

Market Analysis

Market Remains Strong as The Limited Bows Out

January 20, 2017

The market consolidated gains of the past few weeks, just as The Limited – a primary supplier of cotton to women – closes its doors.

Market Analysis

Shurley on Cotton: Opportunities in Improved Market

January 16, 2017

March futures have improved, and January is looking like a good month. The big question and the uncertainty is whether or not this will last.

Market Analysis

Market Holds in Face of USDA Report Adjustments

January 16, 2017

From now likely into the mid-March trading period, the very bullish call sales ratio will continue to carry the ball for the bulls.

Market Analysis

Bull Market Pushes Prices to Five Month High

January 9, 2017

Prices reached a five-month high, as cotton demand flexed its muscles and pushed the market up.

Market Analysis

Could the Market Drift into the Mid-70s? It’s Possible.

December 28, 2016

The 70-73 cent price range remains very firm, with a good chance that the market could drift into the mid-70s.

Market Analysis

Export Sales Drive Market as Potential for Explosive Growth Builds

December 19, 2016

U.S. export sales continue to lead trading. But conditions are growing for a potential “explosive fire” under the market.

Market Analysis

Shurley: December Numbers May Contain Hidden Stocking Stuffers

December 12, 2016

USDA’s December production and supply/demand estimates were as expected in some respects. But it also contained a few unexpected and positive surprises.

Market Analysis

Is Market Opening Window for “Made in U.S.” Revival?

December 12, 2016

USDA’s seemingly bearish December supply demand report failed to break cotton’s upside momentum, presenting a small window to potentially revive the “Made in U.S.” theme.

Market Analysis

Prices Hold as U.S. Quality Cotton Moves to Market

December 2, 2016

U.S. crop quality is essentially the highest on record. While mills may be facing potentially higher prices, they are getting a bargain on their U.S. purchases.