Capturing the Supply Chain with Ingredient Branding
March 23, 2011 To many, cotton is simply a commodity, but to those mindful that the fashion and textile businesses are the drivers of cotton’s market share, it is fertile ground for brand marketing. Doing it successfully involves a number of factors, but among the most important is providing the entire supply chain with marketing and technical assistance to ensure quality, continuity, promotion, and sustainable growth.
Four decades ago, Cotton Incorporated pioneered the creation of cotton as a national brand, and then into a truly global brand through its partnership with Cotton Council International. Cotton cooperatives have had (and still do) identity and heritage preservation programs as well as geographically based programs.
Meanwhile, the International Forum for Cotton Promotion (IFCP) continues to supply a forum where people from the different ends of the vast cotton supply chain meet to discuss ways to improve cotton’s market share.
Now is the time to lay the groundwork. Ingredient branding can be used to stem cotton’s declining market share. Taken in a fuller context, component or ingredient marketing to the final user can also be a preemptive strategy to help prevent direct buyers from replacing a brand or making it redundant.
A Powerful Combination
In February, Bayer CropScience licensed the FiberMax and Stoneville brands to Olah Inc., a New York-based textile and apparel company. Under the 10-year agreement Olah, headed by Andrew Olah, has exclusive rights to develop and market the brands through apparel and home product lines.
The program has the successful results of a mature FiberMax certification program that has proven to be successful as well as the financial strength of Bayer, so, it is fair to assume that the project will be based on a solid business model that has shown to be profitable. When you add market prowess to that model, you have a winning combination. Olah represents textile producers around the world and sells to manufacturers and retailers in consuming markets. The company understands the product and they understand the business.
Andrew Olah, owner and president of the 52-year-old company, works with moderate to high-end jeans brands and supplies many of them with fabric for a variety of products. He is currently redefining the stale world of industry trade shows with his global “Kingpins Show” that recently ran in New York and Los Angeles (beginning in 2011 it will also run in Shanghai, Hong-Kong, and New Delhi). In addition, he is a member of the Fashion Institute of Technology’s Textile Development and Marketing Department’s Advisory Board.
JS: What was behind the decision to go literally from seed to consumer?
AO: We’ve been working with FiberMax for a few years now and we think we can make a real case to the consumer and brands that while the consistency of hand, softness and texture of the ingredient fiber has value, the most vital assets of FiberMax are: 1) We can offer transparency to the consumer, and 2) we can start informing consumers that the garment has cotton that was ‘Grown in the USA.’ We looked at how Intel managed to make their chip the most important one: by convincing purchasers that every time they buy a computer, it will perform exactly the same way the previous one did.
JS: How do you see this as a benefit to the grower?
AO: FiberMax has carved out a large portion of the cottonseed market because of its high quality and increased productivity. We are engaging farmers by letting them know how the business works further downstream. If they see that the cotton they are growing is being branded properly and making it to the shelves in good products, they will see that Bayer is adding value to their work. Our mission is to bring the entire supply chain, from farmers to consumers, to life.
JS: How do you expect retailers to respond?
AO: Retailers need to have good products that provide them with sustainable margins. The idea of promoting transparency and “Grown in the USA” – along with good apparel – is receiving genuine interest. Our essential belief is that our marketing, along with compelling apparel, will give retailers an excellent value. •
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