Ibex looks to Uruguay to meet increasing demands for merino wool

As Ibex experiences strong growth in sales, the company has had to look to countries other than New Zealand to fill the demand for high-quality, ethically-produced merino wool. SNEWS sat down with Ibex CEO John Fernsell to provide you with an inside look at Ibex's decision to start sourcing from Uruguay.

As the production of merino wool has expanded globally, and demand for products made with merino wool has increased exponentially, companies such as Ibex are finding they need to look outside of New Zealand and Australia to source wool. This is why beginning in fall 2012, merino sourced from Uruguayan sheep farms will be used in Ibex’s product line.

“Only a small percentage of merino used in our products will come from Uruguay initially,” John Fernsell, CEO of Ibex Outdoor Clothing told SNEWS®. “Most of our wool will still come from our New Zealand farms, but as we start to tap out sources for merino wool at certain micron levels in New Zealand, we do expect to see more of our wool being sourced in South America.”

Ibex is partnered with Zque, a program developed by The New Zealand Merino Co. that provides an accredited program ensuring full transparency in farming. This ensures the merino Ibex uses meets the highest standards of environmental, social and economic sustainability, animal welfare (non-mulesed) and traceability back to the source. The end result is a merino product that is of the highest quality and integrity Fernsell told us.

The expansion into South America for sourcing product and expanding the merino wool supply chain is being done under the watchful eye of Zque. Fernsell travelled with executives from Zque to both Argentina and Uruguay recently, and the outcome of that trip resulted in the first partnership contract the company has signed outside of New Zealand.

“Uruguay produces very good, high quality wool, and the farms are huge,” said Fernsell (photo below: Fernsell is standing to right of Keith Anderson, vice president of marketing for Ibex). “I thought New Zealand merino farms were big, but these are gigantic. Despite their size, breeding and flock management is prime in the farms we visited and the resulting merino is good strong wool.”

Fernsell is quick to point out that producing merino is not unlike producing wine – both the quality of wine grapes and quality of merino wool are a product of the climate.

“Some years are vintage ones, others, not so much,” Fernsell told us. “Having a good strong farm partner, one that really understands the nuances of animal care, weather variables, consistency of food, and more makes a huge difference. Good farms, ones that care properly for their animals and manage the flock very well, result in the best quality merino fibers.”

We asked Fernsell why Ibex, which already cuts and sews over 85 percent of its product line in the U.S., doesn’t begin seeking to source merino domestically rather than looking to other countries as additional sources of merino supply?

“There are domestic merino wool farms and we have talked to people and it is still on the radar for us to do eventually,” Fernsell told us, “But to produce merino, you not only have to grow it and shear it, you have to wash and comb it and super wash it and spin it.”

“A growing domestic supply chain does exist in the U.S. for merino, and the military has been driving that growth, but it is not cheap. We have bought some and currently it is priced about 20 percent higher than you can get anywhere else on the globe.”

For Fernsell, cutting and sewing domestically, rather than chasing price and production at factories around the world like others in the business is as important as sourcing the best merino – no matter what country it might come from.

“We won’t chase cheaper production as you end up with a product that is not anywhere near as good,” said Fernsell. “Wool is not easy to sew and not easy to work with. Once you have trained a factory to produce wool garments well, you stick with them. We have factories in the Bay Area and we now account for more than half their business. In fact, we just opened an office in East Oakland to help manage our production and a small warehouse for our raw materials. In cut and sew it is not like package deals. We buy the zippers and pocketing rather than the factory doing that. It’s another step, but you then know what you’re getting.”

Whether it is the global economy influencing business decisions, or competitors seeking higher quality production, one thing is for certain to Fernsell – he’s seeing an awful lot of companies making the shift from overseas production back to the United States of late.

“We have such a good foothold in the best factories since we never left this country to make our product to begin with,” said Fernsell. “And that has been great for us.

–Michael Hodgson