Dear Cotton Industry,
So you're a cotton farmer – what's most important to you? Sure, you want to make money and, sure, you want to provide for your family – you understand that. But what are you doing to understand your customers? You may say it doesn't matter, I can always ship into the loan, my coop will handle it, my local pool worries about customers.
Do you care about the market? What makes up your market? Your merchant or coop help to make up your market, certainly. But what about their customers, the textile mills? What affects their market and how does that market matter to you? You may say, I'm a farmer, not a textile mill. But a textile mill will say, he is your customer: You will pay attention or he'll buy from someone else. There's a lot of cotton out there. Why? Because the mills have to pay attention to their customers.
In the long run, those who best understand the needs of their customers will be the most successful. The loan program won't be around forever. If you think it will, you're kidding yourself. Also, if you think there'll always be plenty of merchants around vying for your business you're kidding yourself. You can never take your business for granted. Complacency breeds contempt. Put more succinctly, ignore your customer and your business will go elsewhere.
The textile industry has undergone enormous change in the past 10 years. Global trade in textiles was once regulated by high tariffs and a complex system of import quotes. Not anymore. Textiles used to be produced predominantly in the U.S., Europe and Japan. Not anymore. Textile mills used to dictate fashion, everything from fabric construction to fiber content. Not anymore.
Choice is a key word in textiles today. So is variety. The ultimate customer, today's consumer, demands choice and variety. Whereas in the old days textile mills could tell the consumer what to wear that power has gradually transferred to the consumer. It's what the consumer wants to buy that matters most – not what the mills want to produce.
The same holds true for cotton. Today's consumer is looking for something new, something different. Growing any old cotton to meet the loan is not what today's consumer is looking for. Variety, a choice of fibers, that's what today's consumer is looking for. Quality is critical, but so is uniqueness.
The organic movement is an example of uniqueness. Retailers like to show they're "green", that they use organic cotton in their clothing in order to distinguish their products from someone else's. Consumers love it, whether they live in the U.S. or Europe.
Today's mill is looking for something new, something to distinguish its products from someone else's. Commodity production is a dead end, the beginning of a self-fulfilling spiral of cost cutting and lowering of quality standards. There will always be a market for junk, but increasingly today's consumer wants something more.
Mills, in turn, are impelled to respond – they adapt. They either go down market and try to survive at the bottom of the supply chain or they move up market stressing quality and value. Increasingly mills are opting for the latter option by focusing on a wider variety of products, improving quality and providing better value.
Yet these changes are not without problems. Despite all the progress the cotton industry has made in marketing its products, the industry still has to compete with the synthetic fiber companies – which are terrific marketers as well. However, fiber companies are not limited by an industry-wide approach to selling its products. Virtually all fiber companies stress sales of branded products. This is an advantage as they can focus on attributes of their products to stand out from the competition.
It's harder with cotton. Other than some sustainable production initiatives, the cotton industry has chosen to market its products in a broad sense, but by doing so, this has only reinforced cotton's image as a commodity product. Cotton is just cotton – a sentiment heard up and down the entire textile supply chain. What distinguishes cotton from synthetics? Devising an answer to that question remains the challenge for cotton.
Ironically, both sides of the fiber business – cotton and synthetics – are moving closer in that each side continues to borrow characteristics from the other. Synthetics look to replace petrochemicals with natural alternatives, while cotton looks to incorporate new technologies to help to produce a more versatile product.
On the synthetic side of the equation, work has been conducted to replace petrochemical inputs with natural alternatives. Examples include corn, soy and milk derivatives. Also, efforts have been made to change the age-old production of rayon to include new sources of cellulose from alternative forms of wood pulp. Most famously bamboo was marketed as some new product, but which was found to be nothing more than reworked rayon. The point is that the synthetic fiber companies have been and will continue to be aggressive in their research and use of alternative materials.
What about cotton? Seed companies have definitely upped their game in terms of quality and improving the characteristics of some varieties of cotton to be more attractive to spinners and textile mills around the world – cotton that's stronger with a longer staple and greater uniformity. Mills around the world demand quality in their cotton as better cotton translates into better textiles, but better cotton also translates into lower production costs saving mills time and real money.
For the cotton industry to prosper over the long run, development of new technologies will be essential. The market demands it and the cotton industry can deliver over time. Additionally, the cotton industry must focus on evermore-focused marketing and educational campaigns. The best technology in the world can wither on the vine without strong marketing. Remember Betamax tapes?
I humbly suggest that the cotton industry needs to embrace new business models and not be fearful of changing its way of doing business just because that's the way thing have been conducted for years. Downstream customers are demanding more of cotton growers and fiber companies. Synthetic fiber companies are actively working to meet the challenge of the ever-changing marketplace. It is imperative for cotton to meet the challenge as well. Remember wool? Today, wool is a relatively small percentage of the global consumption of all fibers. There was a time when that was not the case. Times changed, but the wool industry failed to adapt. Let's not let that happen to cotton.
Finally, I recognize that fashion plays a central role in the use of fibers. For the moment, synthetics have gained market share; in the future, that may be different as cotton comes back into fashion vogue.
Indeed now is the time for the cotton industry to adapt its approach to the needs of its customer base. Cotton may not be as fashionable as it once was, but prices are way down. Simple economics does play a role: if cotton prices remain low, demand will return. But as demand returns, I respectfully recommend that a new marketing message be adopted to propel cotton back into the minds of mills, brands, and consumers around the world. Prices won't remain low forever, but customers need to be reminded of the benefits of cotton and the limitations of alternatives.
Sincerely,
Robert P. Antoshak
