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Beyond the Bale : June 2016
4 OFF FARM “S hifts in global demographics over the next ten years will really work in favour of the wool industry.” So says Dr Clint Laurent who gave a presentation on the evolving global consumer landscape to the International Wool Textiles Organisation (IWTO) Congress held in Sydney in April. Dr Laurent is the Managing Director of leading demographics forecasting company, Global Demographics Ltd, and an authority on interpreting the impact of global demographic change. Dr Laurent said changes in demographics – such as age, income and location – can be used by the wool industry to identify its most lucrative markets, now and in the future. “Consumer spending on products is the lifeblood of an industry; this is true for the wool industry as for any other industry,” Dr Laurent said. “Wool is a very small niche of the textile market – it has only 1.4% of the global textile fibre market, with apparel wool accounting for 0.6% of all textile fibre supply. But wool is in the beautiful position of being a fibre with positive characteristics that better educated consumers throughout the world increasingly appreciate. “So wool is a fibre choice made for consumers in the premium apparel market, in other words those people who are able to routinely pay a premium price for their clothes – which is good news for woolgrowers that produce the fibre. “There are some big changes under way in the demographics of the global premium segment that will work nicely for wool over the next decade.” PREMIUM MARKET WILL GROW Dr Laurent said wool’s target market of premium consumers who are predisposed to paying a higher price on a better quality product such as wool, translates to people who spend about US$2,000 per annum on clothing. Such expenditure is associated with a household income of more than US$125,000 per annum, with the exception of China where the threshold is US$100,000 per annum. “There are estimated to be 301 million people in the world living in households with that income level, and their estimated spend on clothing in 2015 was US$625 billion. This means 9% of the global population accounts for 27% of spending in the total clothing market. “So the wool industry can target a relatively small niche market that accounts for a very significant proportion of the total value of the market.” Over the next 10 years, the value of the premium segment is predicted to grow by 44%. Furthermore, Dr Laurent said the market for premium clothing products is projected to continue to grow – even with quite conservative GDP growth scenarios. “Over the next 10 years, the number of people in the premium segment is predicted to grow by an impressive 32%, and the value of the segment will have an even more striking 44% increase. This is a movement to quality rather than quantity. The premium sector’s share of the total clothing market will grow from 27% in 2015 to 29% in 2025. “So the wool industry is standing in front of a ‘wall of money’ in many respects; the problem is how to get consumers to spend that money on wool. The good news is that it might not be as hard as you think because of the location of premium consumers.” PREMIUM MARKET IS ACCESSIBLE Dr Laurent said the world’s affluent market is very localised. According to leading demographics forecaster Dr Clint Laurent, global shifts in the premium sector of the clothing market during the next decade will have a positive influence on the market for wool apparel. GLOBAL DEMOGRAPHICS WILL BENEFIT WOOL KEY POINTS • The market for premium clothing products is projected to continue to grow – even with quite conservative GDP growth scenarios. • 73% of the premium market is located in 10 countries – with North America, the UK, Japan and Germany accounting for 50%. These markets are expected to grow by 33% over the coming 10 years. • China is a relatively small market at present (less than 1% of the total premium spend) but offers significant growth potential at 20% per annum. In 10 years’ time it is projected to be 6% of the premium market. • The consumer base is changing with the growth of the ‘working age empty nester’ segment, who are maintaining income (by working later in life), have fewer dependents, and hence higher than average disposable income. They are more than half of the premium market – and increasing – and spend above average on clothing. Leading demographics forecaster Dr Clint Laurent presenting to the IWTO Congress in Sydney.
In the Shops - September 2016