Tuesday, October 6, 2015
Membership Supports Key Sustainable Cotton Program
Olah Inc. is pleased to announce its membership in the Better Cotton Initiative (BCI). With its membership, Olah Inc. will be a step closer to attaining its goal of encouraging the use of sustainably produced cotton throughout the global textile supply chain.
Olah Inc. will promote its membership at its upcoming Kingpins trade shows in Amsterdam on October 28-29 and in New York on November 3-4.
The Better Cotton Initiative is a not-for-profit organization stewarding the global standards for Better Cotton, and bringing together cotton’s complex supply chain, from the farmers to the retailers. Hundreds of top textile and retail companies around the world comprise the membership of the Better Cotton Initiative.
In making the announcement, Olah Inc. CEO, Andrew Olah, said, “With our membership in the Better Cotton Initiative, we feel we will be properly positioned to assist in the global adoption of sustainable cotton practices.”
Olah went on to say, “It is our goal to not only provide sales and marketing opportunities for our customers through the Kingpins shows, but also to help the industry understand the need to only use sustainable cotton. By joining the Better Cotton Initiative, we have the opportunity to share our industry knowledge and expertise with various supporters of sustainably produced cotton around the world.”
Scott Exo, BCI’s USA Country Manager, added, “We are thrilled to have such a prominent, influential member of the cotton industry join BCI, and help us promote Better Cotton in the US and globally.”
Olah Inc. founded the Kingpins Show in 2004, but began operations in 1959 as a textile marketing, development and sales agency and has grown to be a fully integrated cotton and textile solutions company. Visit www.olahinc.com to learn more.
The Better Cotton Initiative exists to make global cotton production better for the people who produce it, better for the environment it grows in and better for the sector’s future, by developing Better Cotton as a sustainable mainstream commodity. Learn more at www.bettercotton.org.
About Olah Inc.
Olah Inc. is a New York–based global textile and apparel development and marketing firm and producer of the Kingpins Show. The 56-year-old company supplies U.S. companies with denim, corduroy and piece-dyed fabrics.
The Better Cotton Initiative operates as a not-for-profit organization, existing to make global cotton production better for the people who produce it, better for the environment it grows in and better for the sector’s future. BCI aims to transform cotton production worldwide by developing Better Cotton as a sustainable mainstream commodity. To achieve this mission, BCI works with a diverse range of stakeholders across the cotton supply chain to promote measurable and continuing improvements for the environment, farming communities and the economies of cotton producing areas. To find out more, visit www.bettercotton.org.
Wednesday, September 16, 2015
Often big ideas are hailed as history-making; that is until high-flying aspirations collide with the realities of a ceiling.
Take China, for instance. The very fabric of the country is made up of one big idea: managed growth. For a nation bedeviled by a complicated history and complex economics, the government has espoused a simple theory of social cohesion. There’s an implicit bargain between the Chinese government and the common person: stay out of politics and we’ll make you rich. Or put another way, it’s good to aspire to be rich, and that economic growth is essential to China’s future.
For hundreds of years, the Chinese people have only known poverty, autocracy, and social unrest, while suffering from surly treatment by the West. China, however, now has its day in the sun. Its economic achievements are truly something to behold; advancement on a historic scale, much to the chagrin of Americans and Europeans alike.
China aspires to be a leading world power. It has succeeded. But along with its success, China has now experienced the unpredictable downside of success. Indeed, the government has prided itself on its ability to manage its politics and economy, but now the realities of economics have challenged the status quo. Growth may be good, but it has shortcomings.
Nevertheless, the growth of China would not have been possible were it not for the legions of Western buyers. Moreover, were it not for the Western demand for Chinese goods, the China miracle would not have been possible. In turn, the industriousness and creativity of Chinese workers and business leaders make this a two-way arrangement.
Life, however, sometimes injects an unexpected element. We witnessed this most recently with China’s financial crisis. What began as a modest currency devaluation of the renminbi turned into a run on China’s stock market. Growth comes with costs, and the bills came due — all at once. Of course, these problems didn’t just happen overnight. Problems had been creeping into the system for some time now.
For textile and garment companies, the message is simple: China is still a good place to do business, but a sensible hedge is to diversify into other Asian countries. Many have already done so. Many more will. The currency devaluation makes exports from China cheaper. For Western buyers, at least for the short run, this will translate into higher margins. But what about in the long run? Many brands are eager to tap China’s consumer market, but depreciation means foreign products are only going to become more expensive for increasingly skittish Chinese consumers.
China faces a myriad of problems as a rising standard of living propagates new challenges. China has built a new silk road, but it suffers from potholes. Economic growth always comes with costs. Societies change. China is no exception. For businesspeople, though, this means that what had previously worked has evolved into something different.
Will textiles and apparel always be produced in China? Of course. But the industry will lose its luster over time. China’s government is consciously shoving the country towards a consumer-based society. In many ways, it has outgrown its manufacturing roots. The export model has worked very well for China, only that now the limits of that model have come home to roost in a weakened financial sector and a shaky stock market.
The road to hell is paved with good intentions, so goes the aphorism. For our industry’s sake, let’s hope that China’s road to consumerism can be made less bumpy.
Thursday, August 13, 2015
I had the pleasure recently of interviewing Patrick Laine, CEO of the Better Cotton Initiative, and Michael Kobori Vice President of Sustainability, Levi Strauss & Co., on the AgMarketNetwork, to learn more about the Better Cotton Initiative.
Please click HERE to listen to the full interview, along with a stimulating discussion about the cotton markets by an esteemed group of cotton analysts, which included O.A. Cleveland, professor emeritus, Mississippi State University, H.W. “Kip” Butts, senior cotton analyst, Informa Economics, Jarral Neeper, president, Calcot, Ltd., Dr John Robinson, Professor and Extension Specialist/Cotton Marketing, and Patrick McClatchy, executive director, Ag Market Network.
The Better Cotton Initiative (BCI) supports more sustainable ways to grow cotton. Since 2010 the organization has promoted measurable and continuing improvements for the environment, farming communities, and textile supply chains.
However, as BCI has gained acceptance by many brands and retailers around the world, some producers and merchandisers of cotton and other raw materials have struggled to understand the initiative and its sustainable program.
The interviews were a chance for cotton growers to learn about BCI and the interest brands and retailers have in sustainable production. Moreover, the program provided an opportunity for apparel sourcing executives throughout the industry to learn about cotton production. It was my hope to help bridge an educational gap between both ends of the cotton textile supply chain.
Monday, July 13, 2015
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 ten 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.
Robert P. Antoshak
Concerned Cotton Executive