Cotton's Muddled Message

Thursday, February 27, 2014

As you read this article – and assuming you're dressed – please check to see what your clothes are made of. Go ahead, check. I'll wait. As you look for the fiber content label, I'd bet that your clothes more likely than not contain synthetic fiber. It may be under a trade name or it made be generic; but according to market statistics, about two-thirds of all textiles and apparel contain synthetics. I base this not on some public relations release from a polyester company but on official statistics collected by the U.S. Department of Commerce. As the United States imports so much of the world’s production of textiles and apparel, import statistics are a useful surrogate for market trends. According to the Commerce Department’s Office of Textiles and Apparel, the United States imported about 57 billion square meter equivalents (SME) of textiles and apparel in 2013, up from about 54 billion SME in 2011. Since 2011, cotton’s share of the import market actually fell while the market share for synthetics grew by 3% to reach 65% of all U.S. textile and apparel imports.

There are a lot of reasons why cotton has lost market share. The spike in cotton prices in 2011 helped propel synthetics to levels of consumption not seen in years. Synthetics have been cheaper. Price has played a significant role; there’s no getting around that. Technical performance factors also affect fiber-sourcing decisions. But there’s another reason that has helped to swing the market towards greater use of synthetic fibers: confusion. It’s not that sourcing executives don’t know the difference between synthetics and cotton, but rather that it’s hard for sourcing executives to distinguish amongst all the difference cotton messages in the market.




Let’s see … we have:
Better Cotton (BCI)
Organic Cotton
FairTrade Cotton
Cotton Made in Africa (CMiA)
Cotton China
Cotton USA
Cotton Australia
Egyptian Cotton
The Sustainable Cotton Project
Supima
Cotton Leads
e3 Cotton
G.O.T.S.
Initiatives for Sustainable Cotton
Naturally Colored Cotton
Cotton Incorporated … and on and on!

Believe me, there are many more cotton promotion and marketing initiatives out there – each with a specific message representing a particular constituency in the cotton industry, tasked with expanding the reach of cotton in today’s market. In fact, each program individually works very well. However, like traders calling out offers at some cotton outcry pit, the individual voices fail to stand out, lost in a cacophony of noise that fails to entice would-be buyers with a clear message: buy cotton. When viewed from an industry perspective, it’s clear that many of these cotton programs not only compete against synthetics but directly with each other! No wonder there’s confusion in the marketplace.

In interest of full disclosure, please know that I am a supporter of cotton. Yes, I'm a marketer, but I'm also a businessperson concerned about the industry messaging for cotton. The adage "a rising tide raises all boats" has merit when it comes to the cotton business, only that the tide must have leaned towards one side of the pond, as the real beneficiaries have been the very fibers in competition with cotton. Prices may have helped synthetics to gain market share at the expense of cotton, but clever marketing has also helped. I don’t wish to complain of sour grapes but rather commend synthetic fiber companies for out-marketing their competition. Shrewd marketing, for example, has helped rayon to become an equal to cotton in a wide range of applications, including the key fabric of denim, traditionally a stronghold for cotton. In fact, the day I saw a rayon company as a key sponsor in a major cotton industry event last year was the day that I realized the cotton industry had failed to live up to its potential. Instead of promoting a simple product message, cotton is mired in the cotton-versus-cotton-organic-versus-sustainable-versus-geographic-versus-variety-versus-labor rights-versus-trade relations-versus-green-versus-synthetics brand of marketing. All I can say is “yikes!” I need a drink …

In short, cotton’s message is muddled, swayed by good intentions, but subject to withering comparison to synthetics and, at times, working at cross-purposes from within the cotton industry. As a result, for many consumers, cotton is not green; the fiber requires too much water, too many pesticides and too much labor to be grown. For other consumers, polyester is green; it can be recycled. The fact that the fiber is made of petrochemicals and treated with caustic chemicals is beside the point – green messaging in this case has resonated. To reiterate, I do not wish to sound critical or petty but rather I want to tip my hat to these marketers of synthetic fibers. They’re smart and have outperformed their counterparts in the cotton industry. Consequently, many consumers today see no problem wearing synthetics despite its origins, while fretting over how cotton is produced. Of course, with increased market share (hopefully) comes increased profits. Both fiber companies and cotton growers are in business to make a profit, a premium above and beyond their costs of production.

Even so, there are serious implications for the cotton industry. For cotton growers in particular, profitability is more important than ever. Regardless of the geographic location of a farmer, being able to provide for his or her family and operate a business at a profit is harder than ever. Indeed, with all of the challenges facing today’s cotton growers, none is more pressing than figuring out a way to receive a premium price for cotton produced. By this, I mean a real premium value, not some inflation-spiked price. To better understand the importance of building true value for today’s grower, I’d like to suggest that all current industry initiatives to market conventional cotton to the global textile industry are missing the point: it’s not so much a question of if cotton is a better product or not, but rather how the benefits of cotton are relayed to the consumer. I’d like to explain further. Let’s take a look at two highly successful marketing programs to market fiber – one program from the past and another from today: polyester and organic cotton. 

Remember the days of double-knit polyester leisure suits? “Space age” fibers met with knitting efficiency to produce the quintessential fashion statement from the 1970’s.  The space age was ushered in by none other than lowly polyester: a test tube based, oil-derived product that was successfully sold throughout the world even though the product’s main attribute – wrinkle resistance – failed to overcome the product’s shortcomings – namely a lack of breathability. Today, however, the marketing machine continues with more and more sophisticated versions of the same fiber, often blended with cotton to help shore up polyester’s cache as well as comfort. Lack of breathability is now equated with warmth and moisture wicking. Disparaging remarks aside, success is measured in the market. As I mentioned earlier, more synthetic fiber is used today in textiles and clothing than cotton, a perplexing fact that frustrates everyone in the cotton business. And to add insult to injury, the largest consumer of polyester in the world today is actually one of the “greenest,” environmentally advanced regions of the world – Europe. Go figure.

Speaking of green, let’s look at organic cotton. Take a small, relatively insignificant percentage of the global cotton crop and make it appear so big that retailers and clothing companies clamor for it – even though less than one percent of all cotton grown globally will never be enough legitimate supply to support demand! Nevertheless, today consumers want organic cotton, so retailers are prepared to pay more for it. Why? Clever marketing, for one thing, and consumer perceptions of what is good for the environment, for another, helps to shape attitudes. Marketers of organic cotton have seized the opportunity (with near religious zeal) to give consumers what they want: a product that satisfies consumer desires to preserve the environment. In turn, there are vociferous debates in the cotton industry over whether organic cotton consumes fewer resources than GMO cotton. Regardless of the debate within the cotton industry, many retailers are compelled to react to consumer demand and sell “organic” clothes. After all, it’s smart business. But with ill-described and conflicting definitions of what does or does not constitute organic cotton, who is to say what qualifies? Some say there are established standards while others suggest that standards are still a work in progress. In any event, there’s only a limited amount of cotton that could ever be qualified as truly organically produced. However, in the end the success or failure of organic is reflected in the choice of consumers. It’s also reflected in the bottom line of retailers around the world as the organic movement has translated into green of a financial sort.

Come to think of it, I say forget traditional cotton. As we’ve seen with our two examples and when we think about the best ways in which fiber can be marketed down stream, I recommend a new product for the cotton industry to consider. How about organic polyester? Talk about an oxymoron, but the marketing message is right. Let’s merge the best of organic marketing with the benefits of space-age polyester. According to some advocates of synthetic fibers, polyester is actually a greener product than conventional cotton as it can be recycled. Talk about marketing spin! My whole point is that to truly market your product to any customer base, perceived value is at least as important as actual performance of the product. Organic polyester – that’s ridiculous. But the message isn’t. And it’s in this message that the cotton industry has the most to learn from: it’s simple and direct, while playing off consumer desires for greener products.

The world has changed. As we’ve discussed, creative marketing helps to sell products, but it’s not enough anymore to simply make a good product and expect the market to buy those products at a premium, if at all, just because the product is good. With the changing world, in order for cotton growers to gain extra value for their products, that value has to be derived from down stream, from textile mills, clothing companies and retailers. But in order to extract that value, growers and cotton merchandisers need to construct a coherent story, one that moves consumers to buy those products. And, in turn, influence the buying patterns of retailers. To be blunt, retailers can be slow to listen to new ideas unless those ideas come from consumers, such as organic cotton.

I recently gave a presentation where I held up two t-shirts made by the same manufacturer and sold by a major U.S. department store chain. One shirt was made with conventional cotton shirt and retailed for $20, while the other shirt was made of “100% organic cotton” and sold for $25. Both shirts were made in the same country and were identical except for the packaging. So what made up the difference? You decide.


I wonder what would have happened if I had shown two identical shirts made of polyester? I bet someone would have asked for rayon …

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