Saturday, November 20, 2010

Synopsis of the Build A Tent AOBA Meeting - 11/19/2010

To view the original  Agenda click here. 
For background info - other info and copies of the presentation - click here

The meeting took place in Nashville, TN and online through web broadcast software.  The buzz even generated a new story on the local news for a local TN farm. Of course the prices quoted in there should be tongue in cheek (Fiber $6 an ounce), but it was a nice article!    There was also a streaming video stream which was available to folks who did not pre-register.  I chose to join online (gotta love technology) as part of the web conference software.   As part of the AOBA Fiber Committee,  I not only was there for Alma Park Alpacas, but also for the future of the entire Alpaca Industry.  In order for the industry to really grow and become a true fiber producing industry, we need to come together as a large group of breeders.   I will always have a portion of my fleece clip be just for Alma Park Exclusive products and Genuine Aymara ™ products, but it would be wonderful to sell off a large portion of my 1000+ pound clip to a fiber buyer or textile manufacturer!!  OK - now back to the synopsis!

Let me say first that the AOBA staff did an excellent job in the technology portion of the meeting!  They also did a great job pulling the meeting all together.

A couple of tips for future meetings: 
  • We should have a full time moderator for the webinar participants as many of us felt left out from questions and opinions as no one was really "moderating" our chat.   
  • Friday or a day during the week is not the best timing for a meeting like this - there were about 100 participants both online and in person.  With approx 4000 AOBA members and approx 6000 farms across the country, this was not a well attended event.   Most alpaca breeders still have day jobs and many cited this as a reason that they could not attend.  I was dismayed that out of over 100 alpaca farms in the US - there were only 2 perhaps 3 of us in the meeting.   I would hate to think that low attendance overall was due to the fact that people are not interested in fiber and will rather chalk it up to a Friday meeting.  
  • Many folks stated on Facebook that they did not know of the meeting.   I am not sure if the email blast did not get to enough people, people did open it or some other reason.  AOBA has a page on Facebook as well - there are TONS of alpaca folks on Facebook - definitely should have been posted there.  Many folks stated that my Facebook post was the only way they knew about it.  
This synopsis will have both notes from the meeting as well as my opinion on some topics.  My opinions will be in italics and I welcome you to comment on them as well as the actual meeting notes.  AOBA will be putting out a DVD of the meeting and I encourage you all to get a copy! 

The meeting opened up addressing perhaps why the alpaca  industry has not been in the "fiber market". 
  • Industry has historically been focused on promoting breeding stock not fiber
  • Small scale producers of fiber
  • Social problem in the US - rural communities is our target market thus far - but that is NOT where the money resides.  Also the economy show the US is NOT getting richer! 
What does this mean to producers?  While there will always be a niche market for fiber producers, we need to make a move into commercial production in order for our Luxurious Alpaca Fiber to penetrate the market. I have to find the citation, but I think alpaca fiber has only a 5% market penetration.  We need to step out of a breeding market and bifurcate.  Commercial flocks (fiber producers) and Seed Stock (show string).  Producers can have both types of animals on their farms, but we NEED to make the distinction.  We also need to gear our show system and national marketing efforts to identify and make the distinction.  Currently (for huacayas) only merino like (crimpy) fleeces are winning the ribbons, but many of us impassioned fiber people know our "silkies" (smooth cool to the touch non crimpy fiber) make wonderful products and yarn!  The Suri Network has identified several types of fleece structures and most mills will tell you that straight locks are easier to process.  The tight ringlets require more processing and often take more time and "rip" on machines.  We need to start breeding for what fiber BUYERS want, not what we THINK they want or what is aesthetically pleasing to producers.  Also education to the alpaca breeder masses needs to happen to have them all be on the same page as to grade.  Those of us that make lots of products know that grade 3 is the most widely adaptable, usable and easy to work with without compromising feel. 

We have all enjoyed a high priced breeding market to this point, but the fact is that if these animals are for fiber production, prices are too high.  Merino sheep and even cashmere goats are $100s not $1000s of dollars to purchase and enjoy a rich long time history of commercial production!

I also believe since the majority of growers still have a "day job", many have not had enough "skin in the game" for the profits of fiber to make a difference.  The economy may have brought this to a premature inevitability.  

Strategic objectives:
  •     To create and promote business model for sustainable alpaca industry
  •     Alpacas of all types and quality
  •     Promotes domestic fiber off the animal’s back to fashion
  •     IMPROVES the economic potential for alpaca farmers
I have said it hundreds of times along with my fiber colleagues - FIBER must be the future.  We need to promote all types and quality of alpaca.  Different grades/lengths are for different uses.  Wool is heavily used in rug manufacturing, but it is NOT the 18-19 micron count merino.  What about all our coarse older animals?  There is a use for their fiber as well - we just have to let the manufacturers KNOW it and get a distribution and collection model together to get it done!  

If we can create a demand for our product, FIBER, then all growers will benefit and it will bring more people into the commercial side of the business in the rural communities who have the land and may want to move into alpacas from other forms of livestock or ag crops or do both! 

The topic of cooperation was discussed and that there were "competitors" in the meeting. 
  • Small producers
  • NAAFP
  • AFCNA
  • NEAFP
  • Mini Mills
  • Alpaca Blanket project 
and probably others I missed.

Rod Dakan (Royal Fiber Spinnery) stated: "... there are no competitors because no one in the room is doing the same thing and 100% of the fleece is not being processed”

I think this was a statement of genius and would have to agree that we are not competing and we are ALSO NOT collaborating or cooperating.

Industry development objective around fiber!!  It is "Fish or cut bait time" .

While I have been a fiber nut for about 6 of the 8 years I have been breeding alpacas, I believe there is renewed focus in our industry because of the economy and the fact that our "crop" could actually generate money is on many peoples minds and agendas. Many small producers and other organizations stated above have been making this a reality.  How about now we have an "umbrella" to bring us all together and pool efforts and knowledge to benefit one and all?  

Animal Statistics in the US only (From ARI):
  • 2006 - 86k registered animals
  • 2010 - 207k registered animals
I have been hearing for years that we do not have enough fiber in this country to do anything with.  Well I said that was BS in 2006 and it is DEFINITELY BS now!!  With 207k animals and possibly another 20k - 50k unregistered - that is a lot of fiber!

If we do the calculation of just the registered ones (and just assume just an average of 3 pounds of blanket - ignoring 2nds, 3rds and those big studs who shear 10 pounds etc), that is 621k pounds of fiber - OVER a half of a million pounds or 310 TONS of fiber!!  Can we do something with that ??  You bet!  This of course does not take into account ANY fiber stored in breeders basements etc (may not be good anymore depending on storage conditions) or unregistered animals.  

Other Statistics:    
  • Peru with 4 large processors uses 85% of the global alpaca fiber
  • Peru has over 100 year history of working with alpaca fiber and this passthrough is estimated at 4000 tons !
  • There are 165k ARI registered animals outside of the US currently
  • Italy KNOWS about processing fiber - think about Italian Cashmere
  • Australia - fiber research is amazing and growing fiber is part of their culture and government support
  • Estimated that there will be 2500 TONS of alpaca fiber in 2020 in the US based on a 15-18% growth in animal population.  
  • In 2003, first alpacas were imported into China, who has a huge rural community and will use the alpaca from cradle to grave as fiber, food and pelts.   Please see the website for alpacas in China (I know the top picture has to be llamas)
  • 2010 China National Cashmere and Wool Conference – Keynote speaker Karl Spilhaus (president of National Textile Assoc and Cashmere and Camel Hair Mfg institute) - Why was there not an alpaca representative at this meeting.  We NEED to be in the fiber/textile space!
  •  Currently the buyers of fiber in the US have a fragile system.  If they do not get enough fiber or the right kinds of fiber, they cannot make production.  ABP cannot make blankets, AFCNA cannot make socks, NAAFP or NEAFP cannot make product for their members to re-sell, Back to back can't make felt kits or quilt batting.  
  • Mini Mills are in an enviable position as they are getting a majority of fiber  - why don't we utilize them further and bring them into the production chain? 
  • Cashmere – small specialty fiber – how come we are not looking at their path to success? 
  • National Textile Assoc  - why aren’t we at that table? 
Production: Some things to think about since there is no current sustainable fiber collection and no private money to set it up.
  • Work with AFCNA and other sorting/collection orgs - pilot by region that would work to serve all of us?
  • Lack of adequate production support – cottage and commercial - LONG wait times in mini-mills that we would NEVER tolerate in a normal industry

Biggest Issues On our Road to Fiber: 
  • Value of fiber and how to do a value added strategy (don't have experience or culture like Italy or Australia)
  • Not an investment opp to date (been focusing on sale of animals not fiber)
  • Need Research and Development (this is on-going with AOBA fiber committee - see here for some info)
  • Need volume (have the fiber) and organization (collection and distribution centers)

What can we learn from others (Cotton): Nick Hahn - private consultant and former CEO of Cotton Inc was the keynote speaker and wow what parallels to our industry.  Read all about the struggle and success of Cotton Inc here. 

A brief summary (all cited from www.cottoninc.com):
  • Cotton was losing market share to synthetics.  "In 1960, cotton apparel and home fabrics accounted for about 78% of all textile products sold at retail.  By 1975, that share had plummeted to an all-time low of 34%, due to the successful incursion of synthetic fibers in the marketplace, threatening the extinction of cotton as a viable commercial commodity." (Source - www.cottoninc.com)
  • 1970 - Cotton Inc is incorporated
  • 1973 - The Seal of Cotton ® is introduced
  • 1983 – Market share reaches 39%. Recognition of the Seal is at 63%
  • 1987– Cotton regains dominant position in the textile industry. Market share reaches  49%.  Recognition of the seal -  71%. Mill consumption of U.S. cotton reaches levels not seen in 15 years. 
It was a long road.  It has been 40 years since Cotton Inc was first formed and branding and marketing is still necessary.   They created the demand for their product.  They already had the supply.  Nick Hahn states that alpaca could use a "little help" in branding and marketing and while it would be too much money to do an all out campaign like Cotton did - we should look to work and collaborate with people and groups already in the fiber industry.

Some Problems to solve:
  • First hurdle – measure production 
  • What about alpaca growers who did not want to  cooperate?
  • Since an all out advertising campaign like Cotton would be too expensive - let's explore social media like Facebook and Twitter and use the power of the Internet
  • Partner with people who are already there, fashion people


_________________________

Now comes the tough questions!!!! 

What do we do next?

  • There was a "fake" vote on whether or not we should create a new organization to focus on fiber and do what Cotton Inc did.  Call it "Alpaca Alliance".  I believe the majority voted yes.  
  • Other questions were - would you pay $250 to buy a share in this new organization?  Some folks hesitated on answering this question (including me) because they didn't know what the new organization would do, how it would be organized or where the arbitrary $250 price came from. 
Benefits of a L3C were discussed.  This is a hybrid model for creative capitalism.  This type of corporation would allow affiliates, groups etc  to hold shares of stock.  Would allow for charitable donations and would allow for dividends to be paid to shareholders.   Other concerns were voting rights of those groups or farms that bought multiple shares and the balance of power would be "big vs small" once again.

AOBA wants to help build the tent but in NO WAY wants to own it.  They simply wanted to start the conversation and be a part as any other shareholder.  

Here are my thoughts on moving forward: 
  • We need some type of  "tent" organization to focus on fiber only - NOT the animals JUST the fiber.  Supply chain, collection, distribution, education etc. 
  • We NEED a brand - we NEED to educate the public about our product - FIBER NOT ANIMALS. I for one am tired of the "lifestyle" ads and would like fashion or fiber ads!! 
  • We need to give growers a choice:
    • Many already utilize fiber as a small producer or cooperate with groups such as ABP, NAAFP etc etc.  Have these groups be part of the "tent" and able to utilize the new brand.  They have already done some amazing work from scratch - help them be MORE successful- do not try to replace or eliminate them. 
    • Some growers want NOTHING to do with the fiber once they grow it.  
      • Create a collection system to purchase fiber from these growers - Cotton growers do NOT have farm stores selling towels from their farm! 
      • Create a market by which their fiber can be purchased at the "farm gate".  No sorting/skirting etc by them - just clip and bag.
  • Education to the growers to better grow and shear their fleece - guidelines
  • The New organization needs to have some independent (outside the industry) folks involved like Nick Hahn!  I feel that one of the issues with our other efforts thus far is that we in-fight and do not know how to govern ourselves objectively.  This happens in industries in their infancy.  I say Nick Hahn has the experience and we should hire him to do what needs to be done to get this industry on the right track! 
  • Have patience - it took cotton 17 years to get back to where they once were because of synthetics.  
  • Wool and Cashmere are NOT the enemy!!  We are not better than cashmere (although we are more affordable).  We are not better than wool (although we feel better at the same micron).  Embrace these other natural fibers!  Wool (merino) at 30% blended with huacaya makes a much better all purpose yarn than either make on their own.  Merino give it memory and alpaca keeps it skin touch soft.  
  • We need professional staff - this industry is burned out from volunteering
I know that many folks will be hesitant in creating a new organization.  They will say "what about AFCNA"?   Well AFCNA is not working in my opinion and hasn't been for some time.   It gets less and less fiber "donated" each year.  The Alpaca Blanket Project got in over 50,000 pounds of fiber which is a very large amount for a private project.  Is it because of the price that ABP is paying or is it because people have lost faith in AFCNA.  I don't know.  I think that AFCNA cannot take us into the future but there may be a place for them "under the tent" .   AFCNA is the only true co-op that is currently in existence in the alpaca industry in the US and it is "owned" by the members.  The other organizations are all private organizations and can be a choice for growers as well.   (Correction 11/21/10 - NAAFP is also a true co-op and owned by the owners - apologies to the folks of NAAFP)


In creating a new enterprise I adamantly feel that it SHOULD NOT be a co-op.  Co-ops rely on member support and volunteering etc.  I think we need a real corporation, a staff that is answerable to the shareholders like IBM, Microsoft or Exxon!!! 

I am optimistic about the future.  I support moving forward into the FIBER WORLD.  I vote for Nick Hahn to be brought on board to help us get started.  As part of the AOBA Fiber Committee, I will relish helping with this project.  

I will continue to do my own portion of Alma Park Exclusive stuff but LOOK FORWARD to the day where 80% of my clip can be purchased at my "farm gate" and I get a check for it!!  The other 20% of my fiber will be the passion that I currently enjoy, but I can be more focused on the fun stuff with that 80% safely in the pipeline and off "my mind".  

So until the DVD comes out - here is my synopsis!  Please comment good or bad - as we are at the first steps in this process and EVERYONE's opinion matters!!! 









7 comments:

Kathy Ainsworth - Clear Sky Alpacas said...

Rose,
First, thank you for providing such a complete overview of yesterday's meeting. I also attended via internet invite.

As a new farm and a lover of fiber I have to admit I'm totally surprised that the alpaca industry as a whole has not been and continues to fail in marketing the actual product which I also believe is FIBER!

It seems to me that most people already in the business want to sell the animals themselves, speak on and on about the alpaca lifestyle, and fail to promote the benefits of the actual fiber. Many farms we visited prior to our purchase had little knowledge about the fiber aspects - microns, grades, what to do with it!

I was further surprised to find on the list of attendees that I was the only one attending from Michigan! I believe as this necessary direction to promote the fiber industry is taken, we will have a long road to haul with getting the majority of the farms in the US on board as many that I have visited, facebooked with, met at shows and seminars etc are all geared to the "cottage industry" arena - that is IF they are selling their fiber, they are doing so at fiber festivals, on etsy, etc in an attempt to find immediate recooping of their monies to cover expenses.

I'm not sure where the answer lies, but I certainly agree with you - I also would keep a small % for myself to use, but in the larger scheme of things, want to assist in driving the alpaca fiber movement forward.

Thank you again for providing detailed information about the meeting and sharing your personal thoughts!

Kathy Ainsworth
Clear Sky Alpacas
Carson City, MI

Anonymous said...

Rose,
Also, thank you for providing this overview. I also saw some of it on internet but had to miss the afternoon portion. I am really excited and I think other people are as well after reading and hearing all that is being said about what this industry really needs to be. I'm not a spinner, weaver, craft person or knitter, but I breed both suri and huacaya for the ultimate end result beautiful useable FIBER! I want to bag my clip, leave it at the gate and have it picked up and taken away. I want to know I am contributing to an industry that I am helping to build. Sure we too will keep some of our fleece for special projects. But what a feeling to be able to be a part of an industry that is growing more than we know it. I agree that they should hire a person that has been through the ups and downs of the fiber business and can educate and stear us in the right direction. Can't wait for more!
Laurie Findlay
Alpacas of El Dorado

Sherry Alpert said...

Rose
I appreciate the synopsis of the meeting- I guess I did not understand that this meeting was an important meeting about the future of our fiber - I would love to be able to sell my fiber at my gate instead of spending a fortune on shearing, sorting and processing all of my fiber to get a very small amt of yarn that I have to sell at a high price because of the cost-

Sherry Alpert
Awesome Acres Pacas & PrYrs
Oklahoma City

Diane said...

Hi Rose,
I also want to thank you for taking the time to write your synopsis and offer your comments.

I've been in the alpaca business since 2003. I've thought from the very beginning that the alpaca industry needs an end product to survive. There's a finite number of people who want to raise alpacas and if all you're doing is selling animals at some point you're going to saturate the market. I think that day isn't far in the future even though those who still believe in only selling animals would argue. I equate the alpaca business with raising emu's. (most alpaca people will cringe when they read that!) The emu breeders didn't have an end product that the public wanted so their business died. I don't want to see that for the alpaca business.

I agree that we are not in competition with other natural fibers, such as wool, mohair, cashmere, etc. Alpaca fiber is great but it does have it's limitations. Mixed with other natural fibers enhances alpaca and makes it more versatile.

I think the biggest hurdle in developing a fiber industry is getting the majority of alpaca breeders "bought in". Convincing those who are in a "sell animal" mentality that they need to participate in a fiber industry will be difficult. I'm not sure how that can be done.

It would be interesting to do a survey on why people didn't participate in the Build a Tent. I wonder how many breeders didn't participate because they aren't interested in a fiber industry. I didn't participate because I work full time to support the farm and unfortunately they chose a time during the day.

Many alpaca owners don't trust AOBA for whatever reason so I believe that having someone outside the industry running the project would be beneficial. Plus if we could get someone with previous experience it would just save us lots of headaches. Why reinvent the wheel?

Anyway I hope this is a turning point for the alpaca industry. It's needed, it's necessary and it needs to happen now.

Thanks for keeping us updated and I look forward to future discussions about the fiber industry.

Diane Creek
Meadowlark Alpacas
Topeka, Kansas

Parker's Alpacas said...

Yeah, Rose!
Very well summarized for those who wanted to attend but could not because of the dreaded, but very thankful to have in this economy 'day job'!!
Vickie Parker
Parker's Alpacas
4139 Highland Rd.
Melissa, TX. 75454
214-803-0420

Claudia said...

Rose
Thank you for writing an overview so quickly and getting it out. Key to this effort will be using our collaborative resources to keep the communication flowing in a constructive and thoughtful manner. Your blog comments have certainly helped get us off on the right foot.
There will be a preliminary e-mail out on Monday to thank everyone who participated - both in Nashville and on the web. I have also looked at all the web comments and understand the points raised including "how to improve the management of web participant input". At this point I would like people to have a little time to talk to their various organizations and among themselves with a definitive statement as to "next steps" posted the week following Thanksgiving.
Again, thank you for blogging.

Pamela Harwood said...

Rose,
One clarification within your excellent synopsis: The North American Alpaca Fiber Producers Cooperative IS registered as a true agricultural cooperative as per IRS guidelines.
Pam

Pamela Harwood
Longwoods Alpaca Farm, LLC
Cumberland, ME