final bremen presentation - baumwollboerse.de · title: final bremen presentation.key created date:...

54
HOW COTTON CAN AVOID BECOMING WOOL EMBRACING CHANGE: By Robert P . Antoshak, Managing Director, Olah Inc.

Upload: others

Post on 26-May-2020

17 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

H OW COTTON C A N AVO I D B E C O M I N G W O O L

E M B R AC I N G C H A N G E :

By Robert P. Antoshak, Managing Director, Olah Inc.

Page 2: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

I H AV E N OT H I N G AG A I N S T W O O L .

Page 3: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

But I do have a worry …

Page 4: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

THIS IS CONCERNING.

Global Fiber Consumption

Milli

on To

ns

0

17.5

35

52.5

70

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Source: Gherzi Textil Organisation

MMF/Other

Cotton

Wool

Page 5: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

THIS IS EVEN MORE CONCERNING.

Global Fiber Consumption

Milli

on To

ns

0

30

60

90

120

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2030

Source: Gherzi Textil Organisation — Forecast —

Cotton

MMF/OtherWool

Page 6: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

SO WILL COTTON BECOME A

“LUXURY” FIBER?

Page 7: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

COTTON’S STRUGGLES

Of course (happily) cotton has done much better over the past year

However, it’s the long-term trend that worries me

We can blame synthetics, or blame weather or blame inter-crop competition, or even blame cotton promotion in general

But assigning blame misses the point: we need to identify what’s going on beyond the farm — in the textile supply chain and at retail

Page 8: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

OUR CUSTOMERS ARE CHANGING AND IT AFFECTS EVERYONE

Page 9: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

HERE’S RETAIL APPAREL INDUSTRY IN FOUR SLIDES:

Page 10: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z
Page 11: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z
Page 12: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z
Page 13: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z
Page 14: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

Let’s look more closely.

Page 15: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

SO WHERE’S RETAIL RIGHT NOW?

Lots of change

Apparel sales are struggling to keep up

More competition for consumer spending

Common trends between U.S. and E.U.

Page 16: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

U.S. RETAIL APPAREL SALESBILLION US $

Source: U.S. Census Bureau

$0

$65

$130

$195

$260

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Page 17: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

TOTAL U.S. RETAIL* VS. APPAREL SALES MILLION US $

Source: U.S. Census Bureau* Excludes Motor Vehicles

$0

$1,250

$2,500

$3,750

$5,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Other

Apparel

Page 18: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

SLOWING DOWN? U.S. APPAREL SALES VS. POPULATION GROWTH

Source: Forrester Research

Billio

n U.

S. $

0

65

130

195

260

Milli

on P

eopl

e

290

297.5

305

312.5

320

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Population Retail Sales

Page 19: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

BRICK & MORTAR IS STILL MUCH LARGER THAN ONLINE

Source: U.S. Census Bureau

Billio

n U

S $

$0

$75

$150

$225

$300

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Brick & Mortar

Online

Page 20: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

BUT ONLINE HAS GREAT INFLUENCEUS APPAREL RETAIL SALES BY TYPE

Source: Forrester Research

0%

25%

50%

75%

100%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Off-line Only

Web Influenced

On-line Only

Page 21: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

ONLINE APPAREL SALES CHINA FORECAST TO BE LARGEST

Source: Statista.Com

Billio

n U

S $

0

150

300

450

600

2016 2017 2018 2019 2020 2021

$285$261

$228

$194

$159$126

$141$131$119$108$97$87

$96$90$84$77$70$63

USEUChina

Page 22: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

INFLUENCE OF ONLINE AFFECTS EU RETAIL, TOO

Source: Forrester Research

Billio

n Eu

ros

0

450

900

1350

1800

2015 2016 2017 2018 2019 2020

€846€873€896€908€921€934

€704€655€601€551€503€457

€243€221€201€182€164€146

Online SalesWeb-Influenced SalesNon-Online Sales

Page 23: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

GLOBAL RETAIL & ONLINE FORECAST

%Change 2013 2014 2015 2016 2017 2018Brick&Mortar 6.4% 6.1% 6.4% 6% 5.8% 5.5%Online 25.9% 22.2% 20.9% 18.6% 16.4% 13.3%

Trilli

on U

S $

0

10

20

30

40

2013 2014 2015 2016 2017 2018

$2.5

$2.2$1.9$1.6$1.3$1.1

$28.3

$24.6$23.5$22.3$21.2$20.1Brick & MortarOnline

Source: eMarketer

Page 24: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

SO WHAT IS APPAREL COMPETING

AGAINST?

Page 25: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

COMPETITION FOR CONSUMER SPENDING — THE GLOBAL AVERAGES

Page 26: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

AND THERE ARE SOME MACRO TRENDS WE NEED TO CONSIDER

Page 27: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

WORLD POPULATION GROWTHRATE OF GROWTH IS SLOWING

Source: U.N., Dept. of Economic & Social Affairs, Population Division

0%

0.55%

1.1%

1.65%

2.2%

1955 1965 1975 1985 1995 2005 2015 2017 2025 2035 2045

Page 28: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

GLOBAL MEDIAN AGEEVERYONE IS GETTING OLDER

Source: U.N., Dept. of Economic & Social Affairs, Population Division

Age

in Ye

ars

0

10

20

30

40

1955 1965 1975 1985 1995 2005 2015 2017 2025 2035 2045

Page 29: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

GROWTH IN GLOBAL GDP HAS BEEN SLOWING FOR AWHILE NOW …

Source: The World Bank

-3.5%

-1.75%

0%

1.75%

3.5%

5.25%

7%

61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15

Page 30: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

AgeGetting older

Yes, we have a new generation of consumers, but that generation lacks the purchasing power of their elders.

A rising median age means population growth will slow.

But with fewer new consumers entering the market, and with less disposable income, there’s not enough demand to equal the rapid growth of older generations.

PopulationGrowth Slowing

Slowing population growth translates into less people

to buy more stuff.

So, the models of the past will increasingly under pressure from simple

demographics.

Of course, growth will vary by country and region, but

there’s not enough population growth in

developing countries to offset all of the declines

elsewhere.

Page 31: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

SO PRICES WEIGH HEAVILY ON THE TEXTILE SUPPLY CHAIN

Page 32: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

SO, HOW HAS THE TEXTILE SUPPLY CHAIN RESPONDED?

Page 33: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

IT’S BEEN A BRAWL!

COTTON AGAINST COTTONAGAINST SYNTHETICSAGAINST TEXTILES, ETC.

Page 34: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

HOW DID COTTON REACT?

•IT DISPERSED•INDUSTRY ADOPTED DIFFERENT, SEGMENTED MESSAGES

•LOST IN ALL OF THIS IS WHY COTTON IS GREAT, WHY IT IS SUSTAINABLE AND PREFERABLE TO SYNTHETICS

Page 35: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

HERE’S WHAT I MEAN

Page 36: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

WE HAVE CONFUSION ...

Page 37: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

IT CAN BE CONFUSING FOR A RETAILER OR BRAND

Page 38: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

I BLAME THE ORGANIC PEOPLE FOR STARTING THIS

Page 39: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

RETAILERS EMBRACED ORGANIC COTTON AS SOMETHING NEW FOR THEIR CUSTOMERS …

… ONLY TO FIND OUT ABOUT ITS SHORTCOMINGS

Page 40: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

WHICH BRINGS ME TO CONSUMERS ...

Page 41: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

FICKLE.COST SENSITIVE.FASHION CONSCIOUS.ADVOCATES.KNOW WHAT THEY WANT --OR NOT!

Page 42: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

BUT IT’S A TOUGH RETAIL MARKET — YIKES!

FLAT MARKET.EXCESSIVE COMPETITION.RECESSION.CHANGING DEMOGRAPHICS.UNCERTAINTY.FEAR.OLD HABITS.GLOBALIZATION.ADVOCACY GROUPS REVIEWING SUPPLY CHAINS.

Page 43: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

SO WHAT’S A RETAILER OR BRAND TO DO?

Page 44: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

MANY SLASH THEIR PRICES, OF COURSE — OH JOY.

Page 45: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

BUT THERE’S SUSTAINABILITY …

Page 46: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

OR HOW GREEN…MAKES GREEN

Page 47: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

SUSTAINABILITY IS A MEANS FOR COTTON TO REGAIN MARKETSHARE

Environmental sustainability is actually an outgrowth of the organic movement, but unlike organic production, sustainability, when properly managed, can contribute to a company’s bottom-line.

It can be commercially scaleable

It can cut the cost of operation

It can enhance efficiency

It meets the demands of customers

While at the same time being good for the planet

Page 48: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

BRANDS AND RETAILERS ARE ALREADY ASKING FOR SUSTAINABLY

PRODUCED COTTON.

Page 49: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

BUT THERE’S A PROBLEM AND AN OPPORTUNITY

How do we define sustainability?

As we’ve seen earlier, there are lot’s of programs in the cotton industry already touting sustainability

In turn, that has helped to scatter cotton’s message

But, there is a common belief around the industry that cotton is environmentally sustainable. It is good for the earth, and efficient growing practices can make for a more competitively priced product with better margins.

Page 50: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

FINDING A COMMON THEME FOR SUSTAINABILITY — DEFINE IT.

Page 51: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

A COMMON SUSTAINABILITY STANDARD?

Instead of different standards, let’s agree on a common industry standard

And then take the fight to synthetics.

Page 52: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

AND HELP OUR CUSTOMERS TO BETTER KNOW OUR PRODUCT

Page 53: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

OTHERWISE, WE RISK DECLINE

Page 54: Final Bremen Presentation - baumwollboerse.de · Title: Final Bremen Presentation.key Created Date: 20180308183501Z

THANK YOU!

Robert P. AntoshakManaging Director

Olah IncPh. +1 615 512 5346

Email: [email protected]

www.kingpinsshow.com