As a young man in New Zealand, Jeremy Moon became fond of sheep. Wait a minute, let's start that again. As a newly minted cultural anthropologist making a living in market research, Jeremy Moon was given a T-shirt by a farmer in the Southern Alps of New Zealand and was asked what he thought of it. The T-shirt was not only remarkably soft, but it also refused to hold body odor. "It didn't look too good, but it felt amazing. And I kind of fell in love with the feeling of it," says Moon. The shirt was made of merino wool, and soon Moon was woolly-brained about merino.
New Zealand has 40 million sheep ("We ate the other 20 million," he says), 2 million of which are merinos. The mountain-dwelling merinos provide the raw material for a surprisingly hot product in the world of sports apparel: woolen performance wear. At a time when highly technical synthetic fabrics rule the sports-gear business, the idea that wool can compete seems strange. Says Moon: "My purpose was to create a new category around natural-tech products. The tension has been creating something new from something very old."
Moon's company, Icebreaker, boasts more than $100 million in sales featuring a fiber that predates the Romans but until recently was used mainly for men's suits and sweaters. In addition to woolen performance gear for skiers, runners, hikers and bikers, Icebreaker makes woolen underwear. Sustainable woolen underwear.
Although merinos are not native to New Zealand the colonizing Aussies brought their Spanish merino beasties with them in the 1840s sheep stations have been New Zealand's agricultural engine for decades. The problem for the farmers was that the wool from those sheep had become a commodity. Farmers couldn't count on a predictable price, nor did they guarantee any particular quality.
When he started his company in 1995, Moon bought wool the way everyone else did: a season at a time, the price varying each year according to supply. That sourcing method almost broke Icebreaker in the late '90s when its products began to unravel because of inconsistent fiber quality. So Moon broke the commodity cycle. He began to offer farmers multiyear contracts at guaranteed prices, provided they could produce a uniformly high-quality fiber. At the same time, Icebreaker developed stringent quality standards.
It's a deal that works for both sides: farmers have a predictable income, and Icebreaker a steady, high-quality supply. Icebreaker now buys about 20% of New Zealand's wool, says Moon. "We've set up a whole system of contracts with the growers, pay them a premium into the future, and we've created a whole shift in the whole agricultural base in New Zealand."
If ever a nation was ripe for a sustainable business model, it would be a place of incredible natural beauty like New Zealand. Each of the garments Icebreaker makes has a "baacode" groan allowing the user to trace the lineage of his or her sweater or base layer back to the sheep station it came from. "It's a very rational story. You know, we get five tops from one sheep, and the sheep lives through summer and winter, and if it works for the sheep, it will work for you. It's quite a nice, simple mother story," says Moon. It's actually a good deal for the sheep too; they get to live out their days rather than getting culled for the slaughterhouse.
Outdoor companies such as Patagonia and Columbia have spared no effort in creating sustainable, environmentally friendly products and practices to stay connected to consumers. Patagonia was the first outdoor-clothing manufacturer to offer fleece made from recycled soda bottles. That's still a petroleum-based fabric. Icebreaker is essentially using a natural material to offer a knockoff of a synthetic fabric; it's called Realfleece, and it's similar to the synthetic fleece but made of merino. Call it life imitating artifice.
Sustainability is all touchy-feely and responsible, of course, but nobody would give a sheep's bottom about any of these products if they didn't perform well, especially considering that an item like the Coronet Sweater 320 sells for $160. Depending on how cold it is and what you're doing, you can choose from a product line that includes everything from undies to base layers, T-shirts and sweaters of varying insulation strengths. Icebreaker recently added a line of casual wear it calls Superfine. New Zealand's merinos produce a wool that has a very fine diameter, which makes it soft and breathable yet with high insulation value for warmth. Having field-tested the woolen underwear c'mon, it had to be done I can attest that it was comfortable and dry during an intense day of skiing in Canada. "Awesome" is how a salesperson at Paragon Sports in New York City describes the line. "It's like wearing your pajamas."
Having established itself in Europe, Asia and, of course, New Zealand, Icebreaker is trying to break out in the U.S. To do that, Moon moved a chunk of the company and himself to Portland, Ore., the epicenter of the sports-apparel and -gear industry. Nike started in nearby Beaverton, and eight years ago, Adidas opened its U.S. headquarters in Portland. It's also the home of outdoor-wear companies like Columbia. In short, it's a place to compete for people, creativity and technology.
It's filled with people who understand apparel branding. Moon has poached talent by offering marketers the opportunity to develop a relevant, cool and sustainable brand in essence to re-create a Nike or an Adidas. "We've hired a lot of people out of Nike and Adidas, because they see a future in natural performance products. They are sick of working for big companies churning out synthetics," says Moon.
Of course, once upon a time, Nike was as small, innovative and edgy as Icebreaker is today. The cooler Nike became, the bigger it got. That's the general idea in business, isn't it? Moon says Icebreaker can remain a happy place with $300 million in sales big enough to command attention but small enough to remain private, as it is now. "I know that we can get bigger, but I don't really care," he says. Besides, any bigger, and he may run out of sheep.