California Wool Mill Feasibility Study

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Information about California Wool Mill Feasibility Study
Business & Mgmt

Published on March 14, 2014

Author: AmberBieg

Source: slideshare.net

The California Wool Mill: A New Model for Making Fabric

The Study Team: • Amber Bieg, MBA – Green-Ideas • Dustin Kahn - Fibershed • Rebecca Burgess - Fibershed Funders: • Lorene Arey, Clara Fund • Don Shaffer, at Rudolf Steiner Foundation • John Wick and Peggy Rathmann • Heather Blackie, Blackie Foundation Research Support: • Key Contributors: Lydia Wendt, Marcia de Longe, Jenny Kassan, and Erin Axlerod • Processing: Dan Rhodes of Gaston College, Amaury De La Forcade of NSC, Lynda Grose of California College of the Arts • Supply: Mike Corn of Roswell Wool, California sheepherds and rangers, farmers, shearers and everyone who answered the surveys • Demand: Designers and apparel brands who answered our survey and interviews

Outline Introduction Supply Analysis/Inventory Demand Analysis Mill Operations and Site Feasibility Mill Financial and Environmental Performance Economic and Community Impact Analysis Conclusion and Recommendations

INTRODUCTION

Human Textile Culture High Tech Craft

Synthetic garment fibers are the greatest source of plastic pollution on the world’s beaches (NY Times, 2011)

20% of global water pollution is from textile dyeing and treatment (World Bank, 2013

Child labor and forced labor still are problems in the textile supply chain

Culture of Sheepherding at Risk

It’s time for a new model . . . Sheep to Chic

SUPPLY ANALYSIS

CA Wool Inventory Quantity Total inventory = 1.4 million lbs. of wool, 44.8% of total CA supply

CA Wool Inventory Quality 79% is fine enough to wear next to skin!

CA Wool Inventory Color and Usability Breeding needs to be optimized for fineness and color diversity!

Flock Size and Wool Quality

DEMAND ANALYSIS

Consumers want local and domestic 0 100 200 300 400 500 600 700 Support ag and local economy Perceived Safety and Quality Env. Benefits from farms Reduce fossil fuel use Willingness to pay 25% or more price markup for local Source: Iowa State University, Allan Ortiz 2010 In a NY Times Survey, 68% of respondents preferred products made in the U.S. and were willing to pay more!

Re-shoring is already happening are employing far fewer workers. (Clifford, 2013).” This advantage is particularly true in the production of wool knits. The cost of raw material is the same, the labor is minimal and the cost of transportation is less, making a more cost efficient product. Bayard W inthrop, the founder of the sweatshirt and clothing company American Giant said: “ Now it is cheaper to shop in the United States,” (Clifford, 2013). Figure 19: How much it costs to make a hoodie. Representative wholesale costs, according to Bayard W inthrop, the founder of American Giant. Source: New York Times, September 19, 2013. How much it costs to make a hoodie. Representative wholesale costs, according to Bayard Winthrop, the founder of American Giant. Source: New York Times, September 19, 2013. “LA’s Single brand can turn around 800 silk print dresses for Neiman Marcus and Lord & Taylor in as little as two weeks, now that 90% of its production is done at home with only a $1/dress price difference, with quality control and timing much better (Los Angeles Times, 2011).”

Recommended Products 4.5 oz. knit fabric, 60" wide on bolt 8 oz. knit fabric, 60" wide on bolt 12 oz. knit fabric, 60" wide on bolt 4.5 oz. seamless garment 8 oz. seamless garment 20 oz. knit fabric, 60" wide on bolt

Addressable Market Consumers LOHAS Brands Total Addressable market = $14.7 billion $331 billion US Apparel Market $290 billion LOHAS market $36 billion in CA textile/apparel market $14.7 billion CA brands textile market

Potential Customer Research “Made in California taps into our original roots. As a company based out of Berkeley and tied very closely with California culture, we believe that Made in California will mean a lot to our customers.” – KRYSTLE MOODY, THE NORTH FACE “Localized production is important. I would love to see regional textiles from Northern California.” – SCOTT LEONARD, INDIGENOUS “We pride ourselves on quality: quality of fiber, yarn and fabric. We source from the best of the best. We would be interested in sourcing from California, especially if we can lower our footprint, without lowering our environmental and quality standards.” – RYAN THOMPSON, PATAGONIA

Customer Needs “We are interested in sourcing from California for quicker turn-around time.” – JUICY COUTURE

MILL OPERATIONS AND SITE FEASIBILITY

The Greasy Wool to Garment Process Wool Aggregation Cutting and Sewing Wool fabric milling

The Equipment Scouring Combing Spinning Knitting

Areas of Research and Development Enzymatic Superwash Natural Dyes Bast Fiber Blends Colored Wool Blends

Production Volumes Yield Post-ScouringBased on current wool supply and growth projections BATCH SIZES

Conceptual Design 85,000 square feet, 97% renewable energy, 100% water recycling Facility

Closed Loop Milling System

Water Use

Water Recycling System

Energy Energy Use Solar vs Grid

Heat and Cooling Systems Solar Hot Water Heater Geothermal Heat Pump System

Waste

MILL FINANCIAL AND ENVIRONMENTAL PERFORMANCE

Profitability

Profitability

Revenue

Capital Costs and Expenses 86%

Per Unit Margin

Location Performance Comparison

Life Cycle Analysis Scenarios • 1. Conventional realistic • 2. Conventional optimistic • 3. Fibershed Soil Neutral • 4. Fibershed geothermal mix • 5. Fibershed geothermal • 5. Fibershed solar • 7. Fibershed Compost and Solar

Life Cycle Analysis

Multi-Stakeholder Coop & DPO The nonprofit Fibershed Ranchers (producers) Designers and artisans (consumers) The mill workers Mission-aligned supporters (investors)

Initial Funding Start-up financing from foundations and impact investors USDA grant funding Co-op member equity contributions Direct public offering (DPO) of preferred stock

What are the next steps? Prototype & Test Market Viability Mill Business Plan Design and Build Mill

Step #1 Prototype • Use existing US milling facilities to produce fabric using California wool. Test Market Viability • Sell the prototype fabric.

Thank You For questions or comments, please email Amber Bieg amber (at) californiacloth.com

BIBLIOGRAPHY

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