Alpaca United Progress Report:
Fast Forwarding the Commercial Alpaca Fiber Market
by Diane Beauchner
Editor’s Note: Following is an update on the progress Alpaca United has made since I last reported on this new alpaca organization. For complete information on its beginnings see my article in Alpacas Magazine, Spring 2011.
New Year. Perhaps one of your resolutions is to take a closer look at the direction the alpaca industry in general and your farm in particular is headed. Show attendance is down. Alpaca sale and breeding prices are down. Some say it’s the economy. Some say it’s a faulty business model whose time is up. If you are a breeder who has had to drop your alpaca prices to an all-time low in order to keep some money in the bank to feed the rest of the herd, clearly, the show ring model is not working for you. The harsh reality is that some breeders in the industry are looking for a way out or a new way up.
“The bottom line is that this industry has existed in a bubble,” says Nick Hahn, CEO of Alpaca United. “Outside of dealing with one another, most people don’t know anything about alpaca and if they do they thought it was some sort of hobby farming where we are ripping off the government.” Hahn himself did not know what an alpaca was even though he spent years in the textile industry as CEO of Cotton Inc.
Alpaca United is one of the organizations that is presenting an alternative focus as a way up for the industry. Breed for fiber to sustain a commercial fiber market in the United States and internationally. Radical thinking and a total change of focus for some breeders who have bags and bags of fleece just sitting in their barns. Learning about fiber characteristics and knowing what to do to change or alter your farm’s focus will take time and energy -- resources that are in short supply from breeders who may already work full-time at jobs outside of the alpaca business. Indeed, co-ops and fiber organizations have existed all along and have made great strides in overcoming obstacles and collecting, marketing and selling fiber and alpaca products.
However, few alpaca start-up organizations have had as aggressive initial campaigns as Alpaca United. The organization front man and spokesperson, Hahn, is everywhere. More than frequent flyer Hahn admits that the secret to success of his 50 year marriage is that he travels a lot. He’s not kidding. Hahn, meeting and greeting alpaca breeders and preaching the AU fiber gospel, has attended almost every alpaca show in the country since the organization started in March 2011 as well as the grandaddy of textile trade shows, the International Exhibition of Textile Machinery (ITMA), in September 2011. Attendance at ITMA, the world’s largest international textile and garment machinery exhibition, falls in line with the initiative that states that Alpaca United is tasked to “develop an image behind the Alpaca United logo -- this can be achieved through attendance at trade shows over a 12-month time frame to promote North American alpaca and create an image of high quality and luxury.”
One of the most interesting discoveries to come out of Alpaca United’s attendance at ITMA was that the textile community as a whole did not know that there was an alpaca industry in North America; they thought it was all in South America.
Attending ITMA along with Hahn and the rest of the team was Liz Vahlkamp, one of the Directors of Alpaca United and owner of Salt River Alpacas in Paris, Missouri. Another AU representative who was a natural fit for a Director position is Robyn Kuhl, owner of From the Heart Ranch, home to 60 alpacas in Sandpoint, Idaho and co-founder of Coarse Broads, Inc. whose mission is to “diversify their livestock business by developing and putting into production their annual harvest of fiber from their alpacas.” Both women paid their own way to attend this show in Barcelona, Spain.
“All of us were amazed at how few textile people even know what an alpaca is,” says Vahlkamp. “Perhaps that’s because Peru has a list of customers and they sell out their clip every year so why should they do any kind of marketing of alpaca?”
Kuhl was amazed that about 95% of the textile industry did not know what alpaca fiber was; they thought it was manmade.
“We found that people were interested in natural fibers” continues Vahlkamp. “It’s a hot topic right now.”
Vahlkamp describes feeling frightened of Peru prior to her attendance at ITMA but says she came away with the awareness that there is enough interest and capacity for both the United States and Peru to be players in the international alpaca fiber market.
ITMA was a well-attended event to say the least. It had over 100,000 visitors from 138 countries, 1350 exhibitors from 45 countries, 159 supporting associations from 63 countries and 53 supporting media from 19 countries.
“We collected over 700 business cards,” reports Hahn. “One hundred four had specific notes where people were looking for samples of yarn and more specific information which we are doing now. All of the media picked us up one way or another.”
Vahlkamp says that AU was told repeatedly at ITMA that they need to hire a sales agent; someone who can match fiber companies in the United States with international buyers. Right now Alpaca United is handling all requests that are coming in for alpaca fiber and yarn.
In mid-November Hahn reported that there have been a number of requests for both fiber and yarn. Here is just one example of an order that he received from a potential buyer in Europe:
Baby Royal 19-20 mic 65-70mm
Baby 22-23 mic 66-72 mm
Fleece 25.5-26.5 mic 70-75mm
Huarizo 30-31 mic 70-80mm
Coarse 33-36 mic 70-75mm
Suri 23 mic 70-72mm
Suri 27 mic 80-85mm
“We are still working out specifics but expect to have a market exchange silo on our website where buyers and sellers can post,” says Hahn. “This will include a percentage or flat fee for AU but details have not been established yet.”
In the ‘where we are at’ timeline, this is the critical point and the area that needs the attention of investors and others in the alpaca industry who want to see this initiative move forward.
“What came out of ITMA was that we now know where we’re at,” says Kuhl. “If you don’t know where you’re at you can’t get to where you are going. We are in the best position we can possibly be in relation to what the textile industry would like to see.”
Kuhl has a strong message that she tries to get across when she is hired to sort and grade or speak about the mission of Alpaca United.
“I am encouraging everyone to get their fiber into the pipelines. We have enough fiber to fill some of the demand but if the demand comes in and the fiber isn’t in the pipeline but in someone’s barn, we can’t fill the order and the buyers won’t wait. Textile has a lead time of two years so we need to get the pipelines full.”
A recent elbast message to investors includes Alpaca United’s reminder of what they are about and what they have accomplished so far. Their message states that Alpaca United’s primary goals are to increase fiber value, create markets, and to support fiber-related infrastructure for the North America alpaca owner. As value rises, all alpaca owners and breeders will benefit from greater markets and higher returns.
“The intrinsic value of the animal is about the fiber,” says Hahn. “That’s what Alpaca United is all about. We are preoccupied with reconciling what breeders are breeding for and what the mills want. We do think we can develop some regional collection to sort, grade, bale and have it for sale. Three organizations, Alpaca United, AFCNA, and AOBA are collaborating for a collection going forward, hopefully with one major collection next spring.”
Kuhl has strong feelings about using the infrastructure that is already in place and does not want to see Alpaca United compete with the organizations that are already there. She wants to see Alpaca United fulfill its mission to support the organizations that are currently operating and allow others to start organizations. She also wants to see the investors, who to date number 680, speak up and make their needs and wants known to the Board of Directors so the organization can continue to move forward.
“Cotton will always be king,” says Kuhl. “And manmade fibers are still very dominant. Alpaca should be looked at as the new wool. What we found at ITMA was that it was not about knitting yarn. In the knitwear and woven area you are not going to see 100% alpaca because the price point it too high. We found that 70% of the companies wanted cone yarn and not raw fiber.”
Kuhl explains that one problem the alpaca industry has is the disparity between primary and secondary fibers and says we need to fix that problem if we are marketing alpaca fiber as soft.
“We have to make a conscious decision to make better breeding decisions. Breeders have to open up their fiber and really look at it and see how big a difference there is between primary and secondary fibers. If we really want to go the textile route, breeders need to expose themselves and sometimes it’s painful but you can’t grow from a position of denial.”
What Kuhl is talking about is the difference between what fiber characteristics win ribbons in the show ring and what the mills want. The mills are looking for uniformity of grade between primary fibers and secondary fibers. The color, crimp and luster that are showcased in the ring and in alpaca ads do not offer any value as far as the mills are concerned. Kuhl and others like her who are trained in the Certified Sorted® system can help breeders make breeding decisions that will result in fiber that the mills want. For example, one of the services provided by sorters trained in the Certified Sorted® system is to provide their clients with a copy of the Alpaca Dating Game which outlines how to match up the traits to improve the negative traits of the female with the positive traits of the male, while making sure not to have the same negative traits present in both.
Vahlkamp too knows a thing or two about fiber and collection and making a profitable business out of the fiber of her suri alpacas and believes, along with Hahn, that you have to create demand before you create supply. As past chairperson for the Suri Network she got to the point where there was a lot of interest in suri fiber but no central place for interested people to purchase suri. At about this same time Build-A-Tent (former name of Alpaca United) was being organized to help promote collection sites and infrastructure and it was a natural fit for Vahlkamp to throw her hat in the ring to be considered for a Director position to help the industry as a whole figure out how to create a successful supply and demand system for North American alpaca fiber.
“I would say that Alpaca United sees one of its roles as assisting growers and processors in getting the fiber from pasture to product - in a variety of ways, and via both domestic and international paths,” says Vahlkamp. “ I think there is a perception by many that dealing with the international market means following the traditional system of selling raw fiber, which tends to be very low profit. There is a desire on the part of many alpaca breeders to capture a greater return on their fiber by going farther up the value chain. My take-away from ITMA was that there are more options than just selling raw fiber and that there is a place for those North American individuals and companies who want to add value to the fiber and sell it as yarn or fabric.”
Vahlkamp says that the AU team met several European companies that produce high-end garments for small, niche markets, and they would be buyers of yarns and fabric and could afford to pay more for top quality products.
Alpaca United has been operating since March 2011. In messages to alpaca breeders it is clear that the coffers need to be replenished. It costs money to pay the creative team, reimburse the administrators and others on the board of directors, and fly Hahn from town to town and fund his speaking engagements at alpaca shows. Travel isn’t cheap and Hahn certainly has much success in signing up investors when he gets in front of them at shows and alpaca events. He is constantly beating the drum and flashing the “Alpaca United Needs YOU” sign. A recent message pleads, “Your support of $250 or more gives you a vote in member decisions and a front row seat in this industry changing effort.”
To address the dwindling funds, Alpaca United is applying for grants to help fund some of the more aggressive and permanent initiatives like creating a Center of Excellence and Show Room at North Carolina State University. This initiative states that “this center should be developed to provide ongoing research and development that will further the alpaca fiber industry as a whole. It should achieve three near-term objectives - 1) improve the efficiencies of fiber pool collection and preparation, 2) provide basic fiber research that is available to all alpaca growers, and 3) provide private research that is available, for a fee, to private individuals or companies needing proprietary knowledge in order to further their own processing techniques and/or product development.
Currently, walking the campus of NC State and talking about his newfound knowledge of alpaca is Brian Hamilton, PhD candidate from North Carolina State University College of Textiles and Alpaca United intern for the ITMA show. Hamilton attended ITMA with the AU team and assisted in talking with visitors to the booth.
“The Alpaca United booth was an attention-getter,” says Hamilton. “It was a really fashionable display where people could look at and touch the fiber in all the different natural colors.”
All those natural colors were traffic stoppers at the show.
“The biggest thing was the 23 natural colors [of alpaca],” says Kuhl. “This proved what we have been saying all along that we don’t have to have a white industry. We need to capitalize on the color and embrace it.”
The price tag of $35,000 for Alpaca United to attend ITMA was offset by the sale of sponsorships of those mosaic tiles and advertisements in the directory. The booth, business cards and catalogs were designed by Julia Balfour, LLC, the same creative team who put together the Alpaca United logo and website.
That swanky, state-of-the-art Alpaca United website is where you will find Hahn’s messages and schedule. It’s a clean, pleasing website that is easy to navigate, and captures your attention with its captivating videos and photographs of stunning models wearing alpaca clothing. Hahn keeps his finger on the pulse of textile market reports and fashion industry news and pumps forth any and all news clips, photos and tweets regarding alpaca as related to high end fashion. You can find his scrolling scripts and quips, videos from ITMA, and assorted musings on the AU facebook page, which is currently liked by 1177 fans.
Whether you’re a button-wearing proud investor, a breeder who has taken a wait and see attitude, a naysayer, or ambivalent about Alpaca United and its mission, if you were to objectively look at the progress this organization has made in the past nine months you could surely mark “Puts Forth Much Effort” and “Displays Good Work Habits” in the comments section of the report card.
Wherever you stand in the support line, perhaps now, in addition to standing in the show ring with a nice-looking alpaca you may begin to look at your alpacas under a new light. Is their fiber the grade that the mills are looking for? Are you surfing the net trying to decide to which organization you will send your bags of fleece to be processed and put into the pipeline? Checking your calendar to fit in a sorting class or hire a sorter to sort and grade your fiber? Can you begin to see value in the fiber and start to look forward to all those “Cash for your Clip” and “Funds for your Fiber” events because Alpaca United has done their job and created the demand for your precious animal’s fiber?
Time will tell.
About the Author: Diane Beauchner, together with her family, own Shepherd Hills Alpacas. They agist their alpacas at Flint Stone Farm in Coopersburg, Pennsylvania. She has been Editor of the MAPACA Newsletter for the past year and is grateful to have had the opportunity to contribute to the MAPACA organization in this manner.
[photos from ITMA
caption: Alpaca United exhibit at the ITMA show in Barcelona, Spain in September 2011
Mosaic Tile Wall
caption: Nick Hahn talking about alpaca fiber at the ITMA show]
[include Alpaca United cartoon on one of the pages containing the article]
[boxed call out the following:]
Accomplishments So Far:
Hired a CEO: Nick Hahn, former CEO of Cotton Incorporated
Developed a logo and Tag Line
Formed Strategic Task Forces
Licensed the Company in North Carolina as an L3C
Seated a Board of Directors (BOD)
Approved an Operating Agreement
Branding North American Alpaca fiber through world-wide fashion and textile publications and venues participating in the International Textile Mfg. Assoc. conference in Spain (ITMA)
Bringing together current infrastructure, such as fiber cooperatives, mills and auctions and seeking new business ideas
Developing a comprehensive Alpaca Industry data base of services and programs
*Establish a National Alpaca Center of Excellence in NC (initiated)
*Establish an Alpaca Fiber Library and Design Center in NYC