Paul Holmes interviews Jeremy Moon.
PAUL The 2025 Taskforce released their second report last week, saying the income gap with Australia is going to get worse if the government doesn't commit to unwavering growth. They predict up to 400,000 of our best people will up and head to Australia in the next decade. One company not heading overseas is clothing company Icebreaker. It sells a unique product globally at a high price with a very strong brand. Jeremy Moon set up Icebreaker 15 years ago. It's got an annual turnover of about 120 million dollars, and over the next three years the plan is to double that. How do they do it? Welcome to Jeremy Moon. You are an amazing success story - a 120 million dollar company. You've doubled in size over the past three years during the financial meltdown around the world. How did you do that?
JEREMY MOON - Icebreaker
Well, having Sarah Palin wear Icebreaker on the cover of Newsweek, I'm not sure if that helped or not, but that's a true story, that actually happened.
PAUL Yes, I know, late last year.
JEREMY That's right. In fact, I got into trouble because I said the fact that she looked both smart and hot was power to the transformative power of NZ merino.
PAUL Did you get a reaction from her?
JEREMY Yeah, I did, actually, because the Herald picked it up, and then, unfortunately, the Alaskan Tribune picked it up, and it was a storm in a teacup, storm in a Tea Party. But yeah, I mean, I reckon there's a couple of things. Icebreaker is simple in that we're very focused on one thing, which is taking a natural fibre and giving people around the world a choice in an age of synthetics. And that sounds really simple, and there's a process to do that, but having an absolute simple clarity of purpose has been a lot to do with our success. Because we're known internationally as 'the merino people'. And now 80% of our sales are international sales, beyond New Zealand. So when you're building a company from New Zealand, you can only be, kind of, known for doing one thing really well.
PAUL Yeah, but when you look at your product, you are not a cheap product, and retail pretty much around the world has gone pear-shaped. So what can we learn from that?
JEREMY Well, I'm really glad you brought that up, because in business you've got two strategies: you can either be the cheapest or you can be the best. And from New Zealand, forget being the cheapest, so we've really only got one strategy when we're building international products, and that's to be the best. So being the best means how do we have something that's distinct, so it's harder to copy, and meaningful? And it's this tension between creating something really different, which gets us away from competitors, and meaningful, to get us close to customers. So when we're designing our products and actually designing our business, that's the type of tension. And it sounds quite abstract, but the fact that we only use New Zealand merino and that we've created really specialist fabrics around that has pushed us so far away from our competitors, the big guys, the billion-dollar companies like The North Face and Patagonia - they're our benchmarks. And having the challenge of competing on their turf with our ideas, that's the whole fun.
PAUL Yes. There is another dimension, though, isn't there? What is it you are actually selling? Are you selling clothing or are you selling a story?
JEREMY Well, that's the great question. In fact, we did some work a couple of months ago with a big US research firm to work out how to crack the New York market, cos we're opening a flagship store in Soho in New York in a couple of weeks, and they said, 'Look, New Zealand's great, but most people don't know much more than it's a nice place, so focus on having a hook to get into their wardrobe. Tell us the stories about how it's worn before you tell us the story about how it's born.' So I think in New Zealand we think that everyone's waiting for New Zealand, and that because we're so unique it's all about New Zealand, but actually, it's about being totally relevant to the people that you're talking to, and then backfilling it with the romance and the beauty and the distinctiveness of New Zealand.
PAUL Of the lonely merino in the beautiful mountains, yeah.
JEREMY Yeah, exactly. So, you know, it's actually a product that has huge depth to it because of the beauty of New Zealand, the Southern Alps, fantastic story about an animal that's born in the mountain that creates products for people to return to the mountains. But that is actually in the background. It has to be a functional, high-quality product that people want in the first place.
PAUL Let's talk about the Taskforce, Jeremy. You were on the Taskforce for some time. The Taskforce on catching Australia paints a very gloomy picture this week. Do we need to catch Australia, actually, or is this a distraction?
JEREMY Uh, well, I haven't been on the Taskforce for a year. It's a great challenge. For me, it's actually a red herring because I'm not interested in catching Australia. You know, I thought it was really interesting the survey that came out where suddenly we're number three, up from number 19. I know the mechanism's changed a little bit, but really it is about quality of life. However, you've gotta balance that against 'how do we create high-paying jobs here?' Because if there is a brain drain, it's about people going offshore to chase opportunities.
PAUL This is the big challenge, isn't it? Get a good wage economy and also keeping our best and our brightest here. Do you know how to do it?
JEREMY Well, what I'm committed to is making Icebreaker a global business of scale. I think we can be a really big business one day and really compete on a global level, which is very different from making stuff here and selling a few products overseas. So in relation to your question, there's probably two ways of looking at it: how do you keep business here? And how do those businesses thrive to attract people? Because higher wages don't come from government; higher wages come from businesses. So if we take that first question, I actually think it's about ambition and intention. And I think it's okay for us in New Zealand to say we want to grow big-scale international competitive businesses, we want to win internationally. And that's about the aspiration of the owners and the people running the business.
PAUL It's a hell of an expensive undertaking for someone, starting out, getting a product out into the world.
JEREMY Oh, it is, but what's the matter with that? It should be expensive, it should be an investment, it should be challenging. That's the fun. Icebreaker's been grown on a $200,000 seed capital, and will actually hugely exceed that 120 million that you mentioned for this year. So you can do it with discipline and focus. But it is about having an ambition and sticking to it, and not selling to the first overseas company that waves a chequebook.
PAUL So what is one big, positive, good thing government can do to create that better-waged economy, to keep our best and brightest here, to get firms that can really stretch out offshore?
JEREMY Well, It's not up to government; it's up to New Zealanders. You know, we're really evolving as a community. People say 'What do you think about the tall poppy syndrome?' I don't see it; I think that's a conversation that's 10 years old. I think people are moving on, recognising that we're part of a global economy. We have so much that's special here, our tourism numbers are increasing every year, the relevance and the distinctiveness of New Zealand is only becoming more relevant and more distinctive, so what a fantastic place to live and to build a business from.
PAUL Well, and of course we have these tremendous green advantages; it's a country of great beauty. You're involved with a group of people advocating going the green way. Rob Fyfe's part of that, Geoff Ross, Lloyd Morrison, Rob Fenwick. What do you mean by that, going the green way?
JEREMY Well, your question before was about what the government needs to do, and we're concerned that there isn't enough around protection of our environment and incentives to create international businesses using clean tech and the fantastic green image and opportunity that we've got, building products that come from New Zealand. So we think that there's huge advantage for the country if the government could commit to a piece of thinking to come up with a framework which balances carrot and stick - some incentives to encourage businesses based on New Zealand's green credentials, and to disincentivise businesses which are hurting, or any behaviour which is hurting New Zealand's green reputation. I think it's outrageous that we've got polluted rivers in New Zealand. That, for me, is deeply shocking. And you know, we as a group think there's too much complacency. And some intention from the government can be long-term legacy-making stuff. We've got away with it till now, Paul, because there aren't many people here, but now the scrutiny and the level of connectedness globally is just so much deeper, we can't get away with the old behaviours.