The future of wool in New Zealand: A natural comeback

A fibre with a bright new horizon

New Zealand’s wool industry has experienced sharp decline in recent decades, with sheep numbers halving since the 1980s due to dairy expansion and competition from synthetic materials. However, a combination of shifting climate suitability, government policy, and consumer demand for sustainable materials has created the ideal conditions for strong wool’s resurgence.

Government backs wool: Mandatory use in public buildings

In a significant policy shift, the New Zealand Government has announced that from 1 July 2025, all government departments and agencies must use wool-based products—such as insulation, carpet, upholstery, and acoustic panels—in new buildings over $9 million and refurbishments over $100,000.

This new procurement policy is expected to double domestic wool demand to approximately 30,000 tonnes annually.

Economic Growth and Finance Minister Nicola Willis explained the decision:

This policy forms part of the coalition agreement between the National Party and New Zealand First, and it is already prompting investment and innovation across the wool supply chain.

What it means for farmers and the wool supply chain

Increased demand: Government-led procurement will create immediate and sustained demand for strong wool, particularly for interior and insulation applications.

Innovation incentive: The need for high-performance wool-based building products is accelerating product development across the construction and manufacturing sectors.

Private sector momentum: With government setting the standard, commercial and residential developers are expected to follow, leading to increased domestic consumption of wool.

Environmental, health and performance benefits

Wool is not just sustainable—it’s practical. It offers a range of advantages over synthetic alternatives:

• Naturally regulates indoor temperature and humidity

• Absorbs pollutants and volatile organic compounds (VOCs)

• Improves indoor air quality

• Acts as a natural fire retardant and acoustic insulator

• Is biodegradable, renewable, and non-toxic

These properties make wool a preferred option for sustainable building design.

Challenges for the industry

To maximise the benefits of this renewed focus on wool, the sector must address key challenges:

• Processing capacity: Domestic scouring and manufacturing infrastructure needs to expand to meet new demand.

• Fibre quality: Farmers must maintain high standards of fibre strength, length, and cleanliness to meet construction and export specifications.

• Supply chain coordination: Breeders, growers, processors, manufacturers, and construction firms need to align operations and scale production efficiently.

How GrowPay supports the wool revival

GrowPay is committed to supporting farmers and agribusinesses leading the wool resurgence. We provide:

• Infrastructure finance: Capital for upgrading shearing sheds, wool stores and handling systems.

• Breeding and technology investment: Support for genetics, traceability, and fibre quality improvement technologies.

• Value-added project support: Funding for onshore processing, product innovation, and go-to-market strategies.

• Collaborative development: Partnerships with industry groups, research bodies, and manufacturers to enable supply chain transformation.

A stronger future starts now

With the right investment and support, wool can once again become a cornerstone of New Zealand’s rural economy—offering both economic and environmental value. Government policy is only the beginning. GrowPay is here to help farmers and innovators lead the way.

Talk to GrowPay about funding your wool enterprise.Visit www.growpay.co.nz or contact our team to get started.