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Articles by Alpaca World Magazine:

ALPACA OWNERSHIP IN NEW ZEALAND: AN EXPLORATORY STUDY

Abel Alonso – Wellington Institute of Technology (

Alpaca owners in New Zealand turn out to be bright, most have university degrees, work or have worked in the professions, and are middle aged, the average age of those sampled was 53. Why do they do it? Most say that a change of lifestyle, followed by breeding or owning alpacas as a hobby, using available land and a passion for the alpaca industry were their main motives.

Introduction
A number of sources, including the Ministry of Agriculture and Forestry (MAF, 2001), Johnson (2002), or the Alpaca Association New Zealand (2006) provide extensive information, suggestions and recommendations about different areas of Alpaca ownership, breeding, and marketing. However, despite the growth in interest of this area, the amount of published information about Alpaca ownership/entrepreneurship in New Zealand, especially from an operators’ points of view, is rather limited. The main objective of this study is to explore this dimension and provide an alternative point of view about the present state of this up-and-coming activity. Different databases, magazines, and newspaper articles helped identify a total of 590 Alpaca owners nationwide. These individuals were contacted by mail and invited to participate in the study by completing a questionnaire that was attached to the invitation letter. A total of 225 (38.1%) usable responses were received until the end of June 2006.

While it is acknowledged that a number of those who participated in this study might actually not be Alpaca entrepreneurs, or may only own or breed Alpacas as a hobby and for non-commercial purposes, other owners expressed a clear commercial motive as their reason for having their operations. For simplicity purposes, the terms ‘Alpaca operation(s)’ and ‘Alpaca operator(s)’ will be used throughout this summary to illustrate Alpaca farms / businesses, and Alpaca owners, respectively. In addition, it should be noted that due to missing or incomplete answers, some numbers and / or percentages in tables might not add up to the total figures of 225 or 100% or responses.

The study
A first area in the questionnaire investigated the location of Alpaca operations. Most responses, 134 or 59.6%, were obtained from North Island operators, and 91 (40.4%) from the South Island. These figures appear to be representative of the approximate distribution of Alpaca operations identified prior to mailing the questionnaires, namely 59% of the total number in the North Island and 41% in the South. However, it must be noted that other existing Alpaca owners, including those that do not advertise their operations, or do not belong to the Alpaca Association New Zealand, may not have been identified in this research. Therefore, representativeness issues are treated with caution in this study.

Almost half of the operations, 106 (47.1%) were started in the last three years, while 66 (29.3%) have been operating between four and six years, and the remaining 44 (19.6%) seven or more years.

When respondents were asked about the number of Alpacas they own, it was noticed that numbers ranged from as low as two to over 200 per operation. A decision was made to separate the operations into four distinct groups, and by doing so it was found that 100 (44.4%) operators own between ten or fewer Alpacas, 51 (22.7%) between 11 and 20, 44 (19.6%) between 21 and 40, and 29 (12.9%) more than 40.

This range in the number of Alpacas owned suggests different motivations among operators. Further, it could be argued that those operations with fewer Alpacas, namely 10 or fewer, may not seek commercial benefits, including not being open to the public, but rather have Alpacas purely as a hobby. Further analysis supported this assumption. For example, while 89 (39.6%) operations were open to the public, it was also noticed that only 21 (23.9%) operations with 10 or fewer Alpacas were open to the public. In contrast, 79 or 59.8% of those with more than 10 Alpacas were open to the public. Clearly, obtaining a commercial benefit from the Alpacas might be among the primary motives for opening to the public. This could take the form of having Alpacas as a tourist attraction, by selling Alpacas or Alpaca-related products, or even by having Alpacas in combination with other attractions, including the provision of hospitality facilities. However, the structure of the questionnaire did not allow for confirming whether these commercial aspects were the rule in those operations open to the public.

Only 39 (16.7%) respondents indicated having either full- or part-time employees in their operations. Further, 15 (15%) of the 100 operations with 10 or fewer Alpacas had employees, and 24 (19.4%) of the 124 operations that had over 10 Alpacas also indicated having employees. The fact that an almost equal percentage of operations do need staff regardless of their number of Alpacas suggests that the size of the Alpaca operation is not related to owners’ need for staff. Operations that hired staff indicated having between one and two full-time and between one and six part-time employees.

Different ownership structures among Alpaca operators were also investigated. Table 1 shows that the large majority of respondents (215 or 95.6%) had started their operations from scratch, followed by those who indicated that their operation was family-based.


Table 1: Business or Alpaca ownership (more than one item may apply).

Item Number of
Respondents (n) %
I started my business from scratch 215 95.6
This business belongs to both myself and my family (family ownership) 170 75.6
I have an additional occupation 150 66.7
This business is an extension of another farming activity 67 29.8
This business belongs to myself only (single ownership) 32 14.2
This business is owned by other than myself 9 4.0
This business belongs to myself and other non-family business partners 6 2.7
My business already existed before I purchased it 2 0.9
I inherited this business 0 0.0

Note: More than one answer possible.


A total of 150 (66.7%) respondents have an additional occupation and 67 (30%) have their Alpacas as an extension of another farming activity. These findings suggest that overall Alpaca ownership is rather a marginal activity for most respondents. This was further supported when owners were asked about their reason for becoming involved in Alpaca ownership. A scale was used to explore respondents’ level of importance regarding the items shown in Table 2, where a one represented ‘totally unimportant’ and a five ‘totally important’. The responses indicate that a change of lifestyle, followed by breeding or owning Alpacas as a hobby, to use available land, and passion for the Alpaca industry were respondents’ main motives for starting the Alpaca operation.

The average number of hours worked by respondents in the different seasons, namely 14.9 in spring, 15 in the summer, 14 in autumn and 12.2 in winter further suggests that for many Alpaca ownership may still be far from becoming a full-time activity, or a very serious commitment other than owning Alpacas for leisure purposes. Additional space was available in the questionnaire for respondents to add comments about other reasons for being involved in Alpaca ownership. A total of 23 (10.2%) respondents indicated that they became Alpaca owners to have these animals as pets, as a retirement occupation, or as a lifestyle block, while for 14 respondents (6.2%) producing fibre or fleece for personal enjoyment was their main motivation for owning Alpacas.
Table 2: Reasons for becoming involved in Alpaca breeding / ownership.

Reason for becoming involved n * Low
End %
** n Medium/
Neutral % *** n High
End %
****
Change of lifestyle 20 8.9 36 16.0 138 61.3
Breeding Alpacas as a hobby 34 15.1 33 14.7 127 56.4
To use available land 40 17.8 26 11.6 126 56.0
Passion for the Alpaca breeding industry 35 15.6 48 21.3 120 53.3
To make money 58 25.8 62 27.6 82 36.4
To diversify an existing farming activity 41 18.2 30 13.3 65 28.9
To be independent (to be 'my own boss') 69 30.7 24 10.7 65 28.9
To have steady employment 95 42.2 22 9.8 24 10.7

* Number of respondents. ** Lower end of scale: 1-2, Medium/neutral: 3, High end of scale: 4-5. Note:
Using a scale, where 1= totally unimportant, and 5= totally important.


However, 82 respondents (36.4%) started their operation as an opportunity to make money, 65 (28.9%) saw the potential to develop their operation into a business, and 24 (10.7%) believed in the prospect of full employment in the Alpaca industry. This demonstrates that many owners are either already commercially involved in Alpaca ownership / entrepreneurship, or believe in the commercial potential of this activity. An additional 12 (5.3%) operators indicated their intention to benefit from their Alpacas commercially, including their plans to open their operation to visitors, market Alpaca fibre, and to increase their Alpaca numbers, while nine (4%) indicated that they were already producing fibre for commercial purposes.

When investigating the different occupations of operators, the predominance of professional careers was noticed, with education (25 or 11.1%), farming (22 or 9.8%), medical and management (21 or 9.3% each), and engineering (15 or 6.7%) as the most frequently indicated. Operators’ ages were also investigated. The largest group was composed of individuals between 51 and 60 years old (75 or 33.3%), followed by 59 (26.2%) of ages between 41 and 50 years old. The mean age of respondents was 53 years.

A clear difference was noticed in the gender composition of respondents, with females (107 or 47.6%) predominating over males (79 or 35.1%). A third group emerged as 37 (16.4%) respondents indicated that their Alpaca operation was owned both by a male and a female.

Regarding their level of education, the majority of operators, 159 (70.7%) completed primary or secondary school education, followed by 115 (51.1%) who had completed some university, polytechnic or ‘other tertiary’ education. A total of 91 (40.4%) respondents had completed Alpaca breeding courses or training, demonstrating a further level of commitment to this activity. Finally, an almost equal number of respondents completed a postgraduate (41 or 18.2%) and an undergraduate degree (40 or 17.8%).

Another area in the questionnaire investigated operators’ level of awareness at the outset of starting their operations regarding a number of issues. Moreover, these issues could potentially affect the development of their Alpaca operations. Table 3 indicates that more than half of respondents, 61.3% (58.2%), were well aware of financial and work requirements when they first purchased their Alpacas. Respondents’ level of awareness was also high regarding the need for a long-term business plan, as well as regarding ‘the knowledge required about the Alpaca industry.’ However, 55 (24.4%) operators were also unaware of this aspect at the outset of developing their Alpaca operations, and 83 (36.9%) were unaware of the knowledge required to market their Alpacas or related products.


Table 3: Level of awareness regarding developmental issues before starting Alpaca operation.

Area n * Low
End %
** n Medium/
Neutral % *** n High
End %
****
The financial requirements to develop business 38 16.9 40 17.8 138 61.3
The work required to develop business 28 12.4 56 24.9 131 58.2
The need for a long-term business plan 42 18.7 45 20.0 114 50.7
The knowledge required about the Alpaca industry 55 24.4 48 21.3 113 50.2
The knowledge required about marketing Alpacas or related products 83 36.9 56 24.9 76 33.8
The time required to develop Alpaca business 35 15.6 51 22.7 128 23.8

* Number of respondents. ** Lower end of scale: 1-2, *** Medium/neutral: 3, **** High end of scale: 4-5. Note:
Using a scale, where 1= totally unaware, and 5= totally aware.


Operators were also asked about areas where they might need external advice. Table 4 shows that Alpaca breeding appeared to be the main concern for the largest group of respondents (83 or 36.9%). Attracting skilled staff for the Alpaca operations (50 or 22.2%), and accounting (49, 21.8%) were two additional areas with almost identical numbers of operators seeking external advice. Further, the marketing of the Alpacas or their related products appeared to be of some concern for 51 (22.7%) respondents, and a real concern for 32 (14.2%). In contrast, the tourism side in the form of attracting visitors did not appear to be an area where external advice was needed, with only 17 (7.6%) of respondents indicating this. Similarly, the diversifying of the Alpaca operation, with 22 (9.8%) did not appear to be an area of major concern.


Table 4: Areas of external advice.

Areas n * Low
End %
** n Medium/
Neutral % *** n High
End %
****
Alpaca breeding 59 26.2 67 29.8 83 36.9
Attracting skilled staff for current Alpaca operations 68 30.2 33 14.7 50 22.2
Accounting 102 45.3 43 19.1 49 21.8
Marketing Alpacas / Alpaca related products 121 53.8 51 22.7 32 14.2
Diversifying of the Alpaca business 124 55.1 29 12.9 22 9.8
Attracting visitors / customers 107 47.6 33 14.7 17 7.6


* Number of respondents. ** Lower end of scale: 1-2, *** Medium/neutral: 3, **** High end of scale: 4-5. Note
Using a scale, where 1= extremely low, and 5= extremely high.


When asked about potential challenges their operations face, Table 5 shows three major areas of concern. For 123 (57.3%) owners, the marketing of their Alpacas or their related products is the main challenge faced. Quality issues are a concern for almost half of the respondents (112 or 49.8%), followed by 103 (45.8%) for whom gaining recognition for the quality of their Alpacas is also an area of concern. Further, for 34 (42.5%) operators who own ten or fewer Alpacas, ‘not enough numbers of Alpacas’ presents a challenge, but only for 31 (27.2%) of those who own eleven or more Alpacas. No clear differences were reported in all other cases between these two groups of Alpaca owners and challenges they faced. Thus it appears that the number of Alpacas, whether larger or smaller than ten animals is not a factor regarding the challenges faced by operators. However, additional comments from six respondents clearly suggest that the marketing of Alpaca fibre is a major challenge. Moreover, these respondents expressed their concern about the challenge of finding outlets for the increasing volumes of fibre they produce. Comments from these and from other 12 operators who are already involved in producing their own fibre and fleeces suggest that this area may become more of an issue, especially if the number of operators involved in these areas, and seeking some returns from their investments, increases.


Table 5: Level of challenge faced by respondents in their Alpaca operations.

Challenges faced n * Low
End %
** n Medium/
Neutral % *** n High
End
%
****
The marketing of my Alpacas / Alpaca related products 26 11.6 47 20.9 129 57.3
Achieving high quality (e.g., of Alpaca breeds) 32 14.2 61 27.1 112 49.8
Gaining more recognition for the quality of my Alpaca breeds 35 15.6 48 21.3 103 45.8
Not enough numbers of Alpacas 73 32.4 56 24.9 66 29.3
Lack of visitors / customers 67 29.8 40 17.8 38 16.9
Lack of visitor facilities 70 31.1 34 15.1 34 15.1
Local authorities' rules 93 41.3 19 8.4 22 9.8
Attracting skilled staff for current Alpaca operations 90 40.0 33 14.7 15 6.7

* Number of respondents. ** Lower end of scale: 1-2, *** Medium/neutral: 3, **** High end of scale: 4-5. Note:
Using a scale, where 1= no challenge, and 5= extremely challenging.


Regarding their overall satisfaction with their Alpaca operations, 139 (61.8%) respondents indicated being between satisfied and totally satisfied, while only 14 (6.2%) were between unsatisfied and totally unsatisfied, and 63 (28.0%) were neutral, or neither satisfied nor unsatisfied.

When asked whether they planned to grow their Alpaca operations in the future, the majority of operators (167 or 74.2%) clearly had a desire to do so, while only 24 (10.7%) did not plan to grow, and 31 (13.8%) were not sure. Similar results were obtained when operators were asked whether they saw themselves in the Alpaca industry in the next five to ten years. A total of 177 (78.7%) indicated their intention to continue, 14 (6.2%) did not see themselves in this industry within the next five to ten years, and 32 (14.2%) were not sure. Finally, regarding succession of the Alpaca operation, namely, by passing the operation on to another family member, only 38 (16.9%) planned to do so, 80 (35.6%) did not, and 82 (36.4%) were not sure. Obviously, succession issues may be influenced by several factors, including but not limited to children’s lack of interest, time, lack of resources to become involved in the Alpaca industry, or even the lack of children.

Conclusion
This summary presented the overall results of an exploratory study conducted among New Zealand Alpaca operators. The findings suggest several implications for a number of operations, particularly for those that see the commercial potential of Alpaca ownership / entrepreneurship.

The limited number of studies conducted on Alpaca ownership from owners’ points of view in New Zealand suggests the merit of further exploring this dimension in the future. For example, the number of respondents expressing their concern about the marketing of Alpaca related products, including fibre / fleece obtained from the Alpacas point at some issues that need to be further studied or addressed in future research. These investigations could provide operators and the industry with more information and might increase the level of awareness about potential future opportunities and challenges in this activity. Additional research could investigate operators’ involvement with the tourism / hospitality industry by means of opening their operations to visitors in different forms, including Alpaca tours in combination with food or accommodation.


Final note
Abel Alonso expresses his appreciation to all New Zealand Alpaca owners who very generously participated in this study. He can be contacted on Abel.Alonso@weltec.ac.nz


References
Alpaca Association New Zealand Inc. (2006). The Alpaca Association New Zealand’s home page.
Retrieved January 15th 2006 from http://www.alpaca.org.nz/member-directory.htm

Johnson, K. (2002). The New Zealand Alpaca industry. Retrieved July 20th from
http://exoticpets.about.com/library/ucnzalpacas.htm

MAF (2001). Appendix 3: Example information for industry participants - The Alpaca industry.
Retrieved March 12th 2006 from http://www.maf.govt.nz/mafnet/rural-nz/profitability-and
-economics/emerging-industries/information-barriers/information-barriers10.htm