The New Zealand Merino Company, which markets the nation's wool to customers on behalf of suppliers, has inked an $8 million one-year deal to supply 600 tonnes of New Zealand fine and medium micron wool to US sock and apparel manufacturer SmartWool.

NZ Merino aims to boost sheep grower returns from wool through supply agreements with companies such as New Zealand outdoor clothing brand Icebreaker and Danish slipper manufacturer Glerups. The SmartWool supply contract continues an 18-year partnership which has been worth $150 million to NZ Merino growers.

"The SmartWool contract is testament that a new way of doing business can work in our commodity-based primary sector," NZ Merino chief executive John Brakenridge said in a statement. "There certainly seems to be heightened awareness of this model now in the primary sector. It brings producers closer to end-users and that's important in making sure we supply a premium offering. It means NZM growers get the best possible return."

Colorado-based SmartWool's parent company, VF Corp, counts The North Face, Timberland and Vans among its global brands. SmartWool started as a ski sock brand in 1994 and has since diversified into performance and lifestyle apparel, selling products in 40 countries.

SmartWool's customers were increasingly interested in the company's 'brand story', particularly fibre that was accredited through NZ Merino's ZQ programme which requires standards for animal welfare, environmental care and social sustainability, as well as the high quality of the wool, said SmartWool president Mark Satkiewicz.

The company's focus on new product innovation required more complex fibre micron and volume analysis in advance of the contract, Satkiewicz said.