COTTON INCORPORATED
6399 Weston Parkway, Cary, NC 27513 www.cottoninc.com

---

Organizations Filed Purposes: COTTON INCORPORATED, FUNDED BY U.S. GROWERS OF UPLAND COTTON AND IMPORTERS OF COTTON AND COTTON TEXTILE PRODUCTS, IS THE RESEARCH AND MARKETING COMPANY REPRESENTING UPLAND COTTON. THE PROGRAM IS DESIGNED AND OPERATED TO IMPROVE THE DEMAND FOR AND PROFITABILITY OF COTTON.

Consumer Marketing The Consumer Marketing program is comprised of the Consumer Marketing Division (Advertising, Public Relations and Strategic Alliances) and the Corporate Strategy and Program Metrics Division (CSPM). The Consumer Marketing Division is tasked with creating awareness of, and interest in, cotton among consumer and trade audiences. This is accomplished through an integrated platform of traditional and digital advertising, engagement with the media, and activities and events that directly contact consumers. In 2019, the Advertising Department at Cotton Incorporated continued with the second year of our "Life Is Uncomfortable" campaign, utilizing four video assets: Tattoo, Anchor, First Day, and Meme, targeting women and men 18 - 49. This 360 degree campaign reached consumers through TV, video streaming, and digital media, including social media and search engine marketing; driving qualified traffic to our consumer website, TheFabricofOurLives.com. The brand ad tracker measured campaign awareness and changes in cotton perception among the target audience. The results show that label checking for fabric content and the degree of influence fabric has on clothing purchase are higher among those who have seen First Day in particular, but overall, the campaign has high emotional connection and recognition. In addition to our above-the-line campaign, Advertising also ran a health and wellness-themed video campaign consisting of three videos: Skin Irritation, Underwear, and Sheets, as well as launched a competitive Know Your Clothes social media campaign, to build awareness, educate consumers, and promote the competitive advantages of cotton. During the second half of 2019, the Advertising Department launched a denim-focused video campaign to highlight the historical importance of denim and how authentic denim is made with cotton. The campaign reached consumers through digital and social media as well as through enhanced search engine marketing techniques. The department also completed production on a social media campaign focused on cotton farmer Wendy Yeager, to highlight the made-in-America aspect of cotton and call attention to the family farms that grow it. Finally, production began on the second phase of the Denim campaign: Rosie Reborn. The campaign will launch in the first quarter of 2020 and will continue to tell the story of denim's importance in our collective American history, by highlighting the stories of trailblazing women who will be dubbed "modern-day Rosiesunderscore the importance of cotton in authentic denim. The year concluded with research and creative development on a new video campaign which will debut in the second quarter of 2020. The Public Relations Department accomplishments for the 2019 year were activities in support of the sustainability of U.S. cotton, the Corporate Strategy & Program Metrics (CSPM) department and the promotion of the holiday shopping survey data; and consumer-facing corporate initiatives such as the Blue Jeans Go Green (TM) denim recycling program. The department secured coverage in atypical and desirable media outlets. Some were a result of an external firm, which provided support for consumer-facing media coverage of cotton and Cotton Incorporated, and some were achieved independently by the Public Relations Department. Among these were news items in Refinery29, Real Simple Online, Martha Stewart Living Online, etc. The Strategic Alliance Department began their year with an exciting new retail partnership for Strategic and Retail Partnerships along with collection and distribution activities for the Blue Jeans Go Green (TM) denim recycling program. In addition to Madewell and rag & bone collecting denim for recycling in stores nationwide, other retailers, individuals, and organizations across the country got involved as well throughout the year. Additionally, the Strategic Alliances team partnered with e-tailer, Revolve, for the first time, to plan and execute an integrated marketing campaign aiming to drive sales of cotton apparel as well as Amazon for the second year, and buybuy BABY for Seal of Cotton trademark promotions that occurred online and instore. CSPM led efforts to identify opportunities and threats for cotton using market intelligence gathered through ongoing studies of U.S. consumer attitudes from the Lifestyle Monitor (TM) survey, assessments of cotton's share at retail through the Retail Monitor (TM) research, and comprehensive global market and economic research and analysis. CSPM provided more than 240 information requests; participated in approximately 160 meetings and presentations; authored 268 publications, videos, TV/radio segments, and podcasts; and worked on more than 20 projects. Work completed by CSPM in 2019 includes, but is not limited to, the collection and examination of data on more than 130K products offered at retail in the U.S. and China; the evaluation of over 14K U.S. and 17K global consumers; the update of a comprehensive database of monthly apparel and home furnishing imports; the management and analysis of global quantitative research in China; the management of Cotton Incorporated's brand tracking metrics; and the delivery of consumer and economic outlook presentations.

Global Supply Chain Marketing (GSCM) The scope of the GSCM division covers a wide range of activities with manufacturers, retailers, brands, and trade organizations throughout the world. These activities are anchored in three important strategic objectives: build a global presence for cotton, promote product and technology ideas, and conduct education, training, and technical assistance through marketing programs that further the use of cotton in products. An important tactic for maintaining a global presence for cotton is through direct account interaction with mills, manufacturers, brands and retailers for the apparel, nonwovens and home product markets. GSCM staff focus their efforts on influencing major brands and retailers through coordination of various Company resources, with the goal of influencing the use of cotton versus other fibers. During the second half of 2019, GSCM staff conducted more than 400 meetings with companies in both the manufacturing supply chain and with key brand and retailer accounts. In its sixth year, the Cotton LEADS program continues to educate and inform retailers, brands, and manufacturers about responsible U.S. cotton production. Cotton Incorporated participates in this program with the National Cotton Council of America, the Cotton Foundation, Cotton Australia, and Cotton Council International. In 2019, 32 new partners joined the program, thus reaching a total of 592 partnering manufacturers, brands and retailers. During the second half of the year, Mexico City staff added two more Cotton LEADS members and also supported two members, one Peruvian, one Mexican, to design and launch their respective Business to Business (B2B) Cotton LEADS membership campaigns by labeling their eco-line products made with U.S. cotton. Forty-four technical education workshops were held in 2019 with over 1,271 attendees. These individuals were from 128 major brands and retailers. The purpose of these workshops was to provide detailed technical information and training on relevant topics important for cotton. The GSCM division continued to develop the CottonWorks (TM) website, a marketing tool and educational resource (www.cottonworks.com). It is the leading innovative education and information resource for current and emerging textile industry professionals who are actively seeking connections to cotton. In 2019, Cotton Incorporated added two new nonwovens courses and new content on cotton biodegradability. Additionally, cotton fabrics from Cotton Incorporated's FABRICAST (TM) collection were digitized and added to the updated FABRICAST (TM) collection page, bringing the total number of digitally searchable fabrics to 1,027. Two new brochures were added: microfiber biodegradability in aquatic environments and NATURAL STRETCH (TM) technology. Staff also implemented a new resource on the site to learn more about cotton production terms. In 2019, there were 32,108 registered users, 183,479 sessions, and 1,028,067 page views. The GSCM division is responsible for coordinating messaging to the trade. In 2019, consistent messaging and imagery was implemented throughout, including tradeshows, tradeshow promotional items and outlets, and other publications. New messaging was created for 2019 placement to highlight "the circular economycombination technologies. Trade advertisements were placed in industry publications, in print and digitally. A new campaign highlighting the improvements in sustainability, innovation, and technology was developed for the 2020 year. Several brands and retailers that have adopted multiple cotton technologies in 2019 have expanded the product offering into other categories. A significant U.S. online retailer is continuing their STORM COTTON (TM) and STORM DENIM (TM) technologies for men's and women's apparel. Several competing retailers have adopted the TOUGH COTTON (TM) technology on girls' leggings. A large children's brand has adopted the TransDRY (R) technology on a cloth diaper that will be sold through multiple large retail stores and online. A women's sportswear brand has adopted the TransDRY (R) technology on a performance tank top. An online retailer has adopted TransDRY (R) technology on ladies' performance underwear. The GSCM Nonwovens Marketing team successfully completed new license agreements in the following countries: Belgium, Canada, China, Colombia, France, Germany, Indonesia, Korea, Spain, South Africa, Switzerland, Ukraine, United Arab Emirates, UK and the U.S. The product markets included: nonwoven roll goods; feminine hygiene tampons, pads and liners; wipes and skin care masks; air filtration masks; baby diapers; and adult care pads. Trademarks included: Seal of Cotton, natural (TM), enhanced (TM), and Cotton LEADS Product markets expanding the use of cotton in the second half of 2019 included, global nonwovens roll goods, feminine hygiene, wipes, baby care, skin care, air filtration masks, baby diapers, adult care pads and hospital cleansing gloves.

Research and Development Research and Development is comprised of the Fiber Competition division and the Product Development and Implementation division. Fiber Competition had twelve outside research projects for 2019 with the renewal of seven projects and the initiation of five new projects. The top priority for 2019 was dealing with contamination issues. The other key priority was the Fiber of the Future effort, which involves improving fiber length uniformity and fineness. Product Evaluation Laboratory (PEL) activities continued to focus on normal day-to-day testing. Routine testing on two high volume instrument (HVI) inter-lab evaluations involved twelve proficiency sets, and the lab also provided testing for the USDA-AMS on ten sets of calibration cotton using both HVI models. A total of nine proficiency tests for fabric and one proficiency test for yarn was also run during the year. Testing services were active for all areas of research and implementation for both Agricultural and Environmental Research and Product Development and Implementation divisions. The lab is continuing to learn and tweak the new version of LogBook software, a specialized system used by the PEL for all data collection and reporting to meet the lab's specific needs. The Cotton Management System (CMS) Product Development team continues to support MILLNet (TM) software products, with the primary focus on updates and enhancements for the latest version. The latest version of MILLNet (TM) software is being used for all new licensee installations. All but two existing users have been converted to the latest version with plans to convert the final two in early 2020. The CMS Technical Service and Marketing teams assisted customers 3,135 times by phone, e-mail, text, face-to-face and the Internet. Yearly service visits were completed for licensees located in Canada, China, Colombia, El Salvador, Guatemala, Honduras, Korea, Mexico, Nicaragua, Peru, Philippines, Thailand, the U.S. and Vietnam. Marketing visits were made to prospective clients in Colombia, El Salvador, Guatemala, Indonesia, Korea, Mexico, Peru, the U.S. and Vietnam. Three new MILLNet (TM) software licenses were signed and installed. The Product Development and Implementation (PDI) Division has accomplished many achievements within the top-three strategies set forth in 2019: Contamination, Sustainability and Innovation. To address contamination, a cotton twine sample was developed, and tests were identified to evaluate baseline performance of current cotton wrap material. In addition, a large contamination trial was completed in Germany in coordination with the equipment manufacturer and industry partners. The new detection technology removes and quantifies debris found at the mill level during processing. A completed technical report then compared current contamination detection and removal technologies with the advanced technologies used during the Germany trial. As traceability has risen to the forefront of the cotton industry, PDI provided technical support to Cotton Council International (CCI) to investigate Oritain's Traceability Technology by processing upland cotton, from two different states, to produce yarn and fabric samples for evaluation. In the area of sustainability, the microfiber biodegradation project examined the impact of dyes and finishes on cotton's ability to degrade in aquatic environments. An effort to transform waste cotton into chemical intermediaries was achieved with the cotton-to-sugar project. The project realized significant process improvements, whereby chemicals and energy were reduced without sacrificing efficiency. Two outside research projects, saw promising results, examined methods transforming waste cotton into high value materials, such as nanocellulose and carbon fiber. Synthetic fleece-alternative fabrics, of cotton and wool, continued to be a highlight, as were 100% cotton thermal knits. A focus on sustainability was maintained in bottom-weight offerings, further reducing waste in selvedge denim, through reducing chemical inputs of dyeing through catatonically treated woven fabrics and in mechanical fabric finishing. Lasers were also used reducing chemical inputs by creating a variation on traditionally corduroy concepts. The Life Cycle Analysis (LCA) was expanded to include Ultra Touch (TM) denim insulation, evaluating how it compares to the traditional fiberglass product. Product Development and Implementation continues to develop innovative products. Novel yarns were developed using newly purchased AgTek Multi-function winders. The novelty yarns were then used in FABRICAST (TM) collections, enhancing the design's aesthetic through embroidery. Developments were also initiated using the new Muratec III 870 Vortex Spinner (MVS), obtained in 2018. In an effort for MVS yarn to better compete with ring spun yarn, research trials focused on improving strength and softness of the yarns. Multiple nonwoven prototypes were developed with a wide range of forming and bonding technologies using recycled or reclaimed cotton. Five FABRICAST (TM) collections were released this year focusing on sustainability, performance, and activewear. This included fiber selection, construction, and finish application. Different blends and blend levels were developed to produce lighter weights with a reduced absorbent capacity. Rounding out the collection were fabrics with dual-finish technologies, fabrics with unique surface design, fabrics with conductive yarns for e-textiles, and even prototypes for shoe uppers. New technologies continue to be released by PDI. A new Sweat Hiding (TM) technology, for lightweight woven fabrics, was launched enabling materials, such as dress shirts, to absorb water but not appear wet on the surface. Another new development, labeled QuickDRY (TM) technology, was run on 100% cotton sheeting in partnership with a U.S. mill, with the aim of reducing energy in the consumer-use phase. This non-formaldehyde flame retardant technology is still under development and new chemistries are being evaluated. Two dual-technology finishes were introduced through the FABRICAST (TM) collection at the Outdoor Retailer (OR) show in August. Fabrics treated with TransDRY + TOUGH COTTON (TM) technology and STORM COTTON (TM) + TOUGH COTTON (TM) technology were the first requested by several retailers. Work continues to increase cotton fiber in 3D printing and injection molding. By increasing the cotton fiber content in molding technologies, the performance can be enhanced while displacing synthetics. After receiving a notice of allowance, the PUREPRESS (TM) technology patent has moved forward. Strong interest has developed around PUREPRESS (TM) technology over the course of 2019, with six-mills becoming suppliers running 13-separate trials. One supplier increased its production to include 34-styles treated with PUREPRESS (TM) technology. The TOUGH COTTON (TM) technology continues to be implemented by major brands as well. With interest from additional mills in the U.S. and Asia to become suppliers. The implementation of STORM COTTON (TM) technology continues, but with emphasis on a non-fluorine formula. With the assistance of the Product Evaluation Lab (PEL), a total of 317 projects with over 900 samples were processed for technology licensing. This was in addition to technical service, analytical work, internal research, and support for fabric development. In June, PDI traveled to Barcelona, Spain, attending the International Textile Machinery Association (ITMA) Show which occurs every four years. The team focused on new technologies surrounding cotton development in spinning, contamination detection, knitting & weaving, dyeing & finishing, printing, sustainability and emerging technologies. Six reports were prepared to share PDI's insights within Cotton Incorporated and the cotton industry. Various activities were done to amplify cotton's research in the LCA, such as participating in industry meetings, presenting at several international conferences, as well as authoring a position paper on LCA implementation. Product Integrity participated in an international standards organization (ISO) conference contributing to work screening for GMOs in textiles, advancing the consumer-facing dashboard used for the Higg Index, and chairing numerous committees and working groups within both SAC, AATCC, and ANSI organizations throughout the year. In addition, the results of a non-formaldehyde finish development were presented at an international conference.

---

---

Data for this page was sourced from XML published by IRS (public 990 form dataset) from: https://s3.amazonaws.com/irs-form-990/202002539349300815_public.xml