With flash offices, flash advertising and flash management, it seemed inevitable that the tiny Marlborough beer-maker, Moa, would be a flash investment when went it public last year. But just last month, after announcing it had blown this year’s sales target and watching its share price plummet, Moa had some wondering if it’s just another flash in the pan. Greg Dixon finds out what’s up with the country’s cheekiest beer boys

The Moa offices certainly don't smell like a brewery. As I was sitting waiting for audiences with Moa's founder Josh Scott and its chief executive, Geoff Ross, I am overwhelmed by floral notes, woody aromas and hints of honeysuckle. If I'm honest, it doesn't smell very bloody manly and, if Moa's brand stands for anything, it stands for being bloody manly. In fact, if I were to be a bit cheeky - and if Moa's brand stands for anything, it's for being a bit cheeky, so they won't mind - I'd say Moa HQ is redolent of a tart's windowbox.

Am I in the right place? Well, yes. Moa's name is above the buzzer on the security-controlled door, the stairs to this first-floor foyer where I'm sitting are lined with framed awards for Moa's beer and there are copies of Moa's initial public offering (IPO) statement sitting on a cabinet.

The smell, I determine, once I've dragged my eyes away from the enormous, possibly gauche, green glass chandelier that dominates the foyer (it sits above a bust wearing a Soviet-style fur hat, complete with little red star, and a stuffed alligator), is coming from all the scented candles and skin products filling the the shelves around me. They are made by one of Ross' other businesses, Ecoya.

If the unmanly bouquet is a bit of a surprise, it isn't that Moa has flash offices in a heritage building on Auckland's Quay St, with polished wooden floors, high studs, quirky decor and harbour views. If Moa is about anything, it's about being a bit flash, a bit exclusive, a bit Auckland. Unfortunately for Moa, in the last few weeks it's taken a bit of a manly kick to its fashionable cojones. After realising it wasn't going to sell as much beer as it said it would in its first year as a public company - actually 30 per cent less - Moa warned the stockmarket things weren't as rosy as promised and then watched its share price drop 26 per cent by end of trading that same day. Not too flash, then. No wonder there were a few pointed questions at Moa's annual general meeting just days later.


Could the moa be the first creature in history to be declared extinct twice?

If Ross, who made his fortune creating, then selling, the 42 Below vodka brand is worried, he's not letting on. He leads me into his small office (where, for some reason, there is a stuffed stag's head sitting on a chair, looking out a window), takes a seat and starts making soothing sounds about Moa's "stumble", with a few mea culpas too.

Dressed in designer jeans and a crisply ironed black shirt unbuttoned a little low and with a head as bald as an egg, the gentlemanly Ross smiles slightly when I ask about his mood.

"Look we're still pretty ... um ... well, pretty confident and upbeat. Just to explain what happened: Moa is growing year on year and this year we're going to continue growing. ... whilst we're still in high growth - by anyone's standards we're still in high growth - it is not going to be as high as we thought. As soon as you know or think that might happen [that sales won't meet forecast], you're obliged to tell the market. So we had to tell the market once we knew that. We took a kicking for it - and kind of fair enough."

Well it wouldn't be the first time.

So what do you think of Moa? You must have an opinion, everyone seems to. When I mentioned to people I was preparing a story on Moa, I was surprised by the level of negativity. There are people who really don't like Moa. Not Moa's beer - most who have tried their brews love the stuff - no, what they don't seem to like is the brand. Few craft beer-makers in New Zealand advertise, let alone have a marketing manager. Moa does, it also talks about things like "segmentation", target markets and brand loyalty. According to its windy IPO statement, "Moa has a highly differentiated culture ... [which] allows the target market of affluent leaders and aspiring influencers to engage with the brand and form a loyal connection". The company's stated aim is to be the beer brand synonymous with New Zealand. "My goal," the 46-year-old Ross tells me, "is creating an iconic New Zealand brand."

This is heady stuff, headier than Moa's Imperial Stout, which is a stonking 10.2 per cent.

Yet it is this duality - that Moa is both a respected beer range as well as a brand wanting to take on the world - which makes it so different from other local makers of craft beer.


This is at the heart of a certain half-heartedness that some of the more chin-scratching craft drinkers have about Moa. From the chin-scratchers' point of view, one of these things - Moa - is not like the others: the nearly 60 other local craft breweries. In fact, critics think, Moa probably has more in common with the big two breweries, Lion and DB.

"That's Moa for me," Wellington beer writer Hadyn Green tells me, "they're Steinlager with a Tui attitude."

This is a pretty mild bollocking. The real animus reached its apogee last year with the release of Moa's self-consciously slick investor statement in the run-up to the IPO.

Featuring lots of Mad Men-style black and white photos of the board and management team, it also included paid advertisements for Aston Martin and Beretta. However, it was the shots of leggy young women that got one or two self-appointed guardians of craft beer really worked up. Wellington beer blogger Phil Cook railed in an amusingly angry post that the IPO statement simply added to Moa's "'impressive' record of homophobia, misogyny and tired marketing blather". All that was missing was accusations of crimes against humanity.

Moa's branding - or to quote the colourful Cook, "brandwank" - isn't the only difference, of course. Another is that Moa beer began life not as a chin-scratcher's homebrew made in, say, a garage in Wellington's Aro Valley, but in a Marlborough vineyard.

Josh Scott, the affable, rugby-playing son of successful Marlborough winemaker Allan Scott, made his first Moa brew three days before Christmas in 2003 on a weekend his father was away. Only he wasn't away - and wasn't best pleased when he found his son secretly brewing beer in the winery.


"He came in and went nuts at me," Scott said recently. "[My parents] thought beer was a bit lowbrow."

Scott had discovered - like so many who travel overseas - that, unlike here, in other parts of the world they made beer with flavour. At just 15, he'd gone to France for two years, followed by another two in America, to learn winemaking, but also picked up a taste for small local beers along the way.

"I had that 'eureka' moment," he tells me. "It's funny. I'm not a wine snob but I am quite picky, ever since a young age. I've never drunk wine out of a bladder, just because my parents pooh-poohed it. With the beer, it was the same. I wanted to get something different. It's all about educating your palate and the more you drink, the more comfortable you get with different beer styles."

He began "tinkering in the shed", ultimately applying his wine-making knowledge and techniques to beer and, at the age of 22, figured he'd like to brew commercially. Again his parents pooh-poohed. "They were totally against, said it was a crazy idea, 'no one is going to buy beer that is that expensive'. It wasn't until I started selling it and getting momentum that they started to sort of see it."

Still, the cashflow from the winery was propping up Moa as it grew and, when the extra cash dried up in 2008 - because the wine industry was hit by a glut - Scott went looking for an investor. He eventually found Ross who, along with his ex-42 Below founders Grant Baker and Stephen Sinclair (they invest through a business called The Bakery) were looking for investments after selling 42 Below to Bacardi in 2006 for $138 million. They have "partnered" Scott since late-2010.

Since then, Scott, now 32, has become "executive brewer" and moved to Auckland. The beer is still brewed in Marlborough, but Moa's head brewer is now the well-respected David Nicholls. These days the rough division of labour, Ross tells me, is he does brand, Scott does beer.


"Geoff is definitely more about brand," Scott confirms. "My role is mainly education - getting out there and talking to customers, helping with sales, liaising with the brewery, talking about different styles and trends, because picking trends is big."

Especially if want to take your beer to the world.

It's a cliche but what a difference a year makes. This time last year, claims of sexism aside, Moa was a media and market darling. Under the new management of Ross and co, the company had seen sales volume grow by 37 per cent in the year to March 2011, with sales of $2.4 million in the 2012 financial year expected to grow to $4.37 million in 2013. Unlike most other craft beer-makers in New Zealand, Moa sees exporting as the big prize - a significant 30 per cent of Moa's revenue already comes from overseas sales.

It exports to seven countries, including the States, Australia, Finland and Cambodia. It also has the only beer tap at the Koru lounge at Auckland Airport, was New Zealand's official beer at the London Olympics last year and you'll find a Moa bar at Pier 29 in San Francisco for the America's Cup. This is just the beginning, so expanding its capacity is a must. The next step was to take the company public with an IPO to raise dosh for expansion, specifically for a new $6.1 million brewery.

The IPO got investors fizzing. It was over-subscribed by 124 per cent so Moa easily raised the $16 million it wanted, $15 million from institutional investors, $1 million from the public. Better still, the shares, after being sold at $1.25 apiece, were quickly traded at $1.35 each - an 8 per cent premium. No wonder Baker was nominated as a finalist in the Herald's 2012 business leader of the year.

Twelve months on, Moa has been beset by bad headlines because it's nowhere near breaking ground on its new brewery and its sales are way down on the forecast. Hardly a surprise its share price has nearly halved from its peak.


The first of these problems, the hold-up with the new brewery, doesn't look as though it will be resolved any time soon, though the company had hoped to have it running by early next year. Instead, Moa will be heading to the Environment Court. Some of its Marlborough neighbours, including the foreign-owned Cloudy Bay vineyard, have opposed the expansion, citing concerns over traffic, noise, water, wastewater and odour.

The Marlborough District Council granted consent with conditions, however opponents have lodged an appeal. In a statement, Cloudy Bay's estate manager Ian Morden, a South African-born lawyer-turned-liquor executive, said an "industrial-scale brewery" was not appropriate in a "unique rural environment" renowned internationally for its wine-growing.

According to Ross, Moa's planned brewery would be much smaller than Cloudy Bay's own impressive complex and suspects Cloudy Bay thinks beer would undermine Marlborough's reputation as a wine region. "Which we don't believe," he says. "All wine regions have vibrant food and beverage offerings. Most wine regions - Napa, Burgundy, Bordeaux - have craft brewers in them and they [winemakers] support them."

Ross isn't confident that the new brewery will be under construction by the end of next year and is planning 18 months of "contract brewing", or using another brewery to make some of Moa's beer. Ross won't say where this will be but it would be surprising if it wasn't one of the half a dozen nearby breweries, of which the biggest is Nelson's Stoke, run by Dean McCashin, son of Terry, the man who started Mac's.

If Moa's new brewery brouhaha is a product of neighbours at war, then the stuff-up with the sales forecast, while ironically not-foreseeable, is something Ross blames on himself.
The Australian-based wine sales and distribution company Treasury Wine Estates (TWE) "seduced" Moa last year, Ross says. Although TWE was meeting its numbers before Christmas, figures for April and May were down before going up, after a crisis meeting between the two companies, in June. "[We thought] okay, maybe we've fixed it. Then July was a shocker, absolute shocker." They were forced to tell the market.

The reason for signing on with TWE was to sell more at a lower cost. The unfortunate reality was Moa drinkers began having trouble finding their beer.


"[TWE said] 'we'll sell more for you and you won't need those office people [at Moa]'. But it was a mistake, it was mistake we made and I take accountability for that."

Moa's sales have now returned in-house and, at the time of writing, it and TWE were in private talks about their deal. TWE will not comment until those discussions have ended.

But the damage has been done. The day Moa announced sales wouldn't meet predictions, major sharebroker Forsyth Barr downgraded Moa's stock from "hold" to "sell".

Forsyth Barr analyst James Bascand says the scale of the expected downgrade in sales "highlights some management flaws", both in the form of over-optimism in the original forecast and the fact that the scale of the sales shortfall was not picked up earlier. "Until we see evidence of a turnaround on the back of the new distribution model, we remain cautious on the levels of expected sales growth - albeit we are still forecasting substantial growth.

"Keeping the market updated on the successful progress of this will be integral in turning around the market's current outlook on Moa."

Hard yakka will sort out the sales stumble and - the environment court willing - the brewery expansion for Moa and these will cheer up the markets. But fixing public perception might be the trickier bit. Bascand, for one, says this is something Moa needs to sort. "The next step for Moa needs to be embedding its revised New Zealand and Australian distribution models into the business and ensuring it rebuilds relationships with its on and off-premise customers."


When I ask Ross about the damage to his brand, he confirms it's taken a kick.

"Now it's up to us. There's no substitute for getting some runs on the board really."

That might help with the schadenfreude too. Brewers Guild president Ralph Bungard, who is a co-owner of Three Boys in Christchurch, says there's been a bit of this around among fellow craft brewers.

"It's tricky, isn't it? There's always a bit of schadenfreude that goes on ...

"Some of those marketing campaigns, there was a fine line about giving the big boys a hard time. And when you do that, there's always a chance it will come around and bite you on the bum. The odd person was giggling about that, that you could almost see it happening, if it went wrong there could be a bit of an 'I told you so' sort of attitude."'

The "big boys" have certainly taken their chance to take the piss: within days of the share pricing plummeting, Tui, which is owned by DB (in turn owned by Heineken), had stuck up billboards reading: "My shout, I've got shares in Moa beer. Yeah right." Hardly elegant, barely eloquent but Moa's reaction, a long letter from Scott challenging Tui to a "beer off", failed miserably on the Ronald Reagan dictum, "If you're explaining, you're losing."

Even Shane Warne "dropping in" to have a beer at Moa's brewery around the same time - an "event" faithfully reported by the media - seemed a bit lame. As Cricket NZ PR guy Richard Irvine tweeted, "Another marketing disaster for Moa."


Yet there are reasons to be cheerful. Craft beer is hip right now, even though as Bungard says, "the bottom line is that trendiness of the product doesn't necessarily translate into profitability".

Still, Ross and Scott remain upbeat. They have to be, of course, though Ross at least has been in a similar situation at 42 Below, which also changed distributor.

"A growth curve is never a straight line typically in any growing business," he says.

"It's more of a roller coaster but as long as the overall trend is going the right way you should be confident, which it is in our case. The response from people, now we've told them we're changing, is fantastic. Josh was out with one of [our sales guys], Scotty, on Friday last week and people were coming up to Scotty and hugging him and saying, 'Welcome back'."