Kiwi beer Moa ventures into SE Asia and China; experts warn of challenges

According to the offer document it released, the company plans to actively pursue these markets, including the provision of brand ambassadors and marketing support where appropriate.

Moa, which predominanly operates in New Zealand and Australia, already distributes four of its 10 brands in a limited capacity (mostly on-premise) in these countries. But with fresh funds coming in, the company intends to ramp up distribution significantly.

“The Asian markets present a great opportunity, and we want to build on that,” said the company’s general manager, Gareth Hughes in a telephone interview with Campaign Asia-Pacific.

Indeed, emerging markets like Vietnam and Cambodia are growing at a faster rate than the rest of the region. According to data from market research company Euromonitor, beer consumption in Vietnam and Cambodia is set to grow 9 per cent every year between 2011 and 2016, as Asia-Pacific records a 4.8 per cent growth rate.

China too boasts opportunities, having overtaken the United States as the largest beer producer, making twice as much beer as the US in 2010. Still, imported beers make up a meager portion of the market. “This immature and growing nature of the Chinese market could be seen as hugely lucrative for breweries like MOA,” said Simon Bell, director of strategy at Landor.

The Marlbourough-based company intends to increase capacity by five times its current levels with a US$12 million fund infusion.  As a result, Moa, which distributed 49,500 cases of products across markets will double its distribution to 97,000 cases in 2013.

At the moment, Hughes said the company will not be opening offices in these regions but will rely on its distributors to market the brands. In Singapore it has partnered with Trilogies of Beers. The Warehouse is its distributor in Vietnam. Fine Star will market it in Cambodia, and Soshan Oliva Enterprises will distribute in China.

The craft-beer brand is pushing its large format bottles in this region, because the company feels dining out with friends and family plays a big role in consumption habits.

On the marketing front, Hughes said the company, which was the offical beer for the New Zealand Olympics team, is planning below-the-line activities and in-trade activations.

Moa has been known to market to men. One look at its investment offer suggests that it isn’t abandoning that strategy any time soon. The prospectus is slapped with racy pictures of scantily-clad women and tips targeted at men. A couple of years back, the company had launched a campaign distributing free t-shirts to people that read ‘Low carb B(Q)eers, Moa Beer—full strength’.

“Their strategy is designed to set the company apart in an increasingly crowded market for boutique beers,” observed Bell.

But is the strategy enough to make in-roads into the thriving Asian market? Not so much, argue experts.  “When they arrive here they will find they are not alone and need to compete with entrenched, local, mainstream players and international premium brands as well as growing trial of spirits, alcopops and wine,” said Matthew Carr, deputy managing director, Oracle Added Value, Hong Kong.

Carr pointed out that in Singapore, drinkers have a choice of mainstream, premium, super-premium speciality beers, while in Vietnam regionality will pose a challenge with two key local players: Hanoi in the north and Ho Chi Minh in the south (both names of beer). “In China, sheer size means regional differences are key," Carr said. "Moa will need to master these to understand where they want to play.”

Bell agrees. “New beer brands pushing into Asia should be warned to think different," he said. "Here, the big boys have a stranglehold on distribution and spending power to give persistent reminders of their presence.”

He also warns Moa that “new is nice but not likely enough of a message to sustain and to convert mature audiences.”

Hughes owns a 1.7 per cent stake in the company. New Zealand-based investor Pioneer Capital owns 42.6 per cent of the company, followed by The Business Bakery and Allan Scott Wines.