First the food, and now it’s time for the beer
Merger with craft brewer Moa will help to grow restaurant group, its founder tells Aimee Shaw
Advertising man turned restaurateur Lucien Law says merging with NZX-listed Moa Group — a third the size of his own hospitality business — was a risk he was willing to take.
Under the Moa umbrella, Law’s Savor Group will be able to expand and accelerate its growth. The hospitality business, which operates a dozen restaurants and bars throughout Auckland, is aiming to grow, including nationwide.
Moa acquired Savor last month for an initial $13 million — in cash and shares — which makes Law and his family one of the biggest shareholders in the brewing company, holding a 5.35 per cent stake, equivalent to 4.467 million shares. The deal includes further payments if various targets are met.
As part of the deal Law has been appointed managing director of hospitality at the listed company, with long-time Savor shareholder and business partner Paul Robinson, both charged with running the hospitality side of the business, worth around $25 million.
Law is now also a Moa executive director and will attend board meetings, the company’s annual meeting and will be “getting involved in the Moa brand”.
“We’re in it for the long term and see this as an opportunity to grow the business,” says Law. “How will we benefit each other? We’ll look at growing the Moa brands and other liquids and areas we might go into in the future.”
Law, 43, founded Savor and began opening the first outlets, Ebisu and Tyler Street Garage, about seven years ago. He then took over the Seafarers building in downtown Auckland, and put in the acclaimed restaurant Ostro and other bars and venues spread across the building’s six levels.
Today there are 12 outlets in the group including Ostro, Ponsonby’s Azabu, Fukuko, Las Vegas and rooftop bar Seven. The group recently opened three eateries and a bar in Sanford’s Auckland Fish Market on North Wharf, which Law designed and worked on for about four years. The Seafarers building is the biggest revenue driver for Savor.
Law teases that there are a “couple of things on the horizon” the group will do together this year, including “a new brand” going into Auckland Fish Market.
Other concepts Savor has been working on include making use of space at the back of restaurant Ostro, and projects it was working on before the transaction. It hopes to open three of these this year.
Moa has a team of 22 employees; Savor has 270.
Acquiring Savor will almost triple Moa’s revenue and take the group into profitability following seven years of losses since it listed on the New Zealand Stock Exchange in the fourth quarter of 2012. Moa expects the deal to contribute $3.6m in earnings before interest, tax, depreciation and amortisation in its first full financial year.
It’s a big boost for Moa, which has struggled since listing.
The company narrowed its loss in the second half of the financial year, trading at a loss of $600,000 in the six months ended
You don’t come out to a restaurant because you’re hungry — you go to Countdown if you’re hungry. You come out to a restaurant to be entertained and to have an experience . . .
March 31. Moa said sales were up 15 per cent within the period and three of the last six months were in profit. The acquisition is expected to add approximately $26m to Moa’s consolidated revenue, to take total group revenue for the full year to more than $40m.
Savor’s Japanese brands will probably be the first to expand into other parts of the country, with Queenstown likely to be the first location outside Auckland, says Law.
“Our goal is to grow, with what we can do with the liquids and having the brewery now, that will help us determine what the right way forward is.
“There’s plenty of opportunities to put restaurants in places but it’s about making sure we’ve got the right staff to make them really what they should be. We’re not so limited by finance or opportunities, it’s more about have we got the staff to really carry that through, and that’s what we have been building.”
Law grew up with hospitality, working in the industry for a long time before he had a successful career in advertising.
His father owned restaurants, including the first fully-licenced Chinese restaurant in Hamilton, where Law got his first taste of hospitality.
The youngest of four siblings, he would help in the kitchen “washing lettuces” and doing other jobs while his siblings tended bar and waited on tables.
“It was good because I could earn money washing dishes and so on in my school holidays. Dad got out of restaurants when I was about 13 but he always had a few on the go and I worked in bars and restaurants and front of house for years.”
When he left school he did an apprenticeship at Auckland’s Hyatt Hotel before going to Waikato University in his mid-twenties to do a marketing degree. Three quarters of the way through, he fell into writing advertisements and left when he got a job at agency Colenso. He then went on to work for London-based agency Mother, before ending up at Saatchi and Saatchi.
At 30 and after about four years in London, Law moved back to Ta¯maki Makaurau to start his own ad agency, Shine, which he has since sold.
“I’m a hospo guy that fell into advertising for a while . . . but then I did an honest profession,” he laughs, referring to running his own businesses.
Law says his career in advertising helped him distill restaurant concepts and ideas.
“You don’t come out to a restaurant because you’re hungry — you go to Countdown if you’re hungry. You come out to a restaurant to be entertained and to have an experience, and that’s what we try to do with our venues,” he says.
“There should always be a clear idea of what you’re trying to provide people with, and everything should follow from that. In a restaurant, an idea helps you inform what style of food, price, plateware and service style.”
Law has owned businesses for about 14 years and is well aware of the risks, especially operating in the hospitality industry.
He says the risks associated with merging with Moa, a much smaller entity than his own, never put him off and believes the pairing will be beneficial in the long run. “There’s risk in everything when you’re doing deals but restaurants are pretty risky as well — it’s never been a walk in the park, so I don’t mind a bit of risk, there’s big risk and reward for both of us.
“It will be interesting to see where we go and whether we create a Moa concept bar . . . I’m not sure if people want to be in a onebranded place, I could see a bar that has a lot of great craft beers in it.”
Restaurant and bar openings in this country have been on the rise over the past few years. In 2017 there were 530 new venue openings, taking the total number of hospitality businesses to 17,328, according to the Restaurant Association’s latest industry report.
Law says it is an exciting time to be a food and beverage operator and the industry is on a steep upward curve.
“For us, there’s been no master plan to be the biggest or have some ideal magical number.
“The five-year goal is to do more, look for exciting opportunities. There’s no go out there and create five-in-a-year crazy stuff, it’s just about putting more into our current venues and do more exciting things with the building we have.”
Law has worked with beer brands in the past, in a creative and advertising capacity, including helping to develop the Mac’s Brew Bar concept.
Savor and Moa’s offering go hand-inhand, he says. The acquisition was no spur of the moment decision and came after talks between Moa chief executive Geoff Ross, an ex-ad guy himself, and Law over a year or so.
“I’m really confident that Moa’s in a good place at the moment and it’s ready for its next phase — I’m really excited to be on that journey,” says Law.
“In our establishments it is business as usual and what we’ll do in the future is really exciting. There’s a lot of opportunity for us, and I have no intention of slowing down — Geoff didn’t buy us to do status quo.”