The Shout Magazine (New Zealand)

NZ’s biggest cider producer built on sweat equity

Zeffer co-founding chief executive Josh Townsend is realistic about the challenges associated with starting a business.

“Small business is endlessly challenging and every day we work through problems to deliver on our strategy, and we don’t always get it right.”

But he says working through those challenges in a small and motivated team makes running a business all worthwhile.

“The lows can be low, but the highs are very high and it’s hugely rewarding to be a part of.”

The Hawke’s Bay-based cider business continues to make strides here and internationally.

Zeffer was founded in 2009 by Townsend, Sam Whitmore and Hannah Bower. Whitmore is the cidermaker and Bower is head of culture and HR. The three have grown Zeffer into New Zealand’s largest cider producer.

After discovering the craft beer and cider niche overseas, the entrepreneurs asked themselves why New Zealand didn’t have a similar market, given its abundance of succulent apples.

The trio started selling small batches at the Matakana Farmers Market and now supply 10 small markets around the world. About 15% of its cider is exported, a slight reduction in the past two years as it focuses on its domestic strategy.

Humble beginnings

The company started with supportive partners, friends and family. It ran on sweat equity in the early days.

“We were a young unproven team who had to demonstrate results before we could justify a meaningful capital raise and without the support of this core group, Zeffer would not be around today,” says Townsend.

It held its first capital raise in 2017 with Snowball Effect and since completed two subsequent raises which have capitalised the business well and set it up to deliver significant scale.

The company established a structured board of directors which was unusual for a business of its size.

Townsend says it’s great to have an avenue to step back and to lean on the guidance and pressure from other directors to keep on track. “This also helps avoid groupthink amongst our tight-knit management team which is important,” he says.

Townsend says New Zealand is a great place to connect with other businesses and mentors and that Kiwis are known the world over as hardworking and committed operators.

“It’s the competitive small business environment we grow up in which breeds this mentality.

“We underestimate how competitive an environment we operate in; we are a tiny population of thousands of small businesses run by ambitious and capable people at the bottom of the world.

“This results in rapid learning and efficient use of resources and means there is very little room for error. To succeed you must be completely committed to what you do and willing to continuously innovate.”

Coronavirus concerns

Townsend says Zeffer has had a challenging year in its largest export market, China.

Townsend says the coronavirus (COVID-19) proves why it’s important businesses try and be well capitalised early on and don’t put all their eggs in one basket or market.

“Fortunately, we are not too reliant on China, but it is our largest export market and the coronavirus has been a good reminder of how one event can cripple an industry, as it has done with F&B in China.”

Many of the bars and outlets Zeffer supplies are either temporarily closed or have completely shut down, creating some short-term pain.

“We are often told to focus on one export market and execute it well, and although there is merit in not diverting attention across too many markets, coronavirus has been a good reminder to always have a plan B market in case of unforeseen events.”

Column by Catherine Beard, Executive Director of ExportNZ