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Last Updated: Thursday, 21 August, 2003, 07:18 GMT 08:18 UK
The 'less gassy' rise of Cobra Beer

By Emma Clark
BBC News Online business reporter

Karan Bilimoria, founder of Cobra Beer, quaffed his first glass of beer as a teenager, cavorting with young officers in the messes of the Indian army.

"We were not allowed to drink spirits," he adds in pukka, English tones, sitting at his office in Parsons Green, London.

Karan Bilimoria, founder of Cobra Beer
Mr Bilimoria wants to take on the big beer labels
Years later, this formative experience provided the inspiration for a less fizzy beer, brewed to sit easy in the stomachs of over-gorged curryholics.

Touting crates of lager to Indian restaurants in London, however, was not the career his parents had in mind.

The son of an Indian general and educated at Cambridge, Mr Bilimoria rejected law and accountancy for the "blue-sky freedom" of entrepreneurship.

Earlier in his career, harebrained schemes to sell Indian-made polo sticks to Harrods earned him the name of "import-export wallah" back in Hyderabad.

When he turned his hand to beer in 1989, his family realised, "this was getting serious now".

Were they horrified? Mr Bilimoria, immaculate in his trademark blue blazer and a crisp shirt, laughs heartily.

But they needn't have worried. More than 10 years later, Cobra Beer sells more than 50m worth of beer a year - half of which is consumed in 5,600 Indian restaurants in the UK.

'Ingenious' advertising

A quirky and carefully targeted marketing campaign means the beer's brand punches above its weight in terms of customer recognition.

A guide to the facts and figures behind Cobra Beer

Cobra's share of the UK beer market is less than 0.02% and yet anyone who has seen the inside of a curry house is probably familiar with the sandy, gold labels.

Since inception, Mr Bilimoria has recognised the power of branding, even deserting his original choice of "Panther Beer", after consumers didn't warm to the name.

Revealingly, when the company first toyed with a float on the stock market in 2000, advisers considered positioning the company as a "brand business".

'Never giving up'

To date, the company's success has been founded on ploughing the furrow of the Indian restaurant market.

"By targeting a niche, they managed to survive - it was a niche that [none of the big brewers] had thought of," says John Band, a drinks analyst at Datamonitor.

Mr Bilimoria and his friend Arjun Reddy also priced their beer at the top-end (and were careful in the early days to park their battered Citroen 2CV several streets away before hawking cases to restaurant owners).

Karan Bilimoria, founder of Cobra Beer
I felt very demoralised, but never once thought of giving up
Karan Bilimoria
"From day one, we said, 'This is what it costs'," says Mr Bilimoria. "We had to have faith and confidence in our product."

During the first five years, he recalls feeling "very demoralised, but never once thought of giving up".

Mr Reddy decided otherwise, leaving the company in 1995 to return to India.

His departure sparked a new stage of development and the emergence of a management team. Mr Bilimoria sold shares in the company to raise 500,000 in investment.

Bangalore dreams

Initially, Cobra contracted Mysore Breweries in Bangalore to devise and produce the beer, but later switched to the UK brewer Charles Wells after problems with quality.

The beer famous for being "Indian" hails from Bedfordshire, although Mr Bilimoria now has plans to set up his own brewery in Hyderabad to support sales of Cobra to India.

Local facilities should allow the company to avoid excessive import duties. The new strategy has been forged on Mr Bilimoria's belief that India could become the biggest market for beer in the world.

A graph to show the growth of beer consumption in India
In 2002, the market expanded by 10%, even though per capita consumption of 0.6 litres a year (compared to 98.7 litres in the UK) is still very low.

"There is much scope for growth, but this is likely to be of the order of 5% per annum, with ups and downs," says the drinks analysis firm Canadean.

There is also strong competition: Cobra's long-term rival Kingfisher is India's top brand, while SABMiller is making great strides with its Knockout label - produced, incidentally, by Mysore Breweries.

Turf wars

Conquering the "home" market in India is one part of a wider strategy to step up exports and go mainstream in the UK.

Mr Bilimoria has lofty aspirations to take on the big labels by switching more of his distribution to supermarkets, pubs, bars and clubs.

It's a risky strategy - the mainstream market is crowded with the likes of Stella Artois, Carling and Heineken, all fighting to hold customers at a time when overall beer sales are shrinking.

However, Datamonitor's Mr Band says Cobra "is too shrewd to break the bank on this", adding that the company would likely build up sales gradually.

Mr Bilimoria evidently hopes that his personal mantra "to aspire and achieve against all odds" will stand him in good stead.

Work-alcoholic

Despite being feted by the media for its heady sales growth in the 1990s, the company has experienced disappointments.

In May this year the company had to abandon its long-cherished ambition to float on the stock market.

Mr Bilimoria says he is undeterred, but for a work-alcoholic, who routinely puts in an 18-hour day, any checks on his ambition must be frustrating.

Even a passion for polo has given way to his quest to take "less gassy" beer from the messes to the masses.

Blessed with a "very supportive wife" and three children, this import-export wallah of Parsons Green has more than polo sticks to keep him busy.


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