The Hindu Business Line : The fizz of the Cobra

Eat Indian, drink Indian. Cobra Beer's luck in the UK has run in tandem with the popularity of curry. It now sets its sights on other markets, including India.

WINE and tandoori chicken. A blasphemous combination, right? How about a beer that helps you digest your curry better?

Smell opportunity?

Well Karan F. Bilimoria surely did, when he started out in 1989 in the UK. And rightly so.

So much so that in the short span of a little over a decade, his company, Cobra Beer Ltd, which is in the business of manufacturing beer and wines, is now approaching a turnover (retail value) of 50 million pounds (about Rs 375 crore).

Says Bilimoria, Chief Executive of Cobra Beer, "I found at that time that Britain, a nation of curryholics, needed a smooth beer to accompany Indian food. I saw that the market was dominated by harsh, gassy Eurofizz beers, all poor partners to spicy food and so I wanted to produce a really good quality lager which would complement rather than fight Indian food."

With this idea in mind, Bilimoria tied up with Mysore Breweries and exported the first shipment of Cobra beer to the UK in 1990. "Initially, I drove a CV to deliver the beer myself to Indian restaurants in the UK. However, soon after I started getting repeat orders. There has been no looking back after that."

Later in 1997, Cobra stopped brewing at Mysore Breweries and commenced brewing under licence from Charles Wells in the UK.

The market conditions too helped with rising demand for Indian restaurants and food in the UK. According to estimates, in the year 2001, there were over 8,500 Indian food restaurants in the UK alone, with a combined annual turnover upwards of 2.4 billion pounds.

Further studies showed that 62 per cent of the customers ordered beer with their food. "Also, research showed that over 25 per cent of people in the UK eat curry once a week and nearly 50 per cent once in a fortnight. The total retail and restaurant sale of Indian food is fast becoming more and more popular worldwide."

No wonder there is increasing competition in this segment too.

When Bilimoria started out, there was only Kingfisher beer in the segment, which still remains very popular.

Now, of course, there are a host of brands such as Lal Toofan and Bangla, among others, which are not only battling it out among themselves but are also aiming to topple popular `non-Indian' beers such as Carlsberg (which still occupies a large market share in the Indian restaurant sector in the UK) from the Indian restaurant scenario.

"Two years ago Kingfisher had a market share of around 18-19 per cent of the Indian restaurants in the UK while Cobra Beer's share was around eight-nine per cent. Now we command around 22 per cent of the share while Kingfisher is around 10 per cent," says Bilimoria. According to the company, Cobra beer has been growing annually at over 50 per cent.

In 1997, Cobra diversified into wine with the launch of General Bilimoria wines, sourced from Southern France.

The wines are already selling in excess of 300,000 bottles per year, and three more wines from South Africa will be added to the range in autumn this year.

Clearly, the idea that Indian food is best with Indian wine and beer has caught on, and the company is now looking to take it beyond the UK.

Cobra Beer is now in expansion mode. With export revenues already touching about 20 million pounds, Cobra is looking to make inroads into newer markets, including India.

For one, the company has already launched its products - Cobra beer and General Bilimoria wines - in the Indian market this year, the roll-out of which will be completed across all metros by March 2003. The products have already been rolled out in Mumbai, Goa and Delhi in the institutional segment.

However, priced at Rs 99 for a 330 ml beer bottle, the company is not really expecting volumes to take off in a big way immediately.

Says Bilimoria, "The price will come down once we start manufacturing the product in India.

However, this will happen only when the market becomes more deregulated." The company, though, has started making efforts towards this end. It intends to either set up its own greenfield plant in India or strike a contract manufacturing tie-up with a local player to produce Cobra beer in India.

"The Indian beer segment has much potential for growth, with the current per capita consumption of beer at only 0.7 litre. Compare this with China which has per capita consumption of 16.1 litre or the UK which is at 95.4 litre," says Bilimoria.

The company may also then look at exports from India to the surrounding regions.

Till then Cobra beer intends to create brand awareness through promotions, primarily due to the restrictions on liquor advertising in India. Though not giving exact details, company officials also said that Cobra intends to take part in sponsorship of cricket in India.

Another push will be in the US market, which is also a sizeable market for Indian food.

Meanwhile, to meet growing demand Cobra Beer is also believed to be looking for a facility to brew in Europe (in addition to the brewery in the UK).

"Potential markets for our product include West Asia and even South East Asia. At present, we are exporting to about 30 countries", says Bilimoria.

Other long term plans for the company include listing on the London Stock Exchange.

Meanwhile, only time will tell whether Cobra will be able to grab a piece of the already highly-competitive Indian beer market once it starts brewing here.

Till that time, the company can continue growing on the growing popularity of the Indian palate abroad. Cheers!

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