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The Rediff Interview/Karan Bilimoria, founder & CEO, Cobra Beer
'My family thought I was mad!'
October 26, 2006
Karan Bilimoria, the founder of Cobra Beer, has just become Lord Bilimoria. While several Indians have hit the big-time internationally, Bilimoria is the only one to have done so by building a consumer brand.
Cobra, one of the fastest growing brands in the ferociously competitive beer market in the United Kingdom, is today marketed in over 35 countries. The company also has subsidiaries in the United States, South Africa and India.
In an interview with Anvar Alikhan, Bilimoria discusses about what is was like when he first started out, when he was 27 and trying to create a brand with no money.
So how did you start out?
I did my B Com (Hons) from Osmania University and then went to England to do my chartered accountancy. I articled with what is now Ernst & Young. After that I did my Tripos in law from Cambridge. I also captained the Cambridge polo team. . .
Wow! You had all the credentials to land yourself a great job. Wasn't it crazy of you to venture into business on your own?
My family thought I was mad! They did everything possible to discourage me. It all started when I was once playing polo in India. A polo stick maker said: 'Look, why don't you sell our sticks in England?'
I was 27 at the time. I always knew that I wanted to get into business at some point in my life. So I said why not give it a shot? I sold Indian polo sticks to places like Harrods and Giddons, the suppliers to the Royal family's stables.
It was difficult. The buyer at Harrods was very rude to me. But eventually I managed to see the head buyer and got my foot in the door. The fact that I was captain of the Cambridge polo team probably helped.
After that I got into lots of different ventures. Everything from Bombay Dyeing towels to very, very expensive silk jackets that I sold to Princess Diana's favourite boutique. I discovered my core advantage was the fact that I was totally at home in England, and totally at home in India.
I could add value by putting the two countries together. I didn't make much money. But that first year gave me the experience of importing, sourcing, market research and selling. Invaluable!
How did you happen to get into the beer business?
Whenever I went to an Indian restaurant with English friends, they'd leave the ordering to me. I love Indian food and I love beer. But I hated the lager beer you typically got in England -- very fizzy, bland and harsh. I really missed my Indian beer.
Didn't Indian beers exist in the English market then?
Yes. Kingfisher was what I usually drank. But one day in a big London restaurant, around 1986, the Kingfisher came and I took one sip and said, 'This is not Kingfisher.' And they said, 'Ys, it is.' So I asked to see the bottle and in small print it said 'Brewed under license in the UK.'
Oh, no! They'd stopped sourcing it out of India and started making it in UK. So the taste had changed. It now tasted like any English lager.
What's the main difference between Indian beer and lager?
Oh, Indian beer is all lager. Beer has three main categories. Stout or black beers. Ales or bitter, which is what they drink a lot of in England. And lager, which is the most popular beer in the world. It's just that the lager brewed in India has a smoother, less gassy, easier-to-drink feel, which I missed. Particularly, with Indian food.
Aren't Indian beers heavier?
There's this old wives' tale about glycerine. No modern brewery worth its salt would have anything to do with glycerine. But, yes, Indian beers have tended to be slightly heavier. Indian beer has a different texture. It's made from rice, unlike European beer, so there's a big difference.
And India has a 150-year-old brewing tradition, which most people don't know about. So when I was looking at business opportunities I thought I'd love to bring a smooth, flavoursome Indian beer to England. I spent a lot of time researching the English beer market.
As you know, Indian food is hugely popular in England. And two-thirds of all liquids sold in Indian restaurants in England is lager.
So when did Cobra happen?
In 1989 I got an introduction to Mysore Breweries -- India's biggest independent brewery, based in Bangalore, which is where the finest Indian beer traditionally comes from. Based on my research I had long discussions with them. I knew exactly what I wanted. But it's very difficult to communicate what you want on the palate, in terms of colour, texture, aroma, etc.
Finally, they said to me, 'Look, we'll open the doors to our breweries, but you'll have come here yourself to make it all happen.' So I came back and spent three months, working with their head brewer -- a super chap called Dr Cariappa, by far the best brewmaster in India.
The idea was to create a premium lager, but with a taste profile that's somewhere between ale and lager. Something more flavoursome, with a smoother feel than a typical European lager. Something that lets you can eat your food more easily.
At that time, 50 per cent of the UK market drank lager and the other 50 per cent drank ale. In 1961, only 1 per cent drank lager and all the rest was ale.
Wasn't it Heineken that changed the tastes of the British market from ale to lager?
Heineken also. But mainly it was Carlsberg. Their slogan is, 'Probably the best lager in the world,' which is far from the truth. . . in my opinion, anyway.
Did you have a mentor? Someone to guide you around the pitfalls of the business?
There was an Indian gentleman in London called Keshav Reddy. He introduced us to Mysore Breweries. He was the uncle of my partner at the time, Arjun Reddy. Arjun was a childhood friend who had an entrepreneurial bent: he'd been involved in managing his family farms and business from a very young age. So we teamed up to start Cobra. But he left the company a few years ago.
Was Cobra one of Mysore Breweries' brands?
No. Their brand was Pals -- which, unfortunately, is the name of a dog food in England. Their other brand was Knockout. Very successful in India, but there's no way the authorities in England would allow us to use that name. It's too close to the truth!
So how did you arrive at the name Cobra?
We did a lot of research. We looked at lots of names, but it was Cobra that finally won out. It has turned out to be a great asset for the company. Because it links to this part of the world in a way that is authentic, yet contemporary. And it's got such a familiar ring. I've met old British Indian army officers who would say, 'Ah, yes, I remember Cobra from my days in India.' No, you don't.
Your brand graphics are interesting. Who developed them?
The initial ideas were developed by a small English marketing agency. And after that my brother's ad agency in Hyderabad developed them and came up with the first labels.
Didn't you have an ad agency in England?
I started with no money whatsoever. I had to find creative ways to promote my brand on a shoestring budget. To save money, whatever little promotional material there was, was actually printed in Hyderabad by my brother and sent over to England in containers, along with the beer. It was only much later that we could afford to work with Team Saatchi.
What about mass media?
Nothing! Couldn't afford it. We sponsored events whenever we could. Things like the launch of Ismail Merchant's book on Indian food, for example, and charity cricket matches between India and Pakistan. We did joint promotions, PR -- anything we could do to get visibility without spending any money.
We even started the first trade journal for Indian restaurants in Britain, just so that we'd have a channel to communicate with them directly, without getting into mainstream media.
That sounds like a classic case of guerilla marketing. . .
Yes, that's the term that's used now. We were doing it back then, simply because we had no money.
How did you raise finance?
In every possible way you can imagine! And that's where being a chartered accountant helped a lot. It was always the biggest single problem I had: how to build a brand with no finances of my own. But one thing I believe in very strongly is the brand and the future of the business. So I'm very, very reluctant to sell my own shares. And that's difficult because people say to me, your company is going places and I want to buy shares in it. No, sorry. You can't.