Business Weekly - Cambridge, UK

Cobra Beer's new CEO, Adrian McKeown

The company:

Cobra Beer Ltd was founded in 1989 by Cambridge law graduate, Karan Bilimoria, then aged 27 and £20,000 in debt. The beer was first brewed in Bangalore in 1990 and imported to the UK for seven years. In 1997, Cobra started brewing under licence with the then 125-year-old family run Charles Wells brewery in Bedford. Now it is also brewed in the UK, India and across Europe.

It has experienced remarkable growth in recent years and in 2006 celebrated a record year as sales across all its markets rocketed. Having raised over £27m  investment and successfully run its biggest-ever TV advertising campaign throughout the autumn, overall sales figures were up by 65 per cent year-on-year and group retail value turnover reached approximately £126 million over the last 12 months to May 2007.

Adrian McKeon joined Cobra Beer as chief executive in 2007. As well as overseeing Cobra’s UK business, Adrian has overall responsibility for its global business operations and India office. Adrian was previously managing director at Beam Global Spirits & Wine – owners of brands including Jim Beam, Courvoisier, and Teacher’s.
In his two years in this role he grew the organisation’s profits by 26 per cent following their acquisition of Allied Domecq brands. Prior to this he worked at boardroom level at Constellation Brands and subsequently was appointed managing director of Allied Domecq Wines. In 2006 Adrian was listed as one of The Drinks Business’ 50 Most Influential People in the UK drinks industry.

1) Karan Bilimoria said he always believed the new CEO needed to be an all-rounder; how do you hope to use your experience for the benefit of Cobra Beer?
I’ve spent around 20 years in the drinks business and in this time have worked on wine, spirits and now a beer brand so I certainly feel I have broad experience of the marketplace. I started my career in sales with Ernst Julio & Gallo Wines and have since then held a variety of sales and marketing positions with Constellation Brands, Allied Domecq Wines and Beam Global Spirits & Wine so have a good working knowledge of the industry that should stand me in good stead with my role at Cobra.

2) Karan Bilimoria started Cobra Beer from scratch in 1989 and built it into a company with a £126m turnover. Where do you plan to take it next?
Cobra is a phenomenal success story. For Karan and the team to have achieved what they have with Cobra in such a competitive beer industry full of global brewing giants is an incredible feat. The foundation of this success has been the relationships that Cobra has built with its suppliers and customers.

I believe, with the additional sales and marketing expertise brought into the business in the last six months, Cobra has enormous potential for even greater growth in the next few years. Pubs and bars are a particular area of focus for Cobra going forward and our target is to gain 20,000 new listings in the next 18 months. To help achieve this, we’ll be investing £14m in marketing activity in 2008 and in the second quarter of the year will launch Cobra’s biggest-ever integrated campaign.

The target we’ve set for Cobra is to become a UK top ten premium lager brand by 2010 – that is our main focus.  In order to do so we need to double our growth rate to 60 per cent over the next two years. I am sure that, with the team we have in place at Cobra, we can reach this ambitious target.

3) Cobra Beer raised £27m of investment in 2006. How has this been used and will you be looking to raise any more?
Over 40 per cent of the £27 million raised in the summer of 2006 has been re-invested into our Indian operations – India is, along with the UK, a key market for Cobra. We plan to invest a total of around $50 million into our Indian business over the next couple of years.

4) Cobra acquired its first brewery – Iceberg Industries in India – last month. How soon, if at all, before you set up your own UK brewing operation, too?
Cobra acquired 76 per cent of Iceberg to meet the growing demand for Cobra and this purchase has demonstrated our commitment to the Indian market and has added value to our business.

We have ambitious plans for further growth in India and are looking at ways to further increase brewing capacity there, in a market where there is huge demand for capacity.
However, this won’t affect our relationships with other brewing partners as brewing in India is solely for the domestic Indian market. We have no imminent plans to set up our own UK brewing operation as the European market is currently over capacity and it is more cost-effective to brew under licence. Given the emphasis we place on the quality of our beers, we work only with the best breweries in each marketplace.

5) Cobra has expanded its range of beers – Cobra 0.0% alcohol-free, Cobra Lower Cal, King Cobra,  Cobra Bite, which itself has four different flavours. Why is it so important to innovate with new beers and who develops them?
From the very start Cobra has recognised the need to be innovative to be successful in such a competitive industry. Cobra is unique as a beer brand because it remains an independently-owned company, one of very few in an industry full of big brewing groups.

This allows us to be freer to innovate and be creative and makes us quicker and more responsive to market trends. In fact, we have appointed a marketing manager who will look after NPD as well as a Head of Insights, who will be responsible for looking at emerging market trends.

6) You have an ambitious target of gaining 44 pub listings per day. How do you plan to achieve this and are you on track?
In addition to bringing on Nick Paget from Beam Global as Commercial Director, we have hired a new seven-person strong Trade Marketing team who will oversee commercial planning and Cobra’s brand execution and technical services provision in all UK sales channels.

We’ve also created new positions such as the On-trade Channel Controller and expanded to include more Business Managers. Lastly, as part of our distribution drive, we’ve hired Box Marketing, a specialist agency who will be dedicated to making the initial contact with pubs and bars to gain listings in the on-trade and so far a few weeks into the 18-month plan, it’s going exceptionally well!

7) Cobra Beer currently has strong penetration in the ethnic restaurant sector too – over 94 per cent of all licensed Indian restaurants – where does Cobra’s future market lie?
Much of Cobra’s success to date has been the strong relationships forged with the Indian restaurant sector. Restaurants that stock us aren’t just clients, they’re friends and to recognise this special relationship, we recently held a Cobra Festivals Event in which we invited restaurant owners from all over the UK to celebrate the holiday season with Cobra at a banquet dinner.

We have also found through consumer research that consumers have a lot of affection for Cobra having tried it in Indian restaurants – something which mirrors the rise in popularity of Indian food. Cobra’s past, present and future will always be rooted in the Indian restaurants but our biggest challenge and opportunity going forward is to bring our premium beer more into pubs and bars.

8) You have been busy strengthening the marketing offering at Cobra Beer. What is your feeling about the public’s general perception of the brand and how do you hope to change this?
Through research and focus groups we have done with our target consumers in the past few months, we’ve found that consumers generally have a lot of affection for Cobra and think of it as a premium quality brand.

There is certainly a strong brand association with Indian food for a lot of consumers, and this is something we hope to build on. Pubs and bars are more than ever focusing on their food offering as a revenue stream so we believe that we have a great advantage in that Cobra is widely known as a beer that goes well with food.


9) With a brewing operation that stretches from Bedford to Bihar, how do you manage to maintain a high level of uniformity and quality control?
The quality of our beer is what Cobra’s reputation has been built on. Brewed to an authentic Indian recipe and using only the finest natural ingredients, Cobra strives to maintain consistency everywhere it is distributed. We brew only with the best breweries and have taken extra measures when possible such as with the purchase of our own brewery

10) What inspired you to want to become a scientist and from there an entrepreneur? What is the company’s non-UK and Indian penetration and what are your plans to grow this?
Our core focus is on two key markets – the UK and India. Beyond these markets on the international front, we have identified key export markets which will enable us to focus more resources on the biggest opportunities such as Spain, Germany, South Africa, Australia and Sweden.
We’re hoping to double the size of the international business by 2009 (in terms of sales revenue) and reach sales of 20 million cases in India, thus obtaining around a 10 per cent share of the Indian beer market by 2012.

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