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Spotting The Gap Between Ale And Lager
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How did you find a niche for Cobra beer in England?
Traditionally, England was an ale drinking country with 99 per cent consuming ale and just 1 per cent lager. By the time I started Cobra, 24 years ago, it was already a 50:50 market. Today, a large majority prefers lager. I spotted an opportunity and came up with the idea of a drink that had the refreshment of a lager, but the smoothness of ale, one that would be a great accompaniment to Indian food. Most women don’t like beer because they find it bitter and (believe it) causes bloating, but they like Cobra.
And why did you choose the name Cobra?
We wanted a short, sharp, punchy and memorable name that would take people to India quickly.
Having built the brand from scratch, why did you divest?
The joint venture was formed under very challenging circumstances. Investors wanted us to sell the company. Instead of selling, we found Molson Coors, who agreed to a joint venture. In the global joint venture, I have 49.9 per cent stake and they have 50.1 per cent. And in the Indian JV, I have 49 per cent and they have 51 per cent. People think I have sold out, but I am very much involved.
What has the JV brought to the table?
It has brought rapid growth. What Molson Coors brought to the table was finance, distribution capability and marketing muscle. In my case, I brought the entrepreneurial spirit, drive and vision. A big company’s tendency is to do things slower and later, while an entrepreneur’s tendency is to do things quicker and now.
By end of May 2014, we were 23 per cent up compared to last year. The Indian business is growing much faster.
In India, we brewed in Bangalore for the first seven years. Then we moved production to the UK and Europe. In 2005, we started brewing in India again. At one stage, we were brewing in nine different breweries in India. Then three years ago, we focused on Bihar; we bought a brewery there. We spotted the turnaround in the state and bet on it. So far, it has paid off. Now we brew in Bihar, Haryana and Punjab. We are sold in Bihar, Haryana, Punjab, UP and West Bengal. Cobra is also manufactured in Belgium and the UK.
In India, the positioning of Cobra beer is of an Indian beer that is widely awarded and sold outside and now available to the Indian consumer.
You also have a luxury beer. Can beer really appeal to the luxury palate — more accustomed to wine and whisky?
In the UK, the categories are standard beers, premium beers, world beers and now a whole new category called craft beers, which are made in smaller breweries with encrafted recipes. Our craft beer King Cobra is produced in Belgium in champagne bottles. We brew beer, pour them into champagne bottles and add ale yeast and seal these bottles in a cellar. We then heat it so double fermentation happens for two weeks. We then cool the bottles and let the yeast settle. And because of that we don’t pasteurise the beer, which means it is fresh and has an amazing texture and aroma.
Do you see a market for it in India?
It will be a very restricted market.
(This story was published in BW | Businessworld Issue Dated 15-12-2014)