The Hindu Business Line : ‘Our drinkability’s our success’

The Cobra is spreading its fangs! And if Karan Billimoria, founder-chairman of Cobra Beer has his way, he would price the commodity so low that even the people at the bottom of the pyramid will opt for it instead of hooch. Cobra is growing in the country and making inroads into the 100-million cases per annum Indian beer market. In a tete-a tete with BrandLine, the UK-based knighted businessman said the company is like David and will take on the competition (read Goliaths) with its business slingshots. (Since this interview, Billimoria has stated he may sell the company in three years to help fund its expansion.)

There is lots of awareness regarding beer in India and like in the West, people are looking at it as a refreshing drink. Where do you think the industry is heading?

India is a very promising market, especially as the per capita consumption is really low. There is acceptance of beer as a refreshing drink but it still has a way to go till it reaches the level of other nations like Germany or even China for that matter.

What is your strategy for the Indian market?

Cobra is an international brand which has managed to overtake even established brands in the UK. For India, we are looking at both greenfield projects and acquisitions to strengthen our presence. For this year, we have earmarked $80 million for our expansions, which includes adding two new breweries. Currently, we have seven breweries in India in Goa, Bihar, Orissa, Madhya Pradesh, Uttar Pradesh, Rajasthan and Maharashtra. The two new breweries are coming up in Karnataka and Andhra Pradesh.

A slew of international brands are strengthening their portfolio in India. How are you addressing competition?

We are like David and would like to take on the Goliaths with strong business strategies. In our opinion, competition will augur well for the beer industry at large. We aim to sell 20 million cases annually by 2012. This means that some of the international premium brands like Cobra Strong will be introduced for the discerning Indian consumer. Currently, from its global portfolio of 35 SKUs, only four are present in the Indian market.

Any more acquisitions on the cards?

Our last acquisition in India was of Iceberg from Bihar. We are in talks with a brewer for acquiring a majority stake.

Food pairing is the international rage. Are you also looking at it?

Our drinkability is our success. Pairing the right kind of food with the right alcoholic beverage is a rage in the West. There is immense potential for all kinds of pairing, especially with such rich diversity in cuisine. Niche variants such as low-calorie beer will be introduced in India once the market matures.

Ban on surrogate advertising has been a cause of concern. How is Cobra tackling the issue?

Prohibition has not worked in any market across the globe. The Government must realise that deregulating the industry will benefit the economy at large. Look at China, the Government realised that it is a money-spinner and deregulated the industry. The industry has thus flourished there. A lot of below the line activity is being undertaken, besides consumer education done by our sales team.

Do you see regulatory and taxation issues hindering the category’s growth? Are you lobbying with the Government?

The entire liquor industry has been lobbying to do away with some of the regulations governing beer production, transport and consumption.

Beer is being treated like country liquor in terms of regulations. This is not a hard drink but a beverage. We believe that in some States there is an import tax if the beer is purchased from another State and sold there.

You have been voted as an icon for university students. How do you feel about it?

I had come to the UK as a student. At that time there was a glass ceiling. Now, of course, Asians have stamped their presence in almost all sectors. I strongly believe that you can get as far you aspire to get. ‘Aspire and achieve’ is my motto for youngsters who want to make it to the big league.