Ade to the party
Cobra's new chief executive tells Noli Dinkovski how the beer is set to become an established name in pubs
Adrian McKeon is a firm believer that when you're in the workplace, you work - and when you're not, you have time free for your family.
A good thing, then, that it's just gone 5pm and we're in the Duke on the Green pub just down the road from Cobra's head office in Parson's Green, west London, when Cobra chief executive McKeon takes an expected call from one of his six children. McKeon is waiting to hear how one of his sons fared in a recent exam, only to find it's another ringing to tell his proud dad that he won at rugby.
"I love spending time with my family, and I really value the importance of getting the work/life balance right," says McKeon, a straight-talking Scotsman who speaks with passion. "That philosophy runs right through our company - it's essential that we don't lose focus on the people around us as we strive to achieve our shared vision for Cobra Beer."
It is a vision to which McKeon signed up last July, when the former Beam Global Spirits & Wine managing director was appointed by Cobra Beer founder and now chairman Lord Karan Bilimoria to help take Cobra forward.
Six months into the job, McKeon has assembled a crack management team of drinks industry experts who, in close co-operation with Bilimoria, have formulated Cobra Beer's ambitious growth strategy. It centres on making serious in-roads into the on-trade, with a 10-fold distribution increase to 20,000 outlets in 18 months. With the backing of a £14m promotional campaign and marketing push for 2008, who's to say this won't be achieved?
Rapid growth
Cobra Beer was founded in 1989 by Bilimoria, then aged 27 and £20,000 in debt from his student loans. The Cambridge law graduate and qualified chartered accountant wanted to produce a smoother and less gassy beer than conventional lager, and which complemented food.
Today Cobra is one of the fastest-rising beer brands in the UK, with an annual compound growth rate of more than 42% in the last 10 years. The company employs about 300 people worldwide and has exported its beer to more than 50 countries. A second office opened in Mumbai in 2002, and India continues to be a major market for growth.
With listings in more than 6,000 restaurants and around 2,000 in pubs, bars and clubs, the brand is already a household name. McKeon believes its association with food, through its success in the Indian-restaurant sector, means it is already ahead of rivals in what is increasingly seen as a growth area.
"The tie-in with food gives us unique positioning - not many other lagers necessarily have that connection," he says. Some observers argue this long-held association has left Cobra pigeon-holed, preventing it from being an accepted drink in pubs.
But McKeon says there is a "great opportunity" to move away from this perception. "The overriding reason is the quality of the beer. Add in the affection people have for the beer, then it's no surprise that our latest consumer feedback shows if we made the beer more available, they would drink it more."
Emphasising that the 5% abv Cobra will be marketed as a premium beer, McKeon uses Peroni as an example of how a beer once associated with restaurants can break into pubs.
"Peroni has been incredibly adept at displaying its premium credentials, and getting the point of service right, though things like branded glassware," says McKeon. "Added to this was its tremendous marketing
campaign focusing on Italian style, as opposed to Italian food."
With his management team on board - including marketing director Will Ghali, ex-PepsiCo, trade marketing manager Arran Heal, formerly of CCE, and ex-Beam Global man Nick Page as commercial director - McKeon believes that working to a model similar to Peroni's will lead to Cobra becoming a top-10 UK beer brand within 18 months.
He says Cobra is in position to achieve growth more quickly than Peroni because of its higher exposure as a brand. "Did you know that 47% of males have had an
Indian meal in the last four weeks?" he asks.
"That means half the male population have had contact with our beer in the last month, because our distribution in Indian restaurants is almost 100%," he says.
To support the plan to get Cobra listed in 20,000 outlets (packaged in 17,000 and draught in the other 3,000), the year's £15m marketing spend aims to cover everything from in-pub activities to advertising.
"I'm unable to tell you more at the moment, but we're going to be highly visible on a number of levels. All will have become clear by April," McKeon says.
Keeping up with demand
Aside from its UK growth plans, Cobra has an equally ambitious target for a burgeoning Indian beer market that's growing by 27% year-on-year, according to McKeon. On the back of signing a number of licensing agreements in India last year, Cobra acquired its first brewery, Iceberg Industries, in January. McKeon says the new brewery is the first step in an £25m ($50m) investment plan that hopes to capture 10% of the Indian beer market by 2012.
In its first seven years, Cobra was brewed in India and imported to the UK. Now it's mostly brewed under licence with Wells & Young's in Bedford, with a sizeable amount coming from SABMiller-owned Browar Belgia, in Poland.
With brewing capacity at Wells & Young's plant running close to full and the licence to brew in Poland expiring in a year's time,
McKeon concedes that supply will soon be an issue if Cobra achieves its growth targets.
"We are reviewing all elements of our supply chain - everything from our raw materials upwards," he says. "And from this we will be able to streamline costs more effectively."
With everybody working to a common goal, there is no doubt that under McKeon little time will be wasted.
"Cobra doesn't have corporate hierarchies or bureaucratic management, which allows us to make decisions quickly and easily," he says. "Each person is treated as an individual, but the family ethic is never far away."
McKeon's CV
Adrian McKeon joined Cobra Beer with a wealth of drinks-industry experience behind him. A former Constellation Brands board member, McKeon was subsequently
appointed managing director of Allied Domecq Wines. Following its acquisition of Allied Domecq brands in 2005, McKeon became managing director of Beam Global Spirits & Wine; in his first 18 months he
managed to grow company profits by 26%.
McKeon on...
The rise of imported beers
"The onus is on the brand owner to make sure their offering connects with the consumer. I don't see the beer market in segments - if you make a good product and sell it well, people will buy it. The days have gone when you could bring in a beer and just expect it to work on its own. You need financial backing to bring a brand to market - and that's true of most drinks categories, not just beer."
Smoking ban
"You have to remember that for every
person who smokes, there are three people who don't. Of course I think it has impacted on the UK on-trade and will continue to do so. How the trade and the licensees react will determine what happens to their
businesses. Everyone's talking about the food-led offering, and of course the UK's biggest food-led beer is Cobra."
Supermarket discounting
"The really important issue facing pubs is the vast difference in beer prices between the on and off-trade. For a number of different reasons, the on-trade is going to have to justify charging the price it sets for alcohol. If you're charging a premium price for your alcohol, you must have a premium offering - and that comes with glassware, PoS, correct serve and so on. Pubs should follow the example of coffee-shops: they are places where people happily pay a
premium on coffee, and quality is the
premium driver."
