Lord Bilimoria on...
Business rates – “It’s just completely out of control. Now all of the political parties are saying ‘we’ve got to reform business rates’ – well let’s see it happen. You’re hearing situations where people are paying higher rates than rent, it’s gone completely out of proportion and just becoming unviable. We’ve got to reform business rates. Let’s see – they’re talking about doing it, hopefully they will.”
Beer duty – “Compared with Europe we’re up to 13 times higher than some European countries. They’ve been pretty good, the Government, in trying to at least not increase the duties, but even where they are now they’re disproportionate and far higher than the rest of Europe. If we had much lower duties and it became more affordable, that would help in a big way.”
Cobra in pubs – “We really should be in far more pubs and gastropubs than we are. That’s what we’re really working on. Two years from now I would hope I can say we’re in hundreds of pubs and gastropubs with Malabar and with Cobra.
“The next 12 months are very much about embedding our new King Cobra. Early King Cobra was produced at about 7.5% ABV and it was always only in the big bottles, the double-sized Champagne bottles. It’s now at 5.2% ABV and in 375ml bottles. I think it has got huge potential across the board in every sector, including in clubs and bars.”
A decade after American beer behemoth Molson Coors bought Cobra to bring the recession-hit mainstay of Britain’s near-10,000 Indian restaurants out of administration in 2009, British beer is in the middle of an unprecedented swell of merger and acquisition activity.
Moves for Fuller’s and Greene King costing hundreds of millions followed deals, including Heineken purchasing a minority stake in Beavertown and AB InBev – now Budweiser Brewing Group – buying Camden Town Brewery.
According to the Cobra Beer Partnership’s chairman and founder of Cobra beer, Lord Karan Bilimoria this consolidation doesn’t show signs of slowing any time soon and, despite the obvious benefit of saving his company from administration, has worked “beautifully” in his case.
“Our entrepreneurial spirit and this huge giant, one of the biggest brewers in the world, working together,” he explains. “Of course, that does cause challenges, I want things done tomorrow and big companies will want it done next year – which is a healthy tension – but you get the best of both. You get all the professionalism and the strong financial grounding of Molson Coors combined with this entrepreneurial spirit where we get things done very quickly.
“I was recently with Ivan Menezes of Diageo – giant companies like that are constantly buying and that won’t stop. People like Diageo look after their brands very well. The danger is if we have consolidation and brands are neglected that is done for financial reasons where you treat beer as a commodity.”
Crossbench peer and Chancellor of the University of Birmingham, Bilimoria was elected vice-president of the Confederation of British Industry in June 2019. Next summer, he will become the first Indian, and first person from an ethnic minority, to lead the organisation of 190,000 members – collectively employing around 7m people – as president on a two-year term.
Yet despite an increasingly busy schedule, he has retained an undampened passion for beer and is heavily involved with the day-to-day running of Cobra – including a recent rebrand he explains was three years in the making.
“When you meet Pete Coors, he’s like me,” he says. “We’ve exactly the same mindset about our product, he’s just as proud of Coors as I am of Cobra. If you have consolidation that maintains that passion its great, but the consolidation where it’s commoditised is not good and brands get neglected. Fuller’s is a great British brand, same with Greene King – let’s see what happens but they deserve to be nurtured.”
With a family history of decorated military service in India and his maternal great grandfather a drinks industry entrepreneur before becoming a member of India’s House of Lords, Bilimoria arrived in the UK as a 19-year-old off the back of a degree in his native Hyderabad.
Staying at the Indian YMCA in London’s Fitzroy Square it didn’t take him long to tap into the great British pub.
“The first thing I did was put my bags in the room. Across the road was the White Horse pub – so I went straight to the pub. Sadly, it doesn’t exist anymore.”
These early trips to the pub sowed the seeds of what would eventually become Cobra Beer as Bilimoria found himself less than enamoured with the lager on offer in ’80s Britain, with a business plan crystallising while he was reading law at Cambridge and qualifying as a chartered accountant with Ernst & Young.
“I found them very difficult to drink,” he explains, “they were fizzy, gassy, harsh, bland, bloating – I just didn’t enjoy them on their own. I didn’t know how to cook when I came here so I’d go to Indian restaurants regularly and, of course, you would be given a lager beer. You’re thirsty if you’re eating spicy food and if you’re drinking a bloating beer it’s an uncomfortable experience and I couldn’t eat or drink as much as I wanted. A friend introduced me to real ale, which I took an instant liking to. I loved it and, to this day, I love ale. Yet, while I loved drinking in the pub I couldn’t drink ale with food – I found that, on the whole, they were too heavy, too bitter and didn’t go with any food – let alone with spicy food.
“I thought: ale drinkers hate fizzy lagers and when they go to Indian restaurants they’re forced to drink these drinks they don’t like – and they can’t drink ales because they don’t go with food. That’s when the idea started to evolve.
“I wondered: how can I create a beer that will have a globally appealing taste and appeal to anyone whether they like American beer, European beer or whether they like an ale or a lager? And it has to accompany all food, in particular, Indian food. I would go into pubs, order two different beers and a pint glass and mix them and experiment in the pub – I’d do that all the time. Nothing worked but I kept trying.”
Taking on giants
While ‘entrepreneur’ used to be a dirty word in Britain according to Bilimoria, by the time he and business partner Arjun Reddy – a friend from Hyderabad with whom he’d previously imported polo sticks to the UK – came to launch their beer business in 1989, the eco-system was right for Cobra.
“From the time I came here in the early ’80s, entrepreneurship wasn’t really celebrated or encouraged in this country – in fact, it was, quite frankly, looked down upon,” he explains. “Britain was not an open economy and, like it or not, Margaret Thatcher was responsible for encouraging entrepreneurship and opening up the economy.
“People from abroad like me were told we’d never get to the top, that there will be a glass ceiling – and they were right in the early ’80s.
“But as Britain opened up, it became more and more of a meritocracy, more and more of an aspirational economy where anyone can get anywhere regardless of race, religion or background.
“In terms of setting up a business the environment that I had was great, but I didn’t have access to things like Crowdfunding that exist today, I didn’t have the internet, which would have helped me so much.
“My business partner and I can remember literally sitting on the floor in the roof conversion on Fulham Palace Road which was our office and where we lived – one floor were the bedrooms, the other floor was the office and kitchen – folding and stuffing envelopes and posting thousands of mail shots to Indian restaurants. That’s what we had to do, it was expensive, it was manual and a lot of it went in the bin.”
Bilimoria’s warning that it takes a lot of guts to start and stick with a business seems particularly resonant to the modern beer industry given the dominance of big brewers and that more than 2,030 new breweries have opened in the UK since the year 2000 – on average, a new brewery every three days according to the British Beer & Pub Association’s Statistical Handbook 2019.
“If you’re going into beer business you’re going up against giants,” he says.
“Kingfisher had been here for eight years before we started, Carlsberg was in almost every Indian restaurant. We couldn’t afford branded beer glasses – we had a flimsy table tent card with green and black printing as our only item of marketing.
“If you’re going to start with that you’ve got to have faith and passion and belief in your product. You’ve got to produce something that’s different and better that’s going to help you to cross that credibility gap so people will have the faith to trust you, finance you, supply you, and buy from you.
“You need to produce something that’s different and better – ideally that will change the marketplace. Then, it’s important to do it with the right values and integrity. Better to fail doing the right thing than succeed doing the wrong thing.”
My favourite pub
The White Horse in Fitzroy Square, London, was my first pub but it doesn’t exist now. Now my local is the White Horse in Parsons Green. You go to the White Horse and you’re in heaven because of the setting alone. It’s got a terrace looking out at this idyllic, beautiful green where people take their glasses and sit out on a summer’s day. It’s great, it’s got good food, good beer, a great choice of ales – increasingly not only English beers but continental ones as well. I’m very lucky it’s on my doorstep.
Bilimoria nearly lost his rapidly growing business three times between 1989 and 2009 – with Molson Coors buying the recession-hit beermaker on 1 June 2009 to take the company out of administration.
“As a growing independent company, for us the biggest issue was always finance, raising money for a growing brand after starting with nothing,” Bilimoria says. “With Molson Coors, finance is not an issue because it’s so financially secure. The finance that was always a challenge for us, is no longer a challenge.”
The Cobra Beer Partnership – 50.1% owned by Molson Coors, and 49.9% by Cobra, with Bilimoria as permanent chairman – has seen global integration across sales, marketing, exports.
However, the “irony” for Lord Bilimoria is that he considers Cobra – winner of 111 Gold and Grand Gold medals at the Monde Selection awards since 2001 – a craft beer.
“I love the craft beer boom – it’s fantastic,” he says. “It’s just that because we’ve been established for almost 30 years and because of the scale of the brand now, people don’t perceive us as a craft beer, but if you think about what I did, how I started it, and the recipe.”
Bilimoria recalls lugging 30 bottles of “carefully selected” beer onto a plane to India as hand luggage for an early tasting session with Cobra’s head brewer.
“When I sat down in the brewery with the brew master Dr Cariapa in Bangalore, we tasted all the beers – that’s how I conveyed to him what I liked and didn’t. He said ‘to develop what I think you want, we’re going to need a complex recipe – we’re going to need to have not just malted barley, yeast, water and hops, we’re going to have to have three varieties of hops and we’re going to have to have maize and rice, and a complicated process to deliver this extra smooth, less gassy taste that you’re looking for with smaller bubbles’.
“It is far more intricate, and delicate, than virtually any other craft beer, and I’m proud of that,” he claims. “Then our variants, like King Cobra, made in Rodenbach – one of the Rolls-Royce breweries in the world founded by Germans in Belgium – is the only lager to our knowledge made with an ale yeast. I think this is the ultimate craft beer.”
‘Failing’ at IPA
Just under 30 years since he imported the first container of Cobra from Bangalore – Bilimoria adds that the now decade-old pairing with Molson Coors has seen the streamlining of its UK-based production.
“We used to produce beer at different breweries under licence – at one stage we were producing in Liverpool, Hartlepool, Bedford, packaging in Cheshire, as well as producing in Belgium, Holland and India – now our UK production is all consolidated at Burton-upon-Trent, with the exception of IPA Malabar which is produced at Burtonwood near Liverpool in Warrington.”
Spending time in the US – including more than a decade of study at Harvard University – exposed Bilimoria to the American craft beer revolution and the irrepressible rise of the IPA.
“I noticed these craft beers in America, a lot of them were IPAs,” he recalls. “They were heavily hopped – lovely aroma, very nice hoppy, bitter taste - but I found them very difficult to drink.
“Even over here the majority of craft brewers, 50%-60% of their sales are their IPAs. I thought ‘IPAs are really popular, but they’re difficult to drink, I sometimes struggle to finish a whole glass, and I can’t drink them with food because they’re just far too bitter. How do I develop an IPA that is as drinkable as Cobra?’ We set ourselves a challenge and, I’m not joking, we failed badly. Our first few trials we just couldn’t do it.”
However, after “a lot of trial and iteration” with latest launch Malabar Blond IPA – named after the western coast of Karnataka, India, the state of which Cobra’s birthplace Bangalore is capital – Cobra has tapped into the beer style that was sent from Britain to troops stationed in India.