Cobra Beer is one of the UK’s most popular beers. Founded in 1989 just outside Fulham in London it was designed specifically to be consumed with food, with its founder Lord Karan Bilimoria wanted to create a beer that would not leave people feeling bloated if they drank it while eating a curry.
Three decades later the brand is now sold in more than 40 countries across the world and generates $250m annually. It is also the most popular beer in UK Indian restaurants.
However, when first launching the brand this success seemed light-years away and with no marketing budget Bilimoria created his own approach.
He explains: “I call it breakthrough marketing. I knew that even if we did get onto supermarket shelves we would have gathered dust because nobody would have known the product as I didn’t have the budget to advertise. So we decided restaurants would be our base and scale from there.”
Bilimoria went to the big-name restaurants first, meeting with owners face-to-face to convince them to sell his beer. He then used their names to persuade lesser-know Indian restaurants to stock the brand as well.
“The only item of marketing I had was a flimsy folded tent card. We printed the story of Cobra in green and black: why it was different and where it was produced,” he says. “We also differentiated ourselves by having the double sized bottle. Authentic Indian beer bottles are 650ml so we played on that as there was nothing like it in the market.
“Initially it was a big obstacle but you learn to convert those obstacles into opportunities. We used that authenticity and the bottle stood out on the table so people across the restaurant would be curious and order it. It would spread like wildfire around a restaurant.”
Building brand loyalty
His approach worked, but Bilimoria believes that if he was launching a new beer in 2018, rather than 1989, it would be easier.
“It was a real challenge for us to raise the finances but now you have things like crowdfunding. When I started out we had to post 7,000 letters whereas now you can email. Also when done well social marketing is far more cost effective,” he explains.
The strongest way to build up a brand is for someone to discover it because this builds loyalty. We’ve been very careful to never commercialise our brand and to ensure our quirkiness and edge goes through all our communications.
Lord Karan Bilimoria, Cobra Beer
Cobra couldn’t afford above-the-line advertising for eight years but Bilimoria believes it helped the brand grow in a more stable fashion .
He says: “The strongest way to build up a brand is for someone to discover it because this builds up brand loyalty. We’ve been very careful to never commercialise our brand and to ensure our quirkiness and edge goes through to all our communications.”
Listening to customers
Cobra Beer might be famous now, but it’s name was actually a last-minute addition. It was originally going to be called Panther, but just as it was about to hit the shelves, its founder Lord Karan Bilimoria did some research with consumers and found people didn’t like the name.
Even now Bilimoria, who is chairman of the business, doesn’t understand why Panther didn’t work. “There is no logical explanation for it but we listened and redesigned everything to Cobra and it was the best decision I ever made.
“I learned that you can come up with an idea but you should never go through with it until you’ve tested it with consumers first. The Cobra brand has worked incredibly well and become our most valuable asset.”
He credits the strength of the Cobra brand with helping the company survive a series of financial problems in the mid-2000s. While it was still increasing sales at a double-digit rate, the focus on growing sales rather than concentrating on the bottom line saw it end up £26m in debt and with borrowings from venture capitalists attracting interest of 15% CAGR.
Eventually, in 2009, it went into administration owing an estimated £75m to suppliers. But it was rescued through the formation of the Cobra Beer Partnership Limited, a joint venture with Molson Coors.
It has gone on to great success. It has a market share of 98% in Indian restaurants in the UK, according to the BBC, and growth has averaged between 7% and 10%.
That doesn’t mean Bilimoria is resting on his laurels. Cobra is set to launch a new marketing campaign imminently and has new products in the pipeline. And despite his novel approach to marketing, Bilimoria describes it as his “favourite area of the business”.
He says: “I love it. I love the creativity and innovation aspect of it. When I was at school I always did well academically but I was told I wasn’t very creative because I wasn’t very good at art but being an entrepreneur has allowed me to be creative.”