Lunch with Karan Bilimoria


October 12, 2007

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Cobras eventually get their prey and that’s what’s keeping this successful UK brewer going despite limited luck in India and none in the US or China.

“Kingfisher.” Karan Bilimoria’s ears perk up in an instant. A group of Japanese men sitting behind us, along with their host, a Sikh in a pink turban, have just said in one voice what beer they want to down. And, horror of horrors, it isn’t Bilimoria’s Cobra, though it is available in the restaurant. In fact, we are washing down succulent kebabs with it. Bilimoria quickly calls a waiter and asks him to serve the Japanese his Cobra beer instead, writes Bhupesh Bhandari.

At the end, the Japanese diners at the ITC Maurya Sheraton’s Bokhara — the restaurant made famous by the Clintons — stick to Kingfisher and increase Cobra’s sales by just two bottles. Not enough to help Bilimoria achieve his dream of leadership in the 100 million-case (of 12 bottles each) Indian beer market, ahead of United Breweries, SABMiller and others.

Bilimoria is best known for his success with Cobra in Britain, especially in the Indian restaurants there. The brand, he claims, is now worth around $300 million (Bilimoria had bought out Cobra co-founder Arjun Reddy for a fraction of this in the early-1990s).

He is active on the social and political scenes as well. He is a member of countless charities and is the first Parsee member of the House of Lords. His mobile phone’s ringtone is the Big Ben chimes — in case it rings in the house, people may think it is the clock!

These engagements bring him to India frequently. So does family: he has a grandmother each in Mumbai and Hyderabad, while his mother and brother stay in Dehradun. And now it is also business that will see him spending more and more time in the country.

Bilimoria’s priorities are shifting. He is now looking at India to grow Cobra volumes and join the big league of brewers. In 17 years, his sales in the United Kingdom have slowly, though steadily, inched up to five million cases. In India, he has hit three million cases in two years — one year ahead of target. “India is at an inflexion point, its per capita beer consumption is set to double,” he predicts, squeezing a slice of lemon liberally over chicken tikkas and some extra helping of cucumber.

At the moment, Bilimoria is small in India with a market share of just 3 per cent. His beer is bottled at two locations in Rajasthan and Punjab by Mount Shivalik Breweries. But he has plans to ramp up the production. First off the block is a brand new unit in Punjab in association with a local player. This will be followed by three more breweries, one each in the south, west and east. “We are also looking at an acquisition,” he says.

We are being served prawns that appear to have been done nicely in a tandoor. Bilimoria offers to serve me one. The prawn lands on my plate alright but some masala flies on my shirt. Bilimoria quickly asks the staff to get a towel with some lemon juice to remove the stain. They offer to get me a new shirt and dry-clean the one I am wearing by the time we finish lunch!

Bilimoria has won innumerable business awards. Still, he remains a one-brand wonder, his critics will tell you. He did launch a brand called Krait (another dreaded snake from the cow belt) in the US but is candid enough to admit that it has not met with success. “Does it mean there isn’t much life left in the brand?” I ask him. Bilimoria nods his head.

Bilimoria had launched Cobra in the US in 2002 but quickly realised that Anheuser-Busch had a brand called King Cobra in the market. He then decided on calling it Mogul. Just before the launch, he found out that a small brewer based out of Oregon had the rights to a brand called Mogul Madness. Finally, in 2004, Billimoria launched Krait.

With Krait sales flat, Bilimoria says he is talking with the owner of the King Cobra brand to come to some sort of understanding for the US market. Plans are afoot, he adds, to develop other brands also. “More reptiles?” I query. “No. Could be others as well,” he says. We cut into the grilled pomfret. Bilimoria orders some more cucumber.

As he pours me more Cobra, I ask Bilimoria about the “Tandoor” controversy, which was his first lesson that a businessman needs to hedge himself against unforeseen business risks. Billimoria had an interest in a magazine of this name in the UK. In early 1998, it ran an article questioning the standards of service in the Indian restaurants there.

Soon, it had the restaurant owners breathing down his neck. And they decided to boycott Cobra. “Our growth fell from 70 per cent to less than 10 per cent,” says Bilimoria. It took him several months to convince the aggrieved entrepreneurs that he meant no harm.

The next course of our meal arrives: the famous Dal Bokhara and mutton seekh kebabs with rumali rotis. Bilimoria tells me that after that incident (he now has no financial interest in the magazine, though he advertises in it), he has deliberately reduced his dependence on the Indian restaurants. This sector now contributes to not more than 40 per cent of his sales in the UK.

Bilimoria has co-authored a book called Bottled for Business: The Less Gassy Guide to Entrepreneurship. In the book, he makes his ambitions to enter China clear, which has turned out to be a huge market for beer, and South Africa. When I enquire, Bilimoria admits that his China plans are off, though Cobra is doing very well in South Africa. South Africa, for the record, could well be the toughest beer market in the world with SABMiller lording over a market share of over 95 per cent.

Both of us have taken multiple helpings of the Dal Bokhara. The seekh kebabs are heavy and neither of us goes beyond the first. I remind Bilimoria of another risk to his business. For long, Cobra has appeared as a one-man business. “Do you have sufficient management bandwidth?” I ask. Only too aware of the perception, Bilimoria says that he has hired top professionals from Beam (formerly Allied Domecq) and PepsiCo at high salaries.

As we reach the end of our meal, I ask Bilimoria if he has ever been approached by Indian brewers for acquiring his brand. I quickly rephrase my question, before he can answer: “Hasn’t Vijay Mallya ever offered to buy you out?”

After pondering over it for a while, Bilimoria says that in the initial years, he was approached by two parties with such an offer. One of them, he suspects, was enquiring on behalf of Mallya. “We now sell many times more than Kingfisher in the UK,” he says, the glint of achievement unmistakable in his eyes.