INTERVIEW: No need to curry

Brimming with enthusiasm and drive, Cobra Beer’s new CEO Adrian McKeon tells Charlotte Hey about the challenges of adapting from wine to beer and taking the brand forward in the tricky UK market

Anyone who has ever met Adrian McKeon, CEO, Cobra, cannot doubt his enthusiasm and drive. When he’s “into” something, he’s really into it and there’s no escaping… you can run but you can’t hide – you know the kind of thing.

It’s a year since he took his position at the helm of Cobra and it seems that his enthusiasm for the task with which he has been charged has almost turned to zeal. He does admit, however, to having adapted somewhat, “It has been interesting and quite different from being in the wine trade,” McKeon reveals, “it’s a bit like playing football instead of rugby; the parameters are the same it’s just that the game is different. Bigger, tougher, much more consumer oriented than the wine business, sort of like moving into the premiership. Beer consumers know their brands inside-out, they’ve got the handle on labelling, producers, flavours and prices. You can’t afford to miss a trick.”

“It has taken me a while to adapt to the new rules,” he admits, “in beer, it is paramount that you understand the occasion and repertoire consumers have when it comes to drinking beer and where your product fits into that.” That being said, McKeon does see some similarities between wine and the peculiarities of the beer brand he is working with: “Cobra is a much more food-oriented drinking experience in comparison to the rest of its competitors and that gives it quite a defining point of difference; this makes it much more similar to the way in which wine is marketed.

“That point of difference and the success of the brand,” he continues, “are very much down to Karan Bilimoria [the company’s founder and chairman] and the way he has established the brand. Always concentrating on the quality of the product and marketing it to specific sectors. My challenge is to take the brand on to the next stage.”

Challenges ahead
Arguably, this might not be such an easy task given the strong affiliations the brand has with the Indian on-trade in the UK, especially when you consider that 70% of beer brands sell half of their volume on promotion in retail. But McKeon is more than aware of the challenges.

“This is a very difficult market in which to build value, our job in the UK is to take what has become a robust beer brand out of the curry context and start to secure bigger distribution in the broader on-trade. Two-thirds of all beer is sold in the on-trade and Cobra has to attack that market. Historically, yes, we have occupied a beachhead in the market with our strong Indian connections, and I believe we can play that situation to our advantage, especially when you consider the stats: 49% of males in the UK have had an Indian meal in a restaurant in the last four weeks and we have 97% distribution coverage in Indian restaurants in the UK,” he smiles.

The figures certainly stack up but current trading conditions in the UK, and for beer in particular, are not as favourable as other more value-driven markets. McKeon has some strong views on this matter: “The UK marketplace needs to be careful, big producers are realising that they can get more from other markets worldwide. Take the UK on-trade for example, where there has been a 10% decline, people don’t want to have to work with that kind of negativity. The major multinationals now look at the UK; steeper discounting, an on-trade in decline, the current government agenda on alcohol, in turn fuelled by the media agenda, and you can see why they will start to look at the UK with different eyes.

“As an industry we are coming to a crossroads and we have a responsibility to stand up and take a lead about the way we interact with government. It seems to me that, with the exception of Scotch whisky, our industry to date has lobbied pretty ineffectively. I don’t understand why the big players are not more united in their aims. Surely an approach from across the beer, wines and spirits sector would be far more effective than individual sectors? I mean, why do we have so many organisations – BBPA, WSTA, GVA – all lobbying on separate issues?

“I believe that the onus is also on the retailer to take a hard look at how they sell alcohol and how

they can change the way they sell alcohol.”

Despite all of this, Cobra has just launched a £14 million above-the-line marketing campaign to expand the brand’s reach in the UK, putting them in the top three this year in terms of beer spend.

But McKeon has not just been spending the last 12 months launching an ad campaign. Another of his primary tasks was to devise a set of values to manage the transition from Karan’s way of doing things and develop commercial and management criteria that would help to move the company forward in the future.

“The business had grown exponentially in recent years and knowing a man like Karan you’ll realise we were getting 20 ideas a day from him, which is exciting but has its challenges too. My role was to put strong commercial rigours in place across the business and introduce a viable decision-making process.

“We had to establish our core values,” he explains, “I know it sounds a bit American but we have around 400 people worldwide working for us and we needed to define what we were about.
“As we looked at the company we realised that from the company’s inception the common factor, the most important factor, has been those human values. So that was where we decided we should set the agenda for the whole strategy.”

Brand development
The review was not only internal, according to McKeon, “we also took a long hard look at our core markets and how and where we were operating. We looked at the brand and how we might re-define it and we also took a close look at our management capabilities. As a result we now have a fully defined and integrated company ethos. We’ve launched the development strategy for the brand and hired a few new faces – a team that would be able to deliver growth for the next stage of our development”.

Apparently, that development  does not include entry into the stock market as had been planned a couple of years ago: “We are still going to remain independent and the proposed flotation that was mooted is not going to happen. What were are concentrating on now is growth and building the brand and value in it. Our ultimate goal is to be a top ten premium beer brand in the coming years.”

Crucial to achieving that aim are the brand’s core markets. The UK is obviously one of them, the other, not surprisingly, is India. “The first time I went there I was like a child in front of a pile of sweets,” says McKeon’s, his eyes lighting up, “the opportunities are superb with per capita consumption still languishing at one litre per head. I mean, what more could you want? It’s so intriguing.”

“Our target is to grow to 20 million cases, around £80m revenue in the next five years – it might sound like a lot but when you consider that in the last 18 months we have gone from 100,000 cases in India to 2.5m you can see why we can afford to be ambitious. And with the distribution networks already in place, a team of 300 people on the ground and our first brewery now purchased, the sky is literally the limit in a market that is showing 27% growth year on year for Cobra, making us the fastest growing beer brand in India.”

McKeon puts this down to macroeconomic factors, “There’s a burgeoning middle class with a mean age of 27, the perfect age for beer drinking,” he grins. “We have so many points of difference, not least our Indian heritage. Add to that our reverse psychology when we market ourselves there as an international beer. The potential blows my mind.”

Going forward
Whether it’s a tough market, like the UK, or an inspirational one, like India, McKeon is up for the fight and is clearly dedicated to his team. “We have a great team here, they are good people to work with and there’s no politics, no agendas – a real sense of working towards a common purpose. The other great thing is we make decisions like that,” he says, clicking his fingers.

He’s equally dedicated to the company’s future, “Twenty years working in the drinks industry across sectors gives you an understanding of what can be done and the need to act quickly when an opportunity arises. You can’t afford to lose impetus, and in a company like this, where the ‘can do’ attitude is imbued into the culture,” he raises his hands, “I can’t help but be enthusiastic about what lies ahead."

 db © July 2008