Cobra founder's secret of success

Cobra Beer founder Karan Bilimoria sells 44m bottles of lager in more than 40 countries each year. His phenomenal success with the brand has earned him plaudits. Cobra, like many other start-ups that became global brands, had humble beginnings.

by Business Strategy Review
Last Updated: 06 Oct 2015

The business idea came from his dissatisfaction with the bottled beers he tasted when he came to London from India to study accountancy in the early 80s. The beer served in Indian restaurants was too "gassy, fizzy, harsh and bloating". Restaurant owners were missing an opportunity, he believed. It took a decade before he was in a position to put his idea to the test.

Bilimoria started out in the import-export business, using his Indian connections to sell imported polo sticks to Harrods in London. Jackets, pearls and other luxury goods followed.

Eventually Bilimoria began importing a lager produced by Mysore Breweries, but it didn't fit the smooth, premium lager category he was looking for. The solution was to have Mysore brew a new beer. The process was arduous - this was before email. Bilimoria received endless teletexts containing the phrase 'not possible in India'.

He eventually went to Mysore and with the brewer produced a lager with the right taste. The beer nearly went out with the name Panther, but two weeks before the first shipment the name was changed following negative market testing. Cobra was born.

Bilimoria had to deliver the product in his bashed-up Citroen. He started with the best Indian restaurants. "If the best restaurants stocked the product, we could say to the other restaurants, ‘Look, it's good enough for them, it should be good enough for everyone.'" Because Indian beer came in a larger 650ml bottle size, Bilimoria made a virtue of what could have been a problem, with eaters sharing the larger bottle between them. The idea caught on.

Bilimoria used his accountancy knowledge to find innovative ways to finance the company by using a major customer's unused overdraft facility as a guarantee for Cobra's bank. Cobra paid the fee for using the £100,000 facility and obtained the cash on delivery for effectively a low fee, while the customer was happy to buy in volume. This way Bilimoria could hold on to ownership.

Today the business is valued at £100 million, while Bilimoria has kept 67% of equity. The principles he applied to making the business a success were continuous innovation, going the extra mile, never giving up, being disciplined, perfecting his product and turning setbacks into opportunities. Most important was being different and better.

"I believe that however competitive a market is, however saturated it may appear to be, you can always start a brand, introduce a product, by doing things differently in some way, doing things better in some way and, in that way, changing the marketplace forever," he says.

Snake charming
Business Strategy Review
Winter 2006

Review by Joe Gill

Find this article useful?

Get more great articles like this in your inbox every lunchtime