LEVERAGING THE INDIA CONNECTION: COBRA BEER’S LORD BILIMORIA

By DIANE TONGE

From INSEAD Knowledge (http://knowledge.insead.edu)

The U.K. beer market is one of the most competitive in the world but that did not deter Karan Bilimoria, an expat Indian with no prior experience, from taking it on.

After three months of trials in India, a new recipe was found, and the new beer became a remarkable success story.

Since then, 46-year-old Bilimoria has also devoted his energies to promoting bilateral trade with India and a wide range of charitable work. He was named Asian of the Year in 2002 and four years later was made Lord Bilimoria of Chelsea.

He explains how the Cobra story really got going.

Bilimoria was convinced there was a gap in the market for a smoother, less gassy beverage and in 1990 brought out his first bottles of beer.

"I produced this beer that was in between a lager and an ale in taste -- the smoothness of an ale with the refreshing quality of a lager, which would enable it to appeal to ale drinkers and lager drinkers in the country with all food, and in particular Indian food," say Bilimoria.

He started his brewing business in Bangalore and then shipped it over to Britain by the container load.

"So we started selling it in the Indian restaurants as a base here in Britain, and then from 1997 we moved production to the U.K.," he says.

Since then, Cobra beer has been produced in Britain, and it's also now being brewed in Europe. However, three and a half years ago production restarted in India -- this time for the Indian market.

"We started with one licensing agreement in Rajasthan," says Bilimoria. "We now brew in nine locations around India, and we export to around 50 countries around the world."

In fact the beer has been so successful, he says, that sales have notched up a compound annual growth rate of around 40 percent over the past 10 years.

Bilimoria has been striving to promote world trade with India since 1993 when he was asked to chair the Indo-British Partnership which was started by then British Prime Minister John Major and his Indian counterpart Narasimha Rao, several years after the start of India's liberalization.

"The idea was, with India at that stage opening up, that Britain and India should work on a bilateral basis to make the most of that opportunity," he says. 

Since then, Bilimoria has been championing India. The turning point came in November 2006 when he was able to hold the first-ever U.K./India investment summit at Lancaster House in London.

It was then, he says, that the British government recognized the potential. Last year, British Prime Minister Gordon Brown, who was at that time Chancellor, announced the formation and funding for the U.K. Business Council during a visit to India.

Today, Bilimoria continues as the U.K. chair of the Indo/British partnership bilateral initiative and chair of the U.K. India Business Council (UKIBC). He says getting the UKIBC off the ground was an entrepreneurial journey.

"The experience has been to work with government and to actually convince government to make this a priority," says Bimimoria, "because five years ago, I felt like a lone voice in the wilderness saying: 'Look you've got to look at India. British business has got to look at India; it's a great opportunity."'

"Everyone was looking at China but no one was looking at India!"

He maintains that, even now, there is so much potential for business to look at India -- particularly for small and medium-sized enterprises.

When Bilimoria talks to groups in different regions in Britain such as the Midlands, he asks how many of them are doing business with India at the moment. "You get (only) two hands or three hands going up," he says.

He adds that people still have to be made aware of the opportunities, and how easy it is to actually go to India and how much support there is available. The UKIBC for example provides advice and a new "launch-pad" service for British companies wanting to do business there.

Bilimoria is confident that the UKIBC is a good example of the private sector and government working together: "Because on our own we would be completely ineffective."

"Similarly what we can do is add to the government's work and initiatives through what we do," he says. "The sorts of things we do now were never happening before."