Just the Answer – Adrian McKeon, Cobra Beer
In June last year, Adrian McKeon gave up his position as managing director of Beam UK to become CEO of Cobra Beer, the fast-growing Indian beer brand. Jessica Harvey spoke with McKeon about his first six months in charge, the change of culture and what the future holds for the brand.
just-drinks: You have been with Cobra for six months now. How have you found the transition from Beam?
McKeon: Cobra is a brand I've admired for a while; it has got a magic associated with it. I think that has got a lot to do with [the owner] Karan Bilimoria. There's something incredibly exciting about joining a smaller, more entrepreneurial, faster moving, less bureaucratic, quicker decision-making environment, than working for a big global corporate company where things can sometimes be too slow and sometimes too bureaucratic.
j-d: How has business been during your first six months in charge?
McKeon: Fantastic. Business is really good against the backdrop of a pretty depressed [UK] beer market. The beer market in general is not in good shape; obviously it has been affected by the smoking ban, so the on-premise position is not quite as robust as it should be. Therefore, people are going out less and spending less.
People are being slightly intimidated by what's happening economically. But our performance within that is superb. Our business in December was up 48%, so we're in pretty good shape. In the last six months we've put together a really top-notch management team. We've carried out a strategic review of what we're going to do for the next three years and we're set to go.
We've built a business plan that looks to double the growth trajectory and take us into a position where we would become a top ten premium lager brand within two years. That would effectively build our [UK] revenue to GBP100m (US$197m).
j-d: What are your key strengths in the UK and where are the opportunities?
McKeon: A major part of our growth over the last couple of years has been in the off-trade in the UK. After solidifying a platform in Indian restaurants, we moved into the grocery sector and our brand is growing at about 80% a year.
There is an opportunity for us to take our brand and sell it as a mainstream lager in pubs, clubs and hotels in the UK. Our target is to get into 20,000 new outlets in the next couple of years. To do that, we're going to put in place a major marketing programme, where we'll be spending GBP14m per year for the next couple of years.
j-d: How is that going to be executed and when will it begin?
McKeon: We're just finalising our media plan right now, but it will be across all media. We're looking at online and examining how we can interact best with our target consumers. We launch in April.
j-d: Who is the Cobra target consumer and how do you plan to pitch the brand?
McKeon: The target consumer is a young male in his 30s, an ABC1 consumer. That's the bullseye consumer. Historically, we have been involved with film quite a lot. That element of our campaign will continue. The Cobra Vision [sponsorship] will certainly be part of our thinking in the future. In all elements of cinema, what we've done is encourage young and inspiring filmmakers by helping them get started, as well as sponsoring movies on ITV2, ITV3 and ITV4.
j-d: Will the brand be repositioned?
McKeon: We've just finished the work in terms of our positioning. We have just appointed Landor, who are our new design agency and will help us conduct a view of our branding and packaging, so you can expect changes there.
j-d: When will the new packaging be launched?
McKeon: That will probably be in the latter half of this year. We're still in the process and haven't got a finalised cost. It's not a radical overhaul; it's just some fine-tuning to make sure that it's relevant for the mainstream market.
j-d: Are there any plans for a draught extension?
McKeon: Yes definitely. It's part of our plan. Of those 20,000 outlets, we'd be expecting 3,000 of them to be selling draught across the UK, but it's going to be very targeted outlets against a targeted consumer.
j-d: With rising costs and the smoking ban, the UK beer sector appears to be a tough place to be right now. What is your view?
McKeon: From what I've seen there tends to be a lot of despondency and a little bit of doom and gloom and I think that's not really the way to look at it. The responsibility lies with the major players to find solutions to the barriers that may be in the way to grow. I think that's why a lot of different innovations, different ideas and a more positive approach, investment in terms of marketing and clever investment in terms of new product development are the ways of working.
I think if you take a fresh approach, the way some of our innovations have, like the way we've introduced the exotic fruit-flavoured Cobra Bite, then that's the kind of innovation I would suggest other beer companies need to get involved in.
j-d: What is the positioning for Cobra Bite? Are there any plans to launch it in other markets?
McKeon: It's far more in line with the female beer drinker and a lighter beer experience. The marketing is completely different.
We've had a very successful limited distribution, which first we'll grow for the UK, and we're taking it from there to other markets. It's in South Africa right now; we're just testing that out. We're testing in South Korea as well.
j-d: Outside the UK, where are you looking for growth for the core Cobra brand?
McKeon: Our core markets will be the UK and India. Our view is that we have to do things slightly differently, so we've got some markets that would not necessarily fall into the traditional growth markets or focused markets for beer. Some of them are European markets, but for us, South Africa is a big opportunity, so is Australia, so is South Korea and for the non-alcohol offering United Arab Emirates.
j-d: You described the acquisition of the Iceberg brewery in India as "an important first step". What are your production expansion plans?
McKeon: One of the key platforms for our growth in India is about establishing a continuous quality supply of beer to fulfil the demand that we have created. With that acquisition comes a licence in another part of northern India called Haryana, that will be a greenfield brewery that we're considering, and also a greenfield brewery site in the south of India. We will be building in both locations almost simultaneously and all three plants would have roughly the same capacity which will be 2.5m cases per year, with the ability to extend that to about 10m cases per year.
j-d: In conclusion, can you sum up Cobra's aspirations?
McKeon: Firstly, we want to become a top ten premium lager brand in the UK. We want to sell about 20m cases of beer in India and that would give us a better than 10% share over the next five years. We would like to take our brand and offer it to other markets and establish Cobra in key markets around the world. I think that's a pretty aggressive agenda.
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