Snakes and ladders

Originally targeting Indian restaurants in the UK, Cobra Beer has been available in the Middle East since 2003, gradually increasing its profile and reach

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By  Lynne Nolan Published  October 26, 2006

|~|COBRABODY.jpg|~|Cobra Beer is gearing up to introduce its non-alcoholic beer range in the Middle East and is currently in negotiations with an Iranian supplier. |~|Originally targeting Indian restaurants in the UK, Cobra Beer has been available in the Middle East since 2003, gradually increasing its profile and reach Worth AED661 million (US $180 million) in retail value, and with an approximate growth of 30% annually, Cobra Beer exports its products to 48 countries worldwide. However, Cobra Beer currently holds less than 1% of the Middle East’s beer market. The company attributes this low figure to the dominance of international brands. “It’s difficult to fight the big brands when they’re putting all of their efforts into being the market leaders and making sure they don’t lose market share,” comments Iqbal Ahmed, export manager, Cobra Beer. The company has only been supplying its 33cl, 5% ABV, regular Cobra in the Middle East since 2003, but already has a firm presence in Europe, especially in the UK, Ireland and Spain. “Our export markets have always been reactive, rather than active. We started out with no marketing budget in the Middle East, yet now we take that market much more seriously,” comments Chris Rendle, business development director, Cobra Beer. Established in the UK by Lord Karan Bilimoria CBE DL in 1989, Cobra Beer targets Indian restaurants, and although it is a smooth lager, it also aims to appeal to ale drinkers. In the Middle East market however, due to licensing laws, the company is specifically targeting five-star hotels and bars, with the hospitality sector accounting for 60% of Cobra Beer’s business in the region. Available in Dubai, Abu Dhabi, Bahrain and Oman — with Oman representing half of Cobra Beer’s total sales in the Middle East — its distributors include african + eastern in Dubai, and Spinney’s and CC International in Abu Dhabi and Oman. ||**|||~|lordbody.jpg|~|“Cobra Beer is attracted to the Middle East as it is a meeting point for East and West and is populated by high numbers of people from the UK and India, the places of origin and two of Cobra Beer’s biggest markets,” comments Lord Karan Bilimoria CBE DL, founder and CEO, Cobra Beer.|~|The production of the beer, takes place throughout Europe and India, with a brewing process similar to that of a normal lager. However, after the initial brewing process, ale yeast is added and a secondary fermentation process undertaken before it is bottled and placed in a warm room. Brewed at Charles Wells in the UK, Browar Belgia in Poland, and Mount Shivalik in India — which supplies the Middle East market —further production units are based in the Netherlands and Belgium. Cobra Beer also has offices in the US and South Africa to handle the growing number of emerging markets there. Cobra Beer’s ventures in India, now hailed as a cost-effective move for the company, initially accumulated extra expenditure due to further taxes being added for the transportation of its products across different states. “At the beginning we produced the beer in Bangalore, India, and at that stage it was an export only beer. We then moved production over to the UK in 1997, and for a short while, as part of our strategy, we exported beer back to India,” Rendle explains. The company’s current strategy though, involves producing beer as close as possible to new markets to ease logistic operations. “Cobra Beer is attracted to the Middle East as it is a meeting point for East and West and is populated by high numbers of people from the UK and India, the places of origin and two of Cobra Beer’s biggest markets,” comments Lord Karan Bilimoria CBE DL, founder and CEO, Cobra Beer. With customers including the One & Only Royal Mirage Dubai, Burj Al Arab and Le Meridien Abu Dhabi, the company works with food and beverage managers in order to raise Cobra Beer’s profile in a market where it faces competition, not just from large international companies. “When we first entered the beverage market we had one chief competitor, Kingfisher, which is a draught beer. We cost about $2 more than Kingfisher per case, so of course competition is not easy,” Rendle says. However, the company also produces King Cobra, an 8% ABV double fermented strong lager, which is packaged in a champagne-style bottle and is currently being shipped to Dubai. The company is also gearing up to introduce its non-alcoholic beer range in the Middle East and is currently in negotiations with an Iranian supplier. “The supplier is keen to introduce the non-alcoholic products, with both Iran and Saudi Arabia appearing on its trading sphere,” Ahmed comments. In order to cope with expected demand in the Middle East, and with Ahmed predicting the region to account for 10% of the company’s export market by the end of this year; Cobra Beer is also looking to expand its production facilities outside of Europe and Asia. Cobra Beer is targeting South Africa as a base for yet another brewery, as Rendle believes the dominance of locally owned breweries in South Africa will offer the company an opportunity to tackle a niche market in the wider Middle East and Africa region. “This will offer a good base to exploit the rest of Africa. At the moment we are just importing it there so this will help give us a real presence,” Rendle says. Rendle adds that the company is preparing for flotation on the UK stock market, with AED99 million ($27 million) positioned to fund the first stage of global expansion, concentrating on the Middle East, India and South African markets, a sure sign that Cobra Beer takes the Middle East seriously in its future plans. “The Middle East is crucial, not only in terms of volume sales, but as an important showcase among the global community,” adds Lord Bilimoria.||**||

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