Profile: Bulmers and Cobra - Brewing up a profit

And so too did Bulmers, the UK’s largest cider producer, until around two years ago.

Founded in 1887 in Hereford, Bulmers has plodded through the centuries, managing to keep its head above water in the competitive world of alcoholic drinks.

But things started to change in the late 1990s. In January 1998, Mike Hughes, former managing director of Guinness GB Brewing, took over the reins as chief executive and launched a two-year project to introduce new work cultures in a bid to shake the company’s fusty image and haul it into the 21st century.

The strategy to make Bulmers ‘The Place To Be’, as Hughes had dubbed his project, involved eliminating the traditional commander-to-control hierarchy.

The old-fashioned line management system in the factory has been transformed into a team structure. A massive refurbishment project is currently nearing completion in which Bulmers’ warren-like offices have become an open-plan environment with break-out areas and coffee lounges scattered around.

Not even the chief executive has his own private office.

The innovation was pushed even further by Hughes who encourages job-swapping and use of first names and a full-week dressdown code. It is not an unusual sight to see him wandering around the factory helping solve problems and chatting with the workers.

The project paid off and this year, Bulmers was rewarded with 34th place in the Sunday Times list of ‘The Top 50 Best Companies To Work For’. Even the company’s top brand, Strongbow, the UK’s 10th best-selling alcoholic drink, is enjoying a new image with the help of adverts featuring Johnny Vaughan, former Big Breakfast presenter and comic.

A key player in the company’s reinvention, and someone who saw the dramatic transformation from the ‘old’ Bulmers to the new image of the 21st century, is UK finance director Lesley Jackson.

Chartered accountant Jackson was headhunted for the job in 1997, and with her eyes wide open took up the challenge. Three-and-a-half years on she says it has been much better than she ever imagined.

‘It’s been a great time at Bulmers. I’m having a lot of fun. It’s been quite a dramatic period of change with Mike at the helm and I think he’s done some tremendous things to the business. And I think as an individual I’ve learnt an awful lot as well,’ she says.

After qualifying as an auditor with Peat Marwick, now merged into KPMG, she went to work in the internal audit function at Cadbury Schweppes for 18 months.

Since that first job Jackson’s professional trajectory has given her the chance to experience the commercial, managerial and financial sides of business.

Following a short stint with the Sears group, Jackson moved to Dairy Crest Dairies where major restructuring was being undertaken. ‘There was a lot going on – site closures, new sites being opened and mergers.

I learnt more through the disaster situations than through the smooth-running situations,’ says Jackson.

Four years later she moved to chemicals company Albright and Wilson, where six weeks into the job she was promoted to the role of commercial manager. She ended up spending 14 months in Belgium looking after the sales managers in continental Europe before coming back to the UK to help with the company’s flotation.

‘As a result of the ensuing restructuring I became European financial controller,’ explains Jackson.

Jackson’s time as general commercial manager gave her the opportunity to look at a business from a different angle. She says it made her a better accountant.

‘A lot of accountants tend to look at cost minimalisation and low risk. They tend to have a more conservative mindset. I became slightly more maverick in this sense,’ she says.

It was this broader outlook on business and varied skills-sets that gave Jackson the edge over other candidates for the role at Bulmers.

With experience at two drinks companies under her belt, she was more than prepared. ‘The only difference with alcohol was that we don’t serve schools and old people’s homes,’ she says.

Part of the company transformation involved launching Bulmers into cyberspace.

But, the company did not just want to set up a ‘brochure-type’ website that was of little use to its clients. ‘Having had non-financial work before, the commercial side of the business interests me and I think he (Mike Hughes) saw I wanted more, so he gave me the challenge of looking after e-commerce about 18 months ago,’ says Jackson.

Initially she had to devote the majority of her time to the e-commerce side of things, but after recruiting the right people ‘with passion’ things have gone swimmingly.

Jackson now dedicates 20% of her time to e-commerce and the remainder to her financial role. The beauty of her joint role, she says, is that she lives in a parallel universe whereby when things get too hectic on one side she can move over to the other.

Bulmers has not just transformed how it does business internally, but its horizons are broadening to sell beer – it is the UK’s supplier of the Jamaican beer Red Stripe and Spain’s San Miguel. And plans are afoot to begin brewing San Miguel in the UK this year with the ultimate focus of putting it on draught.

Pubserve.com is another example of where Bulmers wants to be.

An alliance between Bulmers, Brake Bros, The Beer Seller and King UK, Pubserve.com was established to provide financial, logistical, marketing and sales resources to Britain’s 130,000 licensed outlets. The supporting infrastructure to the website now includes over 100 delivery depots, about 1,000 vehicles and some 1,000 sales and telesales employees.

Tim Furse, Bulmers UK managing director says: ‘It is this structure where major non-competitive suppliers have come together to service a single industry via the internet, that is unique in the licensed trade and provides a new route to making b2b e-commerce viable.’

The recent success of SideKick, a novelty liqueur product launched last November, has been so great, says Jackson, that plans to launch other products this year have been brought forward. Bulmers has kickstarted itself and is moving with the times, or perhaps ahead of them.

And with the recent Competition Commission’s ruling that Interbrew’s acquisition of Bass Brewers ‘may be expected to operate against the public interest’ the current climate is ferocious. The commission ruled that the merger would give Interbrew ‘between 33% and 38%’ of the market, making it Britain’s biggest brewer, leading to ‘an effective duopoly’ with Scottish & Newcastle.

As Jackson puts it: ‘I’d rather be part of Bulmers right now and facing the battle in the position we are in. We’re not huge, so we can move with agility.’

Visit www.Bulmers.com and www.Pubserve.com

BILIMORIA: BEER BITES BACK (and wine)

Karan Bilimoria’s business degree from the University of Hyderabad, India, was deemed to be less than adequate on his arrival in England in the early 1980s.

Obliged to do an accounting foundation course at the London Guildhall University, Bilimoria had to wait another year before starting his three-year training to become a chartered accountant, despite the fact Ernst & Young had already agreed to take him on as a trainee. But, he has proved these early doubters wrong. He is now head of a business that is one of the UK’s fastest growing companies.

Qualifying in 1986 as a chartered accountant with the ICAEW, Bilimoria went on to get a Masters in Law from Cambridge University’s Sidney Sussex College. Seven years after coming to the UK, he was around #20,000 in debt. But an idea had been brewing for some time since he arrived in England.

In the late 1980s and diving deeper into debt, he decided to realise his dream.

It was this prolonged thought-process that Bilimoria believes made his product so successful. It is also perhaps a dig at those who jumped on the cyber bandwagon aspiring to make a quick buck out of an idea that had popped into their heads overnight.

‘Building a brand is a slow process based on strong foundations,’ he emphasises.

In 1989 he founded Cobra Beer and started distributing his non-gassy beer to Indian restaurants in his 2CV. Realising the British had by then adopted Indian curries as their staple diet, and that beer had become its liquid complement, Bilimoria decided to develop a smoother, less gassy kind of beer.

The statistics say it all: every year we eat 200 million papadoms and 21 million kilos of rice in Indian restaurants. And the industry has an annual turnover of around #2.4bn and employs 56,000 members of staff.

‘The market was dominated by harsh, gassy Eurofizz beers, all poor partners to spicy food, so I wanted to produce a really good quality lager which would complement rather than fight against Indian food,’ explains Bilimoria.

In an attempt to set his brand apart, Bilimoria started to sell his Cobra Beer in 660ml brown bottles. The whole concept of eating Indian food lends itself to sharing and Cobra Beer’s founder, now managing director, thought it appropriate to enhance this aspect in his product.

Whether he created or simply filled a gap in the market, business is now booming.

Figures for year ending 31 July 2000, show an increase in sales of 52%.

Cobra Beer achieved its highest-ever monthly sales in November 2000, breaking all previous records as well as increasing sales by 65% year-on-year.

It is now exported from the UK to 21 countries in Europe and is sold in over 90% of Indian restaurants.

It can also be found in most supermarkets and off-licence chains. And it was the first Indian beer to be sold in Harrods. But his success has gone beyond bottled beers. Thanks to a #1m share issue in 1999 Bilimoria launched a major expansion into providing draught lager to the nation’s 8,000 curry houses. And plans are afoot to float the company in 2002.

Bilimoria praises the changing trend in the accountancy world to teach broader business skills. ‘They didn’t teach marketing and sales in my time,’ says Bilimoria. Indeed, he had to go through a process of trial and error. Initially, he says, the product sold well by word of mouth.

Despite the initial success without traditional advertising, Bilimoria had bigger plans for Cobra Beer. It was then that he enlisted Saatchi to conjure up a quirky advertising campaign. And the now ubiquitous Curryholic Dave was born.

The advertising campaign was a phenomenal success. And on the eve of the second phase of advertising in October last year launching Curryholic Dave and friends on the London Underground and buses, sales were soaring.

Bilimoria recently moved out of his comfort zone to launch a range of wines developed to drink with spicy foods. With more and more women visiting curry houses, the alternatives to drinking beer with a curry are limited.

When the waiter takes the order it is not Cobra Beer, bottles of which overflow most of the tables of lunchers at London’s Cafe Namaste’s, but a sample of his new wines Bilimoria asks for. ‘It is notoriously difficult to match wine with Indian food – in part due to the spices, but also because of the sharing nature of the cuisine. It is neither practical nor economical to choose a different wine for each of the different dishes.’

General Bilimoria, Bilimoria’s father, had noticed this and commissioned his son to seek out a wine to compliment spicy food. The wines, which take their name after Bilimoria’s father, are now sold in most of the country’s leading Indian restaurants as the house wine.

‘Within months of launching the 1998 vintage we had sold out. Sales have already surpassed our initial projections and within a year we have laid the foundations to become the biggest wine brand in the Indian food industry,’ says Bilimoria overflowing with enthusiasm. That #20,000 debt is but a distance memory now.

The company’s website is at www.cobrabeer.com.