The Accidental Russophile

Nice little Reuters story about American mini-garch Eric Shogren, owner of the New York Pizza chain (30 restaurants, $15 million in sales in 2005, and going strong) and various other business interests in Novosibirsk. Eric Shogren went into business in 1996 in Novosibirsk, with a modest investment of $150,000. Shogren tells a story of great success in the face of skeptics and the economic crash of the late 90s. These days his biggest headache seems to be a shortage of cheese – he needs over 20 metric tons of cheese a month for his pizza chain.

“I’m out here selling Russians pizza left and right. I’ve got people packed in my bar every night dancing to Chuck Berry music, and there’s people going ‘Do you think this’ll work?’,” said Shogren, grinning. “Some people see things that work in reality and wonder if they would work in theory.”

Shogren says you should never underestimate Russian’s dislike of spicy foods and their love of potatoes. Since arriving in 1996, Shogren has also opened a live music bar, a fine dining restaurant, a diner and a bakery, and he now employs 1,500 people in Russia’s third largest city, 3,200 kilometers (2,000 miles) east of Moscow.

“We should have known that people here are the same as they are anywhere else. They just want good, normal stuff,” he said. “When I first started in ‘96, I had to bring almost all the ingredients I used from the West,” he said. “Now almost everything I use is from Novosibirsk or from Russia. My cheese supplier just called me and said ‘My God, we’re not going to have any cheese for the next six months, Moscow’s got all the cheese.”‘

To provide an adequate supply of pizza cheese he now plans the most ambitious of his commercial ventures by building a 3,200-head dairy operation on the outskirts of Novosibirsk.

“At the very moment when the Russian economy is so hot, and the consumer class – the middle class as everyone calls it – is so vibrant, the internal industries are still kind of crumbling, and some of them haven’t been reformed yet,” he said.

For the cheese, Shogren will grow his own feed, import Dutch cattle, install equipment from Wisconsin and count on continued Russian economic growth.

“It’s happening, the processes are working. What I always tell people here is that it’s working maybe faster than we expected it to.”

Never underestimate Russians dislike of spicy foods – I couldn’t have said it better myself. I would add, never dislike their disdain for vinegar either.

Reportedly, Shogren’s proposed 3,200-head dairy will be the largest modern dairy in Russia. Difficult to tell what success he is having with this dairy, as Fortune magazine reports that he broke ground on the project in 2004, with a planned opening in 2006. However, this 2007 story implies the project hasn’t yet been completed.

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