Growing abroad in the food services industry is challenging: local tastes and flavours, local food rituals, local religious and cultural constraints, local legislation on safety and quality. Add the perishability issue, high transportation costs and constantly changing cross border tariff and non-tariff barriers and you receive a perfect recipe of a business context for “fortune favours the bold” type of people. Exactly how I would describe Alexander Blanc, a Russian-Israeli, whom I met in 1999 in Milan when we both worked in management consulting.
Today we discuss the differences of doing business in three different locations – Moscow, Singapore and Bucharest – for Culinaryon, an international culinary school, the “Disneyland of culinary schools”.
Alex, what does it mean to be an entrepreneur in a service industry in Moscow?
Our company, Culinaryon, is organising fun and hands-on cooking corporate team buildings (for employees and clients), parties for adults and kids and also “open” master classes, where anybody can buy a ticket and join. Russians are cool but tough clients: they like to party but are very demanding and attentive to details, especially in the premium segment where we operate. The business context is highly unpredictable: you literally don’t have a clue of what might happen tomorrow. When we started in 2012 the exchange rate was 1 USD to 30 Roubles, in 2015 it jumped to 70 Roubles. Add food sanctions and embargo to import some important ingredients, and you get the picture. An average restaurant bill in 2012 was 3500 Roubles and it remained more or less the same until now. Culinaryon managed to retain its double digit growth rate, in USD, despite currency devaluation, sanctions and recession.
How did you start in Moscow?
We started with two cooking studios in 2012, now in Moscow we operate 7 studios and do up to 260 events per month. Up to date we did over 6.500 events, and in Q1 2017 we did an average of 7 events every day. Events can be from 2 to 200 clients, as our modular design enables to unite studios. My partners and I took care of every detail to create an inspiring working culture where employees would treat their jobs the way parents treat their kids, not like paid-per-hour caretakers that arrive in the morning and leave in the evening and sleep peaceful thoughtless dreams in- between. In the service industry, happy and genuinely engaged employees make happy customers. Can you imagine an organization where employees check-in when they arrive at work, post Instagram pictures of how much fun they have at work? Well, it’s us!
It is harder to get to Culinaryon than to be accepted to Harvard (in the last 12 months we received 11.000 CVs and hired only 109, while HBS acceptable rate is 5.4%). The average age at Culinaryon Moscow is 24, the love what they do and share this love with the clients, who leave “outstanding” reviews on major websites (we are #1 in Tripadvisor ‘Things to do” in Moscow), and internal anonymous feedbacks average 9.5 out of 10. Moscow clients are tough and do not easily let themselves go and say that they liked the experience, but if you manage to create a “wow” effect people will come and, importantly, on the day after the party will tell their friends how they enjoyed it.
How exactly does one make millennial employees happy in Moscow?
The millennials are gamers, they are not afraid to make mistakes, they are entrepreneurial, they value competences and coolness rather than hierarchies, they request fragmented bits of information and fast responses. At Culinaryon, the business processes can be described as “planned spontaneity”. We have rigorous processes, tools and systems tracking customers’ and employees feedback that is linked to the event and people who were conducting the events. Clients can choose from a variety of 60 menus engineered to be balanced in terms of taste, fun and food cost. On the “spontaneity” side, we empower and delegate to employees, leaving space for employees’ creativity and problem-solving capabilities: each event is unique and if employees learn to “own” the event, they solve the uprising issues and are not punished for mistake, as we encourage them to become managers rather than messengers.
And we take our 360° feedback really seriously: 2000+ observations for 100+ employees twice a year. The results are discussed immediately, and have material and direct impact on promotions and dismissals - every voice is heard. Top management and shareholders publicly show their 360° feedback results during our meetings with the employees to encourage openness and show that this is an opportunity to grow rather than a fear moment. It is not easy and at the same time it is the only way to gain respect from the millennials who appreciate and respect the behaviours and actions rather than formal hierarchies.
How Culinaryon’s Singapore opening was different?
The business context in Singapore is friendly, transparent and efficient for start-ups. The toughest part was to build the team: the unemployment rate is very low, students are not eager to have part-time jobs. And the cultural context is poles apart from Europe. Cooking is generally not perceived as fun, and our business is all about fun cooking together. As a valid substitute for cooking, Singapore offers many options: tasty street food, rich offering by restaurants or qualified living-in domestic help responsible for family meals for wealthy families. Moreover, in Singapore people are less used to celebrate birthdays compared to Italy or Eastern Europe, which is an important part of our business in Moscow. In Singapore we focus on corporate events and... on skills improvement. Singapore government gives its residents an annual grant of 500 SGD (about 340 EUR) equivalent to spend on“skills development”. We at Culinaryon did all the necessary steps to qualify as a “skills developing” culinary school and our clients may obtain a reimbursement of their cooking lessons, and our pastry class ranks as top 10 among 16.000+ offers.
The services of Culinaryon are global and local at the same time: it is a fun cooking school with a good variety of international recipes which in every location still should adapt to local tastes. In Singapore, more than in Moscow, we are facing the challenge of religious constraints. During the preparation of corporate events, our clients are often making requests to avoid recipes and drinks that are not suitable for Muslim and Hindu religions.
And what about your next opening is in Bucharest with its one tenth of habitants if compared to Moscow..?
Actually, Bucharest is hosting many European headquarters of multinational corporations and has faster Internet than the United States. The average restaurant bill is similar to the one in Milan. Romania has a respectable wine and culinary cultural heritage. Romanians, similar to Russians, enjoy going out and celebrations with friends. It all is making us optimistic about this new opening, and we see strong demand among our initial meetings (from Unicredit, who approved the financing for 5 year to appliances manufacturers to cue to become our preferred sponsor). This is why we open there with the largest Culinaryon so far, with 1.200 sqm under one roof.
Looking back at your experiences, can you think of any “so what”s for yourself and for our readers?
Travel and enlarge your horizons – this is the most important thing for an entrepreneur. The main limitations are those in our heads. It is amazing how by visiting and studying in person apparently unapproachable markets you slowly start understanding that impossible is nothing!