— I was born in a little village in the forest in Québec Province”, says Dave Munger. “I graduated from university in Québec as a theologian. I came to Russia to go deeper into Byzantine patrology, but mainly to learn more about a country which I found so attractive. And this happened to be at the time of the default in September 1998, when many foreigners were leaving the country. But I had not come to earn money. I had decided to study theology simply for my own self-enlightenment, I was getting to know myself, looking for my way forward. At university we had a Russian teacher, a geographer. He drew an analogy between Québec Province and Siberia. I realized that French-Canadians and Russians were very close in spirit.
— Did you already know Russian?
— While still in Canada, I took a course and studied on my own using the textbook “The Russian Language in 90 Days”. And in Russia I read books by Russian writers. I acquired some dictionaries and began translating. And I learned the language in four months. I studied for a year in Lavra in Sergiyev Posad as a non-enrolled student, and then returned to Canada. There I started suggesting to Canadian companies that they could find sales markets in Russia. I got to know a lot of people and formed many contacts. And it was at a souvenir market in Moscow that I happened to meet my future wife. She was a student, aiming to become a chemical engineer. She was paying for her studies by selling birch-bark articles. My wife is a Muscovite, she doesn’t want to live abroad. So I started to look for a permanent job here.
The acquaintances and contacts I had made earlier helped me: I proposed to the owner of a company selling bijouterie that I should open a boutique for chocolates. He liked the idea. We started out together, but then I realized that my partner had no funds to develop the business.
At that moment I happened to see a magazine with an article by Andrei Korkunov, the founder of a confectionery company which is now well known. I wrote him a letter:
“Dear Andrei Nikolayevich, I have a project, I know quite a lot about chocolate, let me come and be your development assistant.” We met, and liked each other. Later he confessed: “I saw a man with burning eyes, which is very valuable.”
I started working as development manager. We produced premium class sweets under the trademark “A. Korkunov”. But they proved to be madly expensive, Then Andrei suggested: “Why don’t you become our chocolatier? I’m looking for a better specialist. I’ll pay for your training and you’ll work for me for three years.”
As a result of this, I studied under the world-famous master Jean-Dominique Gellé in the French Alps. And then, with Korkunov, I developed confectionery recipes. In 2005 we won a competition at the Salon du Chocolat in the Louvre, in Paris. The products of 170 of the world’s best confectioners were presented there, but our sweets with a filling of dark chocolate tasting of baitcha jasmine tea, developed by me, took first place. That was both an achievement for me, and the first time Russian confectioners had received such a high award.
— Why, in spite of this success and recognition, did you leave Korkunov?
— I had worked there for four years. But I left because I wanted to make chocolate truffles with fresh cream. However, it’s a special product, it has to be sold quickly. Andrei Korkunov was not interested in the idea. So I applied to “Wimm-Bill-Dann”
— And Wimm-Bill-Dann took a step towards the confectionery market?
— Yes. I spent two years there on the mass production of truffles with fresh cream (they were called Morand, after Chocolats Morand in Paris, where I had studied). That was how the company showed it was entering a new, more marginal category, on the border between the dairy and confectionery markets. But the project required a great deal of milk because of the high fat content of cream, and didn’t really fit the company’s profile, so after two years it decided to discontinue the experiment.
Then, in 2008, I made my first attempt to open my own business. I did not have enough funding, so a brought in an investor-partner. But that same year the crisis broke out, and the investor said: “Sorry, no money...”
So I had to look for work again, and I ended up in the “Konditerski Dom Vostok” (KDV – Confectionery House East), the biggest confectionery holding in Russia. And just as I had been all round Europe for Korkunov, I did the same in Russia for KDV.
— But you never gave up the thought of your own project?
— I continued to dream. For three years I prepared. At first I thought of opening a business in Canada, but in the end I decided to stay in Russia. Here I know the major suppliers and they know me. I also know the trading networks well. My decision was also influenced by the fact that in Canada they are more concerned about your education. And my documents showed me as a theologian.
— Why did you call the company “Theobroma”, but the trademark “Chocolatier D. Munger”?
— “Theobroma” is the scientific name for the cocoa tree. In translation from the Greek, it means “food of the gods”. I wanted the trademark to be the same, but the name was already patented. So were 50 others I thought of. Then the patent experts and my friends advised me: “Make your own name the trademark.” And that settled the question.
I had no problems with registering the enterprise. A specialist law company took care of it all.
— Did you have to invest a lot of money?
It requires about 500,000 roubles to open an atelier for handcrafted production of chocolate or sweets in Moscow today (without tempering machines). For this sort of production you will need stainless steel tables, racks, shelves, a refrigerator, a freezer, a microwave and special dishes. But it would be difficult to cope with large orders without tempering equipment. Therefore, if you plan to open a chocolate atelier with several tempering machines, an oven and the necessary furniture, after leasing premises of about 100 sq.m., you will need considerably more, as much as 5-7 million roubles. If you plan to produce chocolate articles, franchising would be an effective incentive. It would give the entrepreneur starting out a tried and tested way of doing business, an existing brand and quicker access to the market. After all, we are selling a unique natural product. Therefore our atelier is starting a franchise.
The recoupment time of such a business will depend on the number of orders you can attract. If you’re aiming for an average bill of 300-500 roubles and a small flow of customers, it would be hard to calculate when you will recover your entire investment. But if you are after big corporate orders, such an atelier will pay for itself in about a year.
For reference: a good-quality 20-litre Italian tempering machine costs about €15,000 today.
As for specialists in our field. there aren’t many in Russia at present. Therefore the person in charge of such a production facility must check all the preparation processes, and be able at any moment to engage in the chocolate production process, so he must have a thorough knowledge of the recipe.
What’s good about our business? The fact that you can actually begin with little, and develop gradually to achieve real success.
— All my savings for the past 12 years, but I won’t tell you the exact amount.
— How did you find premises?
— It was difficult. But the further out from Moscow, the easier it was. In Moscow itself, leasing is very expensive. But I have taken two comparatively cheap places in Pavlovski Posad. True, I did have to pay for refurbishment myself.
— How many people work for you?
— I currently employ 10 people. But I do all the marketing, design, technologies and supply work myself. I did not take on any experienced confectioners, because it is easier to teach than re-educate. For production, I looked for clever, energetic and honest people whom I could trust, who understand everything instantly, pick everything up easily and soak up knowledge as a sponge soaks up water.
— What do your staff earn?
— In Pavlovski Posad, they average about 12,000 roubles a month, and at my factory, 25-35,000.
— Where do you get your raw materials?
— Candied peel from Italy. I looked for other sorts in Israel, Turkey, China and South America, but I’ve stayed with Italy. They grow better fruit there. Cocoa beans from the best plantations in Ghana, where they are grown without pesticides or any other chemicals. Our chocolate is certified by “BIO Ecocert”. We make truffles from dark chocolate and fresh cream from cows. To add aroma, we use high-quality strong drinks from the best producers or natural extracts from plants. We present the truffles Japanese-style, without a chocolate shell. This is called nama, which means “very fresh”. The packaging is also Japanese-style: an “oxygen absorber” keeps the product fresh without preservatives.
— Is it easy to find clients in Russia?
— Phone calls and emails are no good here. Only one approach works: go in person, knock on the door and say: “Hello, give me two minutes to speak to the purchasing agent”. And then open the box, let them try the product and tell them about it. I don’t pay anyone to go into shops.
Whenever I want to convince a new client, I invite him to one of the best cafés in Moscow, where they have handmade truffles and the best candied peel in the capital. I put their products on the table with my own truffles and candied peel and ask him to try them. It’s simpler to sell products that can easily stand up to any competition.
We sell glazed candied peel in various shops. We plan to provide them to several chain stores. They are fat-free, and the shop price is 150 roubles for a 110-gram box. I hope there will be a great demand for them.
We supply truffles to a number of salons. The distributors is the “La Marée” company, a leading supplier of exclusive food products. In the 25 years they’ve been operating, we are the first Russian company whose products they have decided to offer in their gastronomic boutiques.
— How soon will your business be in profit?
The handcrafted chocolate market in Russia is small in comparison with Europe and the United States. The is connected with the consumption culture. In Russia, most people are more interested in factory products. The consumption culture for handcrafted products is only now being born. In the USA I know of more than 150 handcrafting enterprises making chocolate. But in Russia, only five. There is room to grow. And demand can give rise to supply, just as supply can give rise to demand. And the more players there are in this market, the more resources will be spent on developing it. Imagine 150 entrepreneurs spending $1000 each on marketing. That’s $150,000. A suitable budget. But in Russia, other things being equal, it is only $5000 so far.
Yet Russian consumers want something new. A Russian is attracted by the word “novelty”. As is a European. But they have strong traditions there. If it is the custom to buy a chocolate hare for Easter, you can guarantee it will sell well.
As for entering the business of producing chocolate from bean to bar, as handcrafters of chocolate would put it, this costs at least two million roubles in Russia. That’s for equipment and fitting out the premises, with a small stock of ingredients for the first quarter of the project’s existence.
I personally think the market in Russia has good prospects. Particularly in the crisis, when people are seeking replacements for quality products from Europe. After all, the demand for good chocolate persists, in spite of the general rise in prices. But in three or four years, I think there will be quite fierce competition in our segment too.
— I don’t plan to go into profit before 2017. I’m still hoping to earn something from the candied peel, but not from the truffles. They are the image of the trademark. I hope that in time the trademark “Chocolatier D. Munger” will become recognized in Russia.
— Do your plans include the opening of your own boutique?
— No. No-one’s succeeded in that, the rent eats it all up.
— Does your wife support you?
— She doesn’t like business, She thinks it’s risky. My sons are thirteen and eight. We don’t have our own apartment, we’re renting one. But at the same time, my wife understands that it’s better to try to make your dream come true than to regret later that you never did.
— Do you have favourite places for leisure in Moscow?
— I love parks where there aren’t many people, particularly the Botanical Gardens.
— Is Moscow a safe city?
— I was talking to a girl who works in the Canadian Embassy in Moscow. They pay her 1.8 times the normal salary, the same as in the embassies in Sudan or Afghanistan, which are the most dangerous countries in the world. But I can tell you that it’s safer to walk around in Moscow late at night than in Paris, London or New York. I feel safe in Moscow. I use the metro, nothing bad has ever happened to me. But the first day I was in a hotel in New York, someone stole my laptop.
— What would you say to foreigners intending to come and work in Russia?
— A lot of people come here “as foreigners” and don’t realize that they won’t be arrested unless they give good reason for it. But to those who have a head on their shoulders, I would like to say “Welcome!”.