— You have so many businesses in Moscow: you are a positive oligarch…
— I’m no oligarch, – laughs Vincenzo, – I am a working man.
— Well, OK: construction, repairs, Jacuzzis, furniture, they are all kind of related and that makes sense. But where does a restaurant come into all of this?
— Opening an authentic Italian restaurant in Moscow has long been a dream of mine. We Italians love good food. And I still love to cook. At home, when I can, I always cook myself: Italian dishes, pasta. My wife and children adore it. And they say I am a good cook.
The desire to open my own genuine Italian restaurant only became stronger over the years. Especially after visiting many similar establishments in Moscow.
The restaurant trade in Moscow is a very dynamic and precarious one: the competition is stiff and, consequently, risks are increasing. Just look at the ever-growing number of new establishments. And they keep on coming! No matter that, after a certain amount of time, one of them will disappear ignominiously from the capital’s choice of restaurants – waiting in the wings are dozens of new places. Each with their own “unique concept”.
The apparent ease in opening a new restaurant can sometimes catch investors out insofar as this business is not so much about original concepts or the way a uniquely formulated dish tastes, as about the economics, proper research, and analysing emerging trends.
For example, to open a restaurant in Moscow from scratch today would require an investment of about 30–50m roubles. Added to which there are staff costs (about 3m roubles a month). If all the right ingredients for the business’ development are there, the restaurant should recoup itself in 1-2 years.
And, of course, whatever the conditions may be, the restaurateurs with the best prospects are those who are constantly attentive to their baby and to everything it needs to exist and function. The chances of long-term survival and success are greater amongst those restaurants that are advantageous in terms of location, price range and service. And, well, concept, too. And in this respect, we have already matched the western restaurant market. If previously Moscow was aiming for European standards, now we can safely talk about setting ourselves our own criteria, here in Russia.
— But it is not as if there are hundreds of them here...
— …But in most cases, my compatriots are nowhere to be seen – either as owners or as employees. And if there is one, then it is one person at the most.
But let’s be honest: the mentality, the way of doing business, the culture of food itself amongst Russians and Italians is different. I won’t say which is better. They are different. And when the two collide during the process of working, like it or not, disagreements, misunderstandings arise. What I wanted to do was to create a little oasis of real Italian food. Where everyone – both the owner and those who are the face of the owner - speak the same language. In both the literal and metaphorical senses. Today in this restaurant, apart from myself, the owner, the manager/head chef is an Italian, the pasta and pizza chef is an Italian, the dining hall director is an Italian. It is the only restaurant, not only in Moscow but, I think, in the whole of Russia, where all the key posts are filled by people of Italian descent.
— And the rest of the staff, are they local?
— Yes, of course. There are about 50 of them.
— That many?!
— Why are you surprised? They ensure the high-quality service and smooth running of the restaurant.
— Your head chef Giuseppe Todisco has managed to build up something of a reputation in Moscow. He ran the kitchen at “Italianets”, at the osteria “Giuseppe”… How did you manage to entice him?
— Simply put he also liked the idea of a real Italian restaurant run by Italians. And he was happy to join us.
— Why the name “La Scala”? Obviously, it is in honour of the famous Milan Opera House: the outline of the building appears on your sign. But even so, why is that?
— At first I wanted to call the place “Caruso” in honour of the great tenor Enrico Caruso. It both sounds good and is well-known to the Moscow public. But it turned out that there was already a bar called “Caruso” not that far away... In the end, we settled on “La Scala”.
— How did you find the premises? As far as I know, it was an Italian restaurant, “Capri”, that was there before, one of the most expensive in Moscow, it was said…
— That’s right. The very example of an Italian restaurant without any Italians. My chef Pippo Todisco put me onto it: business isn’t doing very well there, they wouldn’t be against the idea of handing the premises over to us…
— Did you have to make many changes here?
— So far, not that many. I set up a pizzeria in a separate room and fitted out a bar. The rest of the changes will be made by the end of the year. Our restaurant is more affordable, the prices more reasonable. My initial idea really was to open a pizzeria. But then we got in step with our head chef – one of the best in Moscow, who has great experience, knows what the clientele want, and who has his own signature dishes.
— So your restaurant has become more affordable?
— Yes, we keep our prices at an affordable level. For the wine, especially. The average bill here is 2–2,500 roubles. That’s far from being the highest price in Moscow.
— What changes are you planning?
— First of all, we need to redo the old decor. It should look modern and elegant, not as ostentatious as it is now.
I noticed sometimes people would come in, take one look around, and leave. They must have thought that everything here was going to be too expensive. Which is why I decided to display the menu out in the porch in front of the door: let them see straightaway that the prices here really are reasonable. And, overall, it has worked. There are office buildings all around, and a lot of people from there come in here for lunch.
Moscow’s catering market grew phenomenally up until 2014. In monetary terms, at around 19% annually. But as of today, we are struggling to provide precise statistics. It is evident that many restaurants have begun to experience difficulties, several of them closing. One of the major problems for restaurants in recent times has become excessively high rents, pegged to the US dollar, and the unwillingness of the majority of landlords to accept the new market realities. Unfortunately, this problem didn’t arise alone, but in tandem with sanctions on many foods. Which has also had an effect on the cost price of meals, as well as on the quality of the foodstuffs used. Added to which there is the reduction in the buying power of the population in, incidentally, both the Economy segment and the “Average Plus” segment (the Average segment has shrunk to almost minute proportions).
The result of this is that we are seeing many canteens, cheap eateries, and food markets opening, but unfortunately the restaurant trade in Moscow is akin to an experimentation ground for the major market players.
In my opinion, Russia, as before, is way behind Europe in numbers of restaurants per head of population. If abroad most restaurants are opened by individual entrepreneurs and chefs, in Russia it is by restaurant companies which are able to attract big money and dictate their own “rules of the game”.
As regards the investment required to start a business in this area, then it is possible, of course, to open an outlet at a food market for somewhere in the region of 1–1.5m roubles. Such an outlet should start to pay for itself over the course of one year. If, though, we are talking about a café or restaurant meeting modern standards, then the amount of money needed only starts at 10m roubles. With a recoupment period of from one to five years.
It is difficult at the moment to determine the prospects for growth of this market in Moscow. We need to see in which direction the population’s buying power will go. Restaurants, even fast food ones, are a certain luxury. Cooking at home is always cheaper.
In this industry, overall, it is the viable, professional projects which are left, and fewer and fewer amateurs. But whether this is a good thing or a bad thing, I wouldn’t like to judge.
— Having Italian chefs is great, for sure. But they still need something to cook with. They need the right ingredients…
— We have been very lucky: the Italian cured meats – the salami, the sausage, the frankfurters – our chef makes them himself. He is the only one in Moscow. And he does it brilliantly. As for soft cheeses – mozzarella, burrata, stracciatella, ricotta – there are some of my compatriots who have already started producing them in Russia. And the quality is excellent. With the hard cheeses (the same goes for parmesan) it is trickier because of the sanctions. But we squeak by there as well. Import substitution is working.
— Your restaurant is pretty much in the centre of the city. Is the rent expensive?
— Very. I can’t give you the actual figures but they are enormous. Although they are substantially lower than they were here a few years ago. It’s a double-edged sword: on the one hand, with the economic crisis, with all these sanctions, you would think that opening a new restaurant would be a risky business. But on the other hand, the cost of premises has come down noticeably. Although there is no hiding it – even now compared with Italy rents in Moscow are exorbitant.
— How much in general does it cost to open such a restaurant in Moscow?
— If you are starting from scratch, then at least 400-500,000 euros.
— Would it be cheaper in Italy?
— Ten times! Here, in Moscow, there are other difficulties too: an alcohol license is only granted two or three months after a place has opened…
But, of course, there are a lot of positives, too. Taxes. In Russia, they are, in my opinion, much fairer, whereas in Italy a restaurateur can end up paying out 60 percent of his takings.
— Have you broken even yet?
— Not yet. We are nowhere near. But judging by my associates in the business, we are not in such a bad position. People tend to break even after a year to a year and a half.
The future restaurant owner in Moscow, whether from abroad or not, needs to set out clearly what kind of establishment they have in mind: its set-up, average bill, and its target market. The options for premises on the market are often limited, but, as a rule, there are some out there at a reasonable price. To make the best choice, we advise carrying out an analysis, broken down into several stages.
1. Look into any competitors and the pattern of similar establishments already there around the location you have chosen. On a map plot points for already existing establishments and trace an outline of the area they serve. Such an area determines the time a person is prepared to spend getting to the restaurant. It is different for each one: it can be both access on foot and by transport. As a result, you will be able to see where any unoccupied areas are — places where there are no competitors or only a few of them.
2. Check there is a potential market (future customers) in any untapped areas. Also on the map, estimate the concentration of other sites likely to be attracted by your future establishment. For instance, if your restaurant is going to offer a set menu from 12:00 until 14:00, the kind of sites you are likely to attract will be business centres that don’t have any cafes or canteens. Calculate the number of people working there. If you want to open a fast food restaurant, pay attention to any students and the places where they gather – colleges, halls of residence. Calculate how many of them there are.
3. Analyse everything: the infrastructure, the proximity of people living, or regularly in transit, there and any sites located within the area of attraction, shown as points on the map. Accessibility by transport is also worth factoring in.
Bear in mind the income of the people living there. Estimate the sex-age structure across the houses within the area, basing it on the class of the buildings and the year they were built.
The factors which go into assessing the location and premises for opening a restaurant are many and are different for each one, and the more detailed the data used in the analysis, the better the analysis will be, and the more precisely you will be able to determine which location is the most viable.
— Is one such establishment in Moscow enough to bring in a comfortable income?
— That, once again, is a matter of the Russian and Italian mentalities. For a Russian restaurateur, the answer would be “no”. If he makes 30,000 euros a month, he considers it not to be very much. To an Italian, such an amount is wonderful. When he opens a restaurant, he puts his heart and soul into it: what matters is that patrons come back again and again. And if it also turns a profit, then it is doubly wonderful.
— What else do you need, apart from money, to open a restaurant in Moscow?
— A lot of grit and a little craziness. But the main thing is passion.
— What was the most difficult thing in the initial stages?
— Creating a harmoniously functioning team. That is fundamental. The formalities were more straightforward – I simply bought out the Russian firm that was renting the premises and became its owner.
— And how did you recruit your staff?
— There were no great problems with that either. I “inherited” a few people from the previous restaurant “Capri”, most of the experts were brought here by my Italian friends who had worked with them before at other Moscow establishments.
— Your restaurant also stands out in that you offer additional, unusual delights: a masterclass in drawing, musical soirees…
— We will soon be starting another masterclass in the Italian language. And we also want to put up a screen and a projector and show Italian films.
— A masterclass in drawing… What does that involve? Eating and drawing a little, or just drawing a little?
— Drawing a little, mainly. But you can also eat and drink wine. It was my promoters who brought a Russian drawing teacher here and suggested the idea. And I liked it.
On Fridays, we put on musical evenings. Now we want to expand the idea: on Wednesdays – music, Thursdays – singing accompanied on the piano, Fridays – jazz. The latter is for me personally: I just love jazz.
— Does it bring more people in?
— Yes, it does, of course. Some, I know for a fact, come expressly to listen to a good musician or singer. At the moment, of course, it is hard to gauge the effect this has had: these are all recent developments which have only been going for a few months.
— Would you advise the Italians you know to get their own businesses going in Moscow now?
— I won’t speak about the purely economic advantages – taxes and the like. They are well-known. I will say this, though: I would advise it, but only if the person loves Russia. Then it is worth a try. If you come here just to make money, but don’t like the country, you will find it difficult.
— So, you, I take it, don’t find it particularly difficult?
— I adore not only Moscow, but Russia in general. It is my second home. Every year, I go to Lake Baikal on holiday. I just love Siberia, Altay. Over the years, I have travelled around the country a lot.
— So, there is some sense in asking you about your plans for the future, then.
— Once I have got the restaurant running properly, I want to open a more “grassroots” Italian place in Moscow: a trattoria. And more than that: I want to buy a piece of land and build a house on it near Lake Baikal.