Transit via Miami
They met in an American restaurant.
“I was dealing in commercial property in Moscow,” relates Brad. “I was no stranger to Russia. My father worked in the USSR during the time of Brezhnev. I visited him there twice during the summer, and then spent a year studying in Moscow at an American school. When I graduated from university in New York in Business and Politics, I worked in finance in the States. At the time of the economic crisis in 1998, I decided to do business in Russia. I rented a flat near to Mayakovsky metro station, and I used to have dinner in an American restaurant. There, behind the bar, I noticed a blue-eyed girl with the fabulous name Yulia...”
“At the time I was in the fourth year at the Textile Institute and was working on the side as a waitress in the restaurant Starlite, which had only just opened,” Yulia joins in. “Brad was one of the most exacting and demanding customers. He always wanted everything at a high standard. He was also big-hearted and friendly. We began to see each other outside of my work. Brad was from another world, he thought in global terms, made plans ten years ahead. I was struck by his self-assuredness, his substance...”
But destiny decided to set the youngsters a test. No sooner had Yulia defended her dissertation than she was offered a six-month work placement in America. It was an offer she could not refuse. Languishing without her loved one, she dashed to Brad and his historical homeland.
“I was working in Florida but Brad lived in Miami,” relates Yulia. “We travelled to see each other whenever we could. When my visa expired, and I had to return to Russia, Brad proposed to me.”
“I knew that I wanted to be with this Russian girl day and night, and in the morning...” admits her beloved in all sincerity.
In Miami, the couple opened two dry cleaners with two huge washing machines each able to take 20 kg of laundry. Over the next four years, daughter Maya and son Cody were born into the young family. But at some point, Yulia and Brad realised that they had “outgrown” that business.
They Conquered with Quality
“We packed our things and went over to Los Angeles from Miami, and then in 2008, to Russia,” remembers Brad. “My wife and I had always wanted to make something with our hands. In the States, while Yulia was at home with the children she often made cakes and cookies for friends, for the children, for birthdays – for every occasion. When we arrived in Moscow, we weren't able to find any decent pastries at affordable prices. We started to make our own at home in the kitchen: we made cookies for ourselves and our ex-pat friends, who really liked them. They recommended us to their friends, and it began to snowball from there.
“It was, of course, a huge risk. For example, in the States, it's not possible to start production in your kitchen and then get customers like Rosinter: it is far too implausible. But Russia is a wonderland...
“Then an investor we knew let us into a kitchen,” continues Brad on how his business evolved. “A canteen opened in a new building housing a huge insurance company. In a small space, all of 40 square metres, we started to bake cakes and cookies.”
Brad admits that there are problems for the foreigner wanting to start a new business independently in Russia. There are too many certificates to collect and long queues to stand in. He rushed to the services of a lawyer. This woman – an expert in her field – collected the raft of documents and necessary signatures in five days, asking 25,000 rubles (about $800) for her services.
Organising confectionery production didn't require a lot of investment. The only things which the couple bought were two large mixers at a cost of 30,000 rubles (around $950) and an oven for 20,000 (about $650).
“We started our business with 50,000 rubles (around $1,600),” Brad continues. “We didn't have to pay any rent. Our acquaintances took us under their wing, though I have to say, the conditions were tough. We stood over the stoves ourselves and made cheesecakes – a particular kind of cheese tart which is very popular in America. All the cheesecakes sold in Moscow were imported from the States or from Germany. And those baked in Russia were more like cakes made from curd. To make the cakes and cookies we used the finest ingredients: real butter with 82% fat, cream-cheese from Germany, Belgian chocolate. The canteen food technician where we worked was always maintaining: “Why use expensive butter? You can replace it with cheap margarine. Why use real chocolate? Make a glaze.” The cooks and pastry-chefs in Russia still had that Soviet mentality whereby everything in the kitchen needed to be watered down, and the recipe not followed, in order to take home a bag of food. How we struggled against these relics of socialism! For us it was unthinkable to offer one thing but sell something else. Our strong point became precisely the quality of our baking.”
They Filled the Gap in the Market
At first, the range of goods from the New York Bakery family business was not large: ten different varieties. Three bakers worked at the enterprise. Yulia herself stood over the stove, thought up new recipes, dealt with the accounts. Brad sliced the cakes, was porter and salesman, and changed the light-bulbs. Both of their hands were covered in flour one minute, and in castor sugar the next. But suddenly, the couple had to increase production and to look for two more workers for the night-shift.
“At one meeting,” remembers Brad, “the head chef of a well-known restaurant asked me: 'Can you make buns for hamburgers?' 'We can make anything!' I blurted out. And we started trying there and then. We immediately set aside the dried milk and powdered egg using only fresh organic eggs and milk. We arranged a tasting for the head chef, listening attentively to his observations. At first, we delivered the rolls piled up on top of each other in five rows, then moved to rows of three so they didn't become misshapen. There and then we asked: 'What else do you need?' and quickly filled the gap in the market. We used to bake three kinds of cheesecake, but then we were asked to produce ten. In one day, Yulia came up with ten cakes with toppings made from blueberries, raspberries, strawberries, chocolate, caramel...”
Orders began to increase. Very soon restaurants began to take an interest: they all needed cheesecakes, cupcakes, burger buns. After working like that for a year, Brad and Yulia realised that their little bakery was overcrowded. They started looking for more spacious premises but the process was unexpectedly long and drawn out.
“Prices were unreal. They wanted 4,000-15,000 rubles ($120-$450) a square metre per year,” laments Brad. “Any foreigner will say that that is a very high rent. And they were offering old buildings in need of repair. And we needed specially fitted-out areas with power cables to connect large ovens. As well as a ramp for loading. Finally, I saw an advert: the Hotel Salut was offering premises of 400 square metres previously occupied by a bakery. I phoned, said we were coming over, and signed the agreement there and then.”
The Most Awkard of All – Burger Buns
“We struck lucky,” admits Yulia. “At the proposed premises, there were already three rotary ovens. It was the latest European equipment. We brought our own cake moulds and cake-cutting machine. All we needed to buy were a few sundry items. But the waiting time for just these few items was 2-3 months. For example, we urgently needed baking rods to support the pastry sheets in the oven. We turned to dealers and the reply was the same: 'All the parts have been ordered. They will only be a few months'”.
In Brad's words, to start up a modest confectionery production, requires no less than 100,000 dollars.
“Now,” he says, “we work with large companies: T.G.I. Friday's, Coffee Bean, Starlite Diner, Beverly Hills, Papa John's Pizzeria; we serve the American Embassy. We work primarily for restaurants and only then for individuals – ex-pats from the States and England. They feel at home thanks to our products. But now we are getting more and more Russian customers. We have a website. We sell cheesecakes, carrot cakes, bagels, cupcakes retail, made the American way. Delivery is 200 rubles (around $6.50).”
Currently, 20 people work at the New York Bakery's new premises, six of which do the night-shift.
“I've heard a lot about how staff in the Russian catering industry have a habit of stealing,” Brad reveals. “I'm already convinced of the opposite. We have a close-knit team. We trust our employees and try not to insult them. At the bakery they are free to sample any of our products. The average salary at our company is 25,000 rubles (about $800) but some receive up to 35,000 (about $1,100). At the moment, we offer 40 kinds of products. We make cheesecakes during the day, in the order of 50 per shift. They each weigh two kilogrammes and cost 1,600 rubles (about $50). We sell cupcakes from 60 to 120 rubles ($2-4) each, depending on the size. Bagels cost 60 rubles (about $2), a large carrot cake 1,400 rubles (about $45).
The night-shift bakes bread. The most awkward are the burger buns. The dough is affected by everything: temperature, moisture, draught. On Fridays at the company, it's all hands to the pumps: 6,000 rolls are baked, 2-3,000 on other days. Each petit pain costs 12 rubles (about $0.30). But that's the wholesale price.”
Money Has Become a Religion
All the products are distributed whilst still hot to cafés, restaurants and various establishments.
“We came to an agreement with an individual company which owns a few cars,” says Brad. “We work with non-stop drivers. This is very important because they operate as expeditors with financial liability for the transported products. One head-chef requires his rolls to be delivered by 9 am, others by mid-day. The lease for a lorry with the carrying capacity of less than a tonne, and which does 3-5 trips, is 5,000 rubles (about $180) for the day.
”The owners of the New York Bakery struck lucky once more. They do not have to deal with the dreaded Russian supervisory authorities: the Fire Safety, and Sanitary and Epidemiological Inspectorates.
“Quite a few companies rent premises at the hotel complex,” says Yulia. “In our wing alone there are three bakeries. On the staff of the hotel Salut there is a health inspector who is responsible for all of us. In this respect, everything is very Soviet. He is always coming to us and asking if there are any “insects”. He makes sure we are following hygiene rules. We are open, we have nothing to hide. Everything which needs to be done, we do. The experts from the Sanitary and Epidemiological Inspectorate come and inspect all the hotel premises in one day, including the café and restaurant. All responsibility lies with the health inspector. It is written into our contract.”
But why did the couple not start a similar enterprise in America?
“There is a lot of competition there,” explains Brad. “I would not have been able to spread my wings in such a short space of time in the US, like I have in Russia. It is profitable here to engage in high-quality baking. It's hard sometimes, of course, especially during the long Russian winter. Also, people in Moscow have become hard-bitten. There is no talk of mutual profit. People help each other out more in America, for example, whereas Muscovites only have eyes for dollars. Money has become a religion. The bureaucracy here is still a pain in the neck. You need a pile of paperwork for everything. We have to produce six or seven certificates for every “crumb” we sell. But living and working in Russia is interesting all the same.”
For the time being, the New York Bakery works with two days off but Brad and Yulia hope to soon move over to a round-the-clock timetable. Their products are going down, as they say in Russia, a storm. And they still reckon that they can help the Muscovites to mellow. They are always nicer full than when hungry...