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Knights of the Vine RUSSIA

Cover Story

Protect Me from What I Want – Give Me What I Want
Well, the first couple of words sound something like a governmental rule from some time ago, gently warning the people to better stay away from some burning, but quite natural desires. And back then it was kind of easy to follow an advice like that because there was not such a lot to choose from anyway. how more drastically could this have changed in only one and a half decades? Now Moscow is a real party town.
By Frank Ebbecke
Photos by Alexey Gorov

The talk is about wining and dining, playing and dancing, entertaining and being entertained – simply about enjoying life to the full, probably one of the most basic desires for people everywhere – of both sexes, all ages, of all social classes. Fueled by a growing middle class, typified by Passport readers who eat out several times a week according to a survey in 2006, the restaurant sector is virtually exploding.

Other pushing factors can easily be identified from the Russian mentality: Russians just love to eat and drink in abundance (a menu can be as thick as a bible) and this preferably in good company, the more people the better – family, friends, business partners. Russians just love to spend money – and they love to show that they really can: First, because now they have a lot of choice, second, because ‘what to save money for, who knows what happens tomorrow’? Most Russians just love a fair portion of splendour and glitter, gold and crystal. Others expect at least an impressive, showy, unusual appearance, with all kinds of design elements included.

88,000 US dollar millionaires and a steadily growing number of younger, hip, well-travelled and well-educated ‘Post-Soviet’ Russians have strong demands for a respective lifestyle. From elegant St. Tropez-type beach clubs on the banks of Moscow or Volga Rivers to simple ‘filling-up stations’, from plush gourmet temples to ‘Crazy Horse’ type show restaurants – here, you have it all.

The capital of a country with 53 billionaires these days (19 more than early last year, taking third place in the rankings behind the US and Germany, but with their total wealth of $283 bn, Russia is number 2, in front of Germany).

Nyet, it is definitely not only what comes on the plate and in the glass that makes the difference here. What people in Moscow, probably more than anywhere else, ask for is the total experience for all the senses. Even if it might be a very subjective taste in the end – the variety, creativity and sometimes the sheer money invested in design and decoration. The prestigious ‘Turandot’, a real feast for the eyes, is said to have swallowed around $50 million before the first guest was let in, and in the already legendary ‘Pushkin’ next door, most of the carefully selected hosts and waiters make a more ’noble’ impression than a lot of the guests. It all makes for a ‘wow’ experience, and repeat business … and the creators and owners become more affluent from day to day. There are no limits in Moscow. Choose to have an elegant dinner at four o’clock in the morning or an exclusive breakfast at four o’clock in the afternoon.

There are many restaurants ready for service 24 hours/7 days a week/365 days a year – and quite a number of really classy ones. And there is also no lack of uniqueness in choosing the ‘right’ names for places. How about ‘Hande Hoch’ (‘Hands up’) for a German restaurant (somebody must have watched too many WW II films).

Paris, the generally acknowledged focal point of the ‘Grandeur de France’, certainly and especially for the French themselves, is seen as being the one and only place where you absolutely, positively can enjoy the essence and the creativity of the fine art of wining and dining. That may well be (with a little bit more modesty perhaps).

But if you look at the sheer numbers of hospitality outlets, cities such as Paris could lose out against Moscow. In Paris, for example, there are believed to be 14,500 restaurants, bars and cafes, more or less. In Moscow, according to some dubious statistics, there are around 65,000 – if you include all the factory and office block Stolovaya’s that require you to have a security pass just to enter the building or compound – hardly open to the public!

Of course the rate of growth in Moscow is phenomenal, with one thousand new restaurants said to have opened in the last 12 months.

You do not want to ask how many times, each day, a cosy tête-à-tête has begun with a long, serious and enthusiastic discussion about where to go. Everybody has so many favourites around town, and this in growing numbers on an almost daily basis.

You are back from a short business trip and your friends tell you that you missed the opening, again, of a couple of new places. Quite obviously some professional restaurateurs and gifted investors had already foreseen what the President of the Russian Federation, Vladimir Putin, would dictate in the notebooks of the country’s leading ‘biznezmen’ on the 6th of February this year: “Don’t worry about the strategic industries (meaning the wealth of natural resources, of course), as the state has those covered, concentrate on adding value in other sectors of the economy, look forward and expand internationally, we need a global re-branding, and to revive trust in the ‘Made in Russia’ trademark.”

During 2006, in Berlin, there also was an amazing increase of 1,000 watering holes and restaurants just in the timeframe of one single year. And this only in the very central area of Germany’s bustling capital.

Not such a big surprise, probably, if you realise that well over 100,000 people of Russian descent live there – and quite a number of them not only live there, but are entrepreneurs making ‘big Euros’. Russian ownership and management, especially of places with vibrant live entertainment, have a long history there, a few thousand kilometres to the West of Moscow. Almost the same large number of people of Russian heritage made their home in Berlin almost a century ago, in the roaring ‘Twenties’. Back then, Berlin is said having been the unrivalled European hub of the most excellent, most lively, most appealing, most decadent entertainment – eating, drinking, dancing and playing and all the rest of the fun.

It seems that nowadays the energy pole of this ‘biznez’ has moved the same few thousand kilometres back east, right into Moscow. Is it for this reason that a Berlin-classic in fine dining is located right next to the train station where the rails lead east and is even called ‘Berlin – Moscow’!? Both capitals have only been beaten by one other ‘world capital’ in terms of the sheer number of newly introduced F&B outlets: New York City with 2,800 new venues last year.

But the ‘Big Apple’ and Moscow still have something in common. One can hardly imagine a single ethnic cuisine you could not get in both of these mega-cities. Moscow, certainly, is even offering a far greater variety of food from the Caucasus region and Central Asia, reasonably priced and very appetizing. Some say nowhere has more sushi places than Moscow, except Tokyo, of course. And with the ‘Old Havanna’ show restaurant there is probably no better Cuban place outside Cuba, or of course, Miami.

So, a few smart, clever people with a most sensitive feel for the right trends have become really rich in the gastronomic trade. This highly profitable business continues to grow at supersonic speed. Analysts estimate the restaurant market in Moscow to be worth $4.5 billion a year, one-third of it in casual dining. This inexpensive segment of the dining market is predicted to grow by around 20% per year. That’s good news for Rosinter (*See accompanying article): This is exactly their core business and it made them one of the big players in the trade. In their more than 200 eateries they serve the hungry crowds across this, the greatest national territory in the world, plus in some former Soviet satellites. But in Moscow alone, of course, they already achieved a 20% market share with serving sushi, pizza, burgers, as well as Russian favourites such as pelmeni. All together Rosinter posted a turnover of $205 million last year (an impressive 30% up from 2005) with their seven brands including ‘T.G.I. Friday’s’, ‘Santa Fe’, ‘Il Patio’, ‘Planet Sushi’ and ‘Rostiks’, the leading chicken fast-food brand in Russia, representing the ‘KFC’ brand of the US Yum!Brands.

As banking sources say Rosinter, will become the first company of the booming dining sector to float publicly in May this year, which will give investors access to this lucrative consumer segment. Investment bank ‘Renaissance Capital’ is said to have the mandate to advise Rosinter on the planned $100 million plus IPO. The Novikov Restaurant Group, established just 15 years ago, looks like the other candidate for going public still this year. Arkady Novikov, born 1962 in Moscow, can be considered to be one of the most influential personalities behind Moscow’s growing reputation in the whole world of restaurants, bars and entertainment places.

It all started with his studies at the Moscow’s Culinary College No174 where today a memorial board can be admired ‘Arkady Novikov graduated from here’. And about his creativity, initiative and ambition: “I can’t stop” he says.

Each of Novikov’s restaurants follows a different theme to attract carefully identified special target groups. An example is the joint project with Conde Nast Publishing House, the ‘GQ Bar&Restaurant’, featuring a classic American Bar and Italian as well as Asian cuisine. High-ranked Moscow favorites like ‘Aist’, ‘Biscuit’, ‘Casual’, about 40 others, and the ‘Yolki-Palki’ mid-priced restaurant and supermarket chain contribute to the group’s success in a fast growing market The group’s consolidated revenue in 2004 was $81.9 million.

Another example of how dynamically the hospitality industry in Russia is evolving is the impending merger between Novikov and his partners ‘Five Stars’ and the ‘Prime’ sandwich and ‘food to go’ chains. This is hailed as the first M&A deal in the restaurant sector and could point the way to the future. Simply enjoy life and have fun everybody. And yes, you can, in Moscow.

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