Leading sushi-bars supplier moves in big way to Russia's Olympic region

February 28, 2008 16:32

In order to boost its sales in Russia's regions Saint-Petersburg-based Yamato-Russi Group of Companies, one of Russia's main suppliers of products, dishware and equipment for Japanese restaurants and sushi-bars, has opened its first information and logistics centre of Yamato Trade House in Krasnodar, capital of the same called territory surrounding the Olympic city of Sochi on the Black Sea coast, according to Business-Journal.

Established in 2000 Yamato-Russi has been expanding on the Russian market by means of building up its dealer network and opening own affiliates in the regions. More specifically, now the company has got dealers in Ekaterinburg, Novossibirsk, Krasnoyarsk, Volgograd, Kaliningrad and Nizhny Novgorod, representatives in Samara, Saratov, Penza and Kazan. Opening an affiliate in Krasnodar is part of the company's strategy as the Krasnodar Territory is regarded one of the most promising region for the company's development, said Lyubov Sharova, head of sales department of Yamato Trade House, quoted by the report.

The annual growth of the foodservice market of the province hosting Olympic Games in 2014 is officially estimated at 250% and the trend is supposed to persist in the coming three years. Actually, Yamato-Russi already had its representatives in Russia's South Federal District, but the results of their operations were not very high. With the new office opened in the city the company can cooperate with its customers directly rather than via intermediaries. Through three months of its operations up to 80% of Japanese restaurants in Krasnodar became customers of Yamato Trade House offering them a wide range of 240 products.

By August 2008 Yamato-Yug is planning to open its affiliates in Sochi and Rostov. According to Sharova, the market of Japanese restaurants and sushi-bars in the Krasnodar Territory is still at the development stage. There are only 33 foodservice places serving Eastern cuisine. Nearly million-strong city is ready for a larger number of restaurants and cafes. In the coming two or three years the province should have premium-class Japanese restaurants and Yamato-Yug will encourage development of the sector.

Cooperation with the centralized logistics centre brings some benefits for restaurants. First, the centre practices individual approach when working with customers. More specifically, Yamato-Yug has a special program for product reservation thanks to which a victualler can order products and receive them within 24 hours (even on weekends).

Another benefit is connected with payment credit up to 20-25 days. Such interest-free commodity credit is in other words development of victuallers at the supplier's expense, Sharova thinks. The approach has been long practiced not only in Krasnodar, but in other regions as well.

While smaller suppliers will often have to re-price their products 3-4 times a week due to strong competition between them, Yamato-Russi as a large supplier can afford leaving its prices unchanged at least for six months because it imports the range directly with foreign producers (Japan, the USA, Thailand, Sri Lanka, and China) at fairly stable prices. Moreover, the company's price policy provides for the same product prices both for Saint Petersburg, Krasnodar and Moscow.

Forecast

Vitaly Rudenko from Subway-Yug (affiliate of Subway Russia LLC which is one of the most rapid developing fastfood franchising chains) thinks that the demand for fastfood products and logistics services will be on the rise in the coming two or three years first of all thanks to expansion of restaurant chains. Sales manager of Grossmart chain of hypermarkets Svetlana Degtyar shares the above opinion adding that fastfood companies should have several suppliers in order to completely satisfy their need in products. If Krasnodar has one or two large logistics centres capable of satisfying the product demand from restaurants, they will enjoy a fairly strong demand.

Hypersuppliers

A lot of difficulties connected with product supplies in Krasnodar have vanished with launching of Metro Cash&Carry wholesale centre. Even though the products are sometimes priced higher than middlemen's charges, Metro Cash&Carry guarantees high quality of its products, according to Vitaly Rudenko. At the same time, Rudenko says Metro should think of offering its buyers delayed payment in order to attract more customers. According to head of Metro's Department of Government and External Relations Oksana Tokareva, the centre has come forward as a wholesale supplier of practically all large restaurants of the city and cooperates exclusively with companies and entrepreneurs. The company's convenient working schedule and constant availability of products give the local victuallers the opportunity to plan their purchases and do them within a short period of time thanks to presence of all the products under one roof, Tokareva said. She also added that when Metro cannot source some products on the Russian market, they can import them directly from foreign producers.

One of the main advantages of Metro Cash&Carry is lower prices as compared to retail prices (approximately by 10-20%) and presentation of all the necessary papers. As for the retail sector, victuallers purchase products in retail outlets only as an exception when there is no other alternative or, for instance, there is a sudden lack of specific products. Retail hypermarkets offer a wide range of products, but their prices can hardly interest victuallers because they can be higher at 20% or even 40%.

Besides, retail products are generally meant for ordinary consumer and not for exquisite restaurant menus, because it is not profitable for retailers to display products demanded by victuallers once a month, for example.

Experts say that in the course of time local suppliers will be pushed from the market by wholesale hypermarkets capable of satisfying practically all the needs in products. So far Metro Cash&Carry is only one business to business company in Russia and now more and more victuallers prefer purchasing in its hypermarkets.

Information-logistics centres and wholesale hypermarkets will develop in the regions simultaneously, thinks Lyubov Sharova from Yamato Trade House. They do not compete with each other but even cooperate. For instance, Metro Cash&Carry and Yamato Trade House have got longlasting business relations. Nevertheless, no matter how the market of suppliers may develop, victuallers think that problems with the supplies of necessary products will remain to this or that extent. Some of the problems are connected with the human factor (e.g. insufficient staff and its poor skills of the operating personnel).

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