Fast Food and Russia: A Match Made in Food Heaven?
By Joseph Cappa, D.B.A., M.B.A.
Is bringing a popular U.S. industry to Russia a good thing? The Burger King Corporation is attempting to find out. A recent Moscow Times article describes the Burger King Corporation’s strategy to increase competition with fast-food rivals McDonald’s, KFC and Subway for a share of the Russian fast-food market. Fast food is certainly not new to Russia but Burger King is late to the game, with Subway, McDonald's and KFC holding the top market share. "We were 20 years late to the game in Russia, but we're making progress very quickly…to capture market share," admits Jose Cil, president for Europe, Middle East and Africa operations for Burger King.
When I read this article, it brought to mind a number of questions, but the most pressing is whether it’s wise for the fast-food industry to “go global.” Currently, the fast-food industry in Russia is in a rapid stage of expansion and there are opportunities for significant growth. The four main U.S. fast-food companies currently operating in Russia – KFC, Burger King, McDonald's and Subway – have a combined 1,020 restaurants. Each of these chains brings a wealth of business, operational and branding knowledge, which shows that the feasibility of operating in Russia is not a concern. However, what remains to be seen is the long-term viability and demand for fast-food restaurants in the country, especially given the volatility of business conditions in Russia compared to the United States.
Beyond this, Russia continues to struggle as a growing democracy. There are many roadblocks and outdated processes that continue to hinder progress in Russia, which can have a negative effect on the long-term viability of a traditional U.S. industry like fast food.
Of course, this discussion cannot be complete if the issue of culture is not also mentioned. Americans have a long-standing history with the fast-food giants, from the Golden Arches and the Colonel’s bucket to the King’s Whopper and Subway’s “eat fresh” sandwiches. These are not as well-known in Russia, having only made their first appearance in the 1990s.
For now, it appears that Russian consumers have accepted the fast-paced approach to food consumption, but how long can that last? Will the Russian culture make the long-term commitment to a fast-paced approach to food consumption? The older Russians will most likely hold on to their cultural practices. For them the idea of fast-food restaurants will amount to nothing more than a U.S. fad. That means the key to long-term success for the fast-food industry in Russia will be changing the culture of young Russians, convincing them to let go of the past and embrace an aspect of Westernized thinking.
Image credit: Flickr/joo0ey