Главная - VEDOMOSTI business daily (2015)

VEDOMOSTI business daily (2015)

A family of lawyers has saved the Bolshevik workshop from closing

In just two years the production of cakes and confectionery of this famous brand had grown from 10 to 150 tons per month.

The history of this family cake business, called «Viennese workshop» (in Russian: Венский цех), started in the 80s. Margarita Danelia, granddaughter of famous film director Georgiy Danelia, and Leonid Sedov were classmates. They lived near Dinamo metro station and passed by the famous Moscow factory Bolshevik at the Leningradsky highway every day. They frequented the factory’s brand shop to get their sweets; «My parents were telling me that the pipes surrounding the factory had chocolate and cream inside them, — now Sedov is laughing about it — in reality, those pipes were the heating pipes».

Margarita Danelia and Leonid Sedov

Not for the foreigners

The boy and the girl both grew up, both went to law school, then got married. Even their careers were similar: both rapidly grew within their professional field. Sedov had a managing position in a law firm. In the year 2003 Danelia joined the Kraft Foods company and in just three years became the head of the law department, joining the board of directors.

Until the year 2007, the Bolshevik factory was owned by Danone, at which point its confectionery business was bought out by Kraft Foods all around the world. For both Danone and Kraft Foods, fresh cakes production was not the primary line of work. «It is probably because they did not see the opportunity for national distribution, or maybe, because there is no tradition in Europe for the mass production of freshly made cakes, which is usually the business of small bakeries and confectionery shops», — Danelia noted.

Cake production business was not a priority for the company which owned the factory, since it would’ve had a hard time scaling, explains Julia Vershinskaya, head of management in the category of «Biscuits», «Mon Delice Rus» (which used to be Kraft Foods): «Taking care of the factory’s heritage, we, first and foremost, were looking into an option of selling this non-profitable business and went for it in the year 2011».

One day, Danelia went on a guided tour of the cake workshop facilities and was very impressed with it. She started researching the history of the factory from its very beginning in the year 1855. During the Soviet times, cakes were produced in workshop № 3, but in all documents from that time it also had a different name — «Viennese workshop».

Pots from the 1950s

In the year 2010 Bolshevik factory was preparing for relocation outside Moscow, which meant the end of cake production. Danelia was really upset by this turn of events. Kraft Foods had put the workshop on sale but the way in which it was done, at the time, it was no one was interested.

Cakes and confectionary produced by GOST standards are usually handmade. «Essentially, it was just a bunch of pots, 70 workers and non-existent management infrastructure above it», — Danelia explains. She had been talking over potential ways to save the workshop with other top managers, but could not find a solution. Then she turned to her husband with the same offer. «At the time, I had sort of a break in my law career and I quite liked the idea», — Sedov adds.

The young couple did not want to gamble big with their own money and taking a loan was also not an option. The production workshop was sold as a property including all equipment, not as a business. Sedov had bought the old 1950s equipment from Kraft Foods, paying tens of thousands of dollars. They registered the company and started employing old workers at the new firm. They rented a workshop of 2000 square meters at the Bolshevik factory, posting its market value (about 5000 rub./sm per year).

They negotiated the use of the trademark “Bolshevik” with Kraft Foods for which they pay yearly royalties. All of those investments were taken straight from the couple’s personal accounts. «By that time we both earned decent salaries», — Danelia comments.

We had to negotiate the use of the Bolshevik brand logo, name and trademark, policies of presentation and communications with the new owners», — Vershinskaya adds. Of course, convincing the old owners to make a deal for the use of the famous brand was not easy. The risk of a conflict of interests took Danelia out of negotiations at Kraft Foods, but her being a relative of the new workshop owner was definitely a positive addition — she was a top manager of the «mother» company which in the corporation’s eyes was a sort of insurance of the brand going into the right hands, says Sedov.

Building kit for the lawyer

After buying the workshop from Kraft Foods, the lawyers’ family found a way of giving it new life.

In just two years the turnover rose from 60 million roubles to more than 300 million roubles in 2014.

The main challenge for the lawyers was suddenly becoming owners of a working business: they had to do everything by themselves and the number of tasks were overwhelming. «We had no financial plans and made a lot of mistakes along the way», — Sedov acknowledges. For example, they had to go through several accountants, since they had no idea what kind of people they needed to hire.

The old workers were really the walking knowledge of the production technology — mostly people over 40. They did not understand why they had to suddenly go and support a smaller business. About 25% of the workers left their jobs. «But because of word of mouth most of them soon came back», — shares Sedov.

In the fall of 2012, the building of the Bolshevik was bought by the О1 Properties, a major Moscow developer and it was decided that the building would be turned into a business center. «By that point, we had already set up shop in the right-wing of the factory — somehow we thought it wouldn’t be touched during the reconstruction», — Danelia tells us. To not obstruct the reconstruction, they had to leave the shop and the production workfloor long before the lease expired. New landlord helped to relocate the whole workshop in two months, without stopping the production even for a day. The young couple found a suitable space in a bread factory on Krasnokazarmennaya street. Here, in Lefortovo quarters, the production of the “Viennese workshop” cakes have now settled. Although, rent prices have gone up by about 20% in comparison to 2011.

Nostalgia sells

For two years the couple could not register the «Viennese workshop» at Rospatent. They were turned down with the comment: the name is confusing for the customers since cakes are not made in Vienna. Eventually, archive documents came into play, in which the name “Viennese workshop” was historically proven. In 2014 the trademark was registered.

«We didn’t change much», — says Sedov. We stuck to making the same Soviet GOST assortment: cakes titled «Skazka», «Yuzhnaya noch», «Ptichje moloko», «Polet», tea cakes «Kartoshka», classic eclairs. That was a conscious choice of ours: to make retro products. Some of our customers don’t like, that in “Soviet cakes” there is a lot of sugar and fats in comparison to our competitors’ less sugary products. But that doesn’t stop the owners of the «Viennese workshop». «They also don’t have any artificial additives», — Danelia explains. «Sugar helps us keep our produce fresh and the butter we use is the most expensive one — 82,5%, imported internationally. You cannot find the butter of this quality standard in Russia», — says Sedov.

Nostalgic cakes from the 70s became popular, confectioner Elena Starikova is absolutely sure of it. She participated in the making of confectionary houses such as “Kofein”, “Frandgel” and others. Even private customers are not interested in posh cakes anymore, the taste they remember since childhood is much closer to their hearts.

Soviet brands do not have a lot of growth prospects and they are alive only because the people remembering them are still alive, Sergey Shedrin is convinced (board member of KBK “Cheremushki”). His company also has some retro products, like the cake “Charodejka”, but the demand for it is not rising. According to him, it is too expensive to mass-produce Soviet confectioneries and it also requires high-quality ingredients, which may be a problem for a smaller company in our day and age.

The virtue of being transparent

In 2011 a «Bolshevik» factory cake cost about 180-200 roubles in retail. This high-quality product was, for the longest time, a part of the economy-segment. You could only buy it in the brand shop at the factory. By the year 2014, the product positioning in the market had changed to an upper segment and the brand owners got it into the majority of retail chains, beginning with “Globus gourmet” and ending up with “Magnolia”.

A new packaging design was developed by Depot WPF. As a result, we can now see round- and square-shaped striped cardboard boxes. Even the bottom of it is cardboard, not plastic (even though it is a 30% more expensive choice) and that makes it more festive. For big retail chains, an option with a see-through top was made — so that the customers can see the cakes.

«Right now I don’t have any concerns about how the «Bolshevik» trademark is used, it is all within our agreement», — says Vershinskaya. The «Viennese workshop» pays royalty to «Mondelez Rus» — a percentage from the turnover.

Danelia is still a head of the same legal department and Sedov has his own legal practice now, so to manage the confectionary business they hired a whole team of people.

However, Danelia’s evenings and weekends are fully dedicated to the «Viennese workshop», she spends it discussing the business with her husband.

This week, after the reconstruction in the historical building of the «Bolshevik» factory, the «Viennese workshop» flagship store opened. In there you can also try the whole European tea cakes collection (27 cakes) from the chef-confectioner Lubov Sergeeva.

Показать сайт