The FINANCIAL — American fast food object numbers are growing day by day in Georgia, becoming more and more popular with the Georgian population. The market is already represented by a Donuts’ Café, MacDonald’s and Baskin Robbins. MacDonald’s Geo plans to broaden its net; an additional café will be opened in the Saburtalo District of Tbilisi by 2008. The company said that the number of its customers has grown from 30-35 % in just one month.
According to Gela Gelovani, the Director of Donuts’ Café, the café plans to spread its net in the central districts of the town, as brand awareness is higher in these districts. An additional café will be added in Vake and on Vajha Phshavela str.
According to the founders of the cafés, the process of establishment was difficult, as Georgia was not an interesting country to foreign investors.
According to Ivane Kulijanov, the Director of Baskin Robbins (exclusive licensing partner of LTD Hollins), the idea of the establishment of Baskin Robbins in Georgia was caused by the lack of ice-cream cafés on the market.
“It was a very strange time during that period. Baskin Robbins’ café was opened in Tbilisi in 1997. The getting of exclusive rights for the opening was not very easy as a special commission had to study the market before giving a license. The Georgian founders had to explain that it was exactly the right time to begin the new business,” Kulijanov declared to The FINANCIAL.
“Finally the commission decided that business circumstances were stable in Georgia so the investors went ahead with the necessary investment. The index of the investment is confidential. This business is apparently successful compared to Georgian scales. Today Baskin Robbins’ ice-cream cafés function on Agmashenebeli str. 142 as well as four stationeries in the city’s cinemas and squares,” Kulijanov added.
According to Tengiz Kapanadze, the Managing Director of MacDonald’s Geo, the idea of the establishment of MacDonald’s in Georgia was part of the head MacDonald’s corporate view. The aim of this view was to master the central part of the Caucasus, as MacDonald’s fast-food cafés were already widely represented in the whole of Europe, in Asia and in America. In the Caucasus the first café to be opened was in Tbilisi.
“The economical structure was very hard in Georgia, but Mr. Temur Chkhonia helped us in getting a license. He already had great authority in the sphere, as Chkhonia is executive director of the well known American brand Coca-Cola Bottlers Georgia. Lately a new MacDonald’s opening was followed in Azerbaijan. The café in Azerbaijan was opened with Georgian management help. Georgian specialists assisted Azerbaijan colleagues in logistics, supplying and marketing. At this stage Armenia, Kazakhstan and middle Asia have not yet been mastered,” Kapanadze declared to The FINANCIAL.
According to Khatuna Saganelidze, the Manager of Donuts’ Café, the founders did not know how successfully doughnuts would be sold in Tbilisi.
“It was certainly a risk, but without taking certain risks business cannot exist. Popularity and success came after two years. Doughnuts were initially most popular among teenagers at the beginning. However today the situation has absolutely changed and Donuts’ Café is constantly being visited by people of all ages,” Saganelidze added.
“The beginning of the fast food business in Georgia held much risk, as it was an absolutely different and new feeding style being introduced. On the other hand the business should have been successful, as MacDonald’s did not have any competitors on the Georgian Market. These cafés carry a totally alternative feeding style and MacDonald’s products are not rivals of the Georgian traditional kitchen,” Kapanadze declared.
“Even today the infrastructure of the country is not yet refined, as we don’t have such big trading centres for fast-food cafés to be situated in. However the sales indexes and popularity of the product will grow. Baskin Robbins’ ice-creams are regularly distributed to most of the biggest supermarkets in Georgia, including: Populi, Big Ben, Zemeli and Continental,” Kulijanov said.
“At this level Baskin Robbins’ products are isolated to just one café which is directly hitting the business. The creation of a new trade centre with new fast-food objects would fix this problem,” Kulijanov added.
According to Gela Gelovani, the Director of Donuts’ Café, the profile of the café has changed.
“Today the cafés direction is the fast food system. Donuts’ Café offers its customers numerous salads and other products for dinner. Besides Georgian clients the café does have foreign customers who are well aware of the traditional American doughnuts. So the doughnut business in Georgia seems to be successful. The founders decided to enlarge the café and from Kekelidze Str. the café has moved to Abashidze Str. in the Vake District,” Gelovani declared.
“The traditional menu of the Donut café on Kekelidze str. mainly consisted of coffee and doughnuts. Today the café’s menu has extended and all popular salads are available to the customers. Now the café has a new direction and it is that of a fast food café,” Khatuna Saganelidze, the Manager of Donuts’ Café said.
According to Kulijanov, the components of the ice-creams are imported from Russia, America, Canada, New Zealand and Germany. The ice-creams themselves are made in Russia. This business is fairly expensive. Even the equipments and other technologies are exclusive. So they do cost a lot.
“Baskin Robbins’ café is limited in its menu system, as a customer can only buy ice-creams and products made from ice-cream, such as tarts, cakes, or cocktails. Renovations of the menu are made twice a year. All brand new products are represented as samples, but only popular ice-creams are re-introduced time after time,” Kulijanov said.
“Some of the ice-creams have very specific tastes. They are not acceptable for Georgian clients and these types of products have a very low sales index. Traditional ice-creams have the best sales index: vanilla, strawberry, and chocolate. The Georgian Baskin Robbins possesses 30 types of ice-creams. All of them are exclusive, customers can only get them in this café,” Kulijanovi added.
According to Kapanadze, the Georgian MacDonald’s is cooperating with a classical franchising system. All products represented in the menu are identical to the American one. The Georgian menu undergoes several seasonal renovations.
“To keep the original MacDonald’s quality, all components and products are imported from abroad. Ingredients are carefully tested by the Head MacDonald’s commission,” Kapanadze added.
“Traditional American baking technologies in the Georgian Donuts’ Café are absolutely kept. The bakers and cooks have been trained by American specialists in Georgia, from the very day the café was opened. The founders imported expensive baking technique from the USA. Doughnuts need expensive ingredients, all of them are imported from abroad. Not using expensive ingredients for the purpose of being economical is simply not possible. In such a case the doughnuts would lose their characteristic flavour,” Gelovani, Donuts’ Café declared.
“Baskin Robbins’ ice creams are generally expensive and the price is not acceptable for a large percentage of the Georgian population, according to the current economical situation. However the Georgian Baskin Robbins tries to keep the prices as low as possible compared to in other post soviet countries. The starting price of ice-creams is at GEL 2, 60. Baskin Robbins’ ice creams are not the most expensive in Georgia. French and German ice-creams represented in the supermarkets nets are far more expensive. Such ice-creams have premium quality and are for premium class customers only unfortunately,” Kulijanovi said.
“Today the café has 19 kinds of doughnuts and the best selling index is made by them. Customer number and sales indexes grow by 40% in periods of fasting, as many people keep fasts today in Georgia. A customer can have a cup of coffee and donate GEL 5 at the same time,” Saganelidze, Donuts’ Café said.
“A dinner will cost GEL 20. These prices are absolutely suitable for today’s market prices. According to the cafe’s statistics, 80% of Vake and central districts visit the Donut Café on a regular basis. The occasion of the greatest ordered donut index from the suburbs consisted of 180 donuts. 300-400 donuts are sold daily in the café and the cost is GEL 1-1,4,” Gelovani, Donuts’ Café declared.
According to Kapanadze, MacDonald’s sales indexes are increasing monthly, but the exact amount is confidential.
“The amount of customers has grown from 30-35 % in one month. This is an excellent index,” Kapanadze added.
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