Doner kebab and coffee. New Dodo businesses of 2020
02 December 2019
Next year, we will launch two new concepts—coffee shops and doner kebab houses. Pilot projects will be up and running in early 2020 in Moscow. By the end of the year, we will probably be ready to begin testing these new concepts together with our first franchisees.
Why doner kebab?
Doner kebab is a great product to build a large-scale chain upon. On the one hand, you can eat it on the go, and on the other hand, a doner kebab house can bloom into a full-fledged café with quite a diversified menu. Doner kebab is not just food. It has a large fan base. People like doner kebab whatever their status and income are. Also, this product can satisfy believers in healthy eating because it can be prepared in a thin lavash with light sauce, chicken, and fresh vegetables.
We see strong potential in this product and the market in general. There are about 5,000 venues selling doner kebab in Russia. Most of them are small booths. There is only one big doner kebab chain founded in Novosibirsk, with 115 locations in ten cities. Not so many for a big country and a popular product. How has this situation come about? Perhaps, it’s because doner kebab generally isn’t considered to be a very safe product. We, however, see it as an opportunity and even a mission, not a problem.
Recently, a great entrepreneur Magomed Kostoyev has joined our team. He is vastly experienced in the food service industry. He has been a restaurant manager, he has done analytics, supported other entrepreneurs, and created his own concepts. We think together we can create much more. So Magomed will be in charge of the doner kebab concept development in our company.
We’ve set ourselves an interesting and inspiring goal to create a unique and original modern brand and efficient format that will provide our customers with tasty doner kebab of high quality and quick service, and our franchisees—with sustainable and profitable business. We’re planning to develop this project three ways—small street booths, food court cafés, and full-fledged fast food cafés with dining areas. We’re getting started. Soon you’ll be able to try out our doner kebab in Moscow.
The coffee shop market in Russia is growing. Knight Frank consultancy company estimates it at 130 billion rubles a year, with 1 trillion rubles potential growth. Coffee consumption in Russia is far below that in European countries and the USA, at just an average of 21 liters a year per person. In contrast, in Finland they consume 200 liters of coffee a year, in Germany, 180 liters, and in the USA, 100 liters.
Over the last years, there was a dramatic growth in the coffee shop market in Russia. After the first wave (Shokoladnitsa, Coffee House), the second wave came (Starbucks, Costa Coffee, etc.), and then the third one, with alternatives (Double B and others) and coffee bar chains (Coffee Like, for example), and now we see the fourth wave of discounters with Cofix at the helm. By the way, small coffee bar chains have done a great job of convincing people outside of large cities to buy coffee for 100 rubles ($1.5)—previously, it was hard to imagine.
Why are we entering this market? Because we love coffee and see an opportunity to do something better there. We’re going to open a “digital first” coffee shop—ideally, 100% of orders will be processed via a mobile app. Why? Only to make a better product and create a better customer experience. Sales personification and immediate feedback from our guests on every order will allow us to manage coffee and service quality at an entirely new level. All our baristas will be highly invested in making our guests return to us again. In other words, we want to scale a difficult product and service through technology (as we do it with pizza).
Our coffee shop will not be a discounter—we’re going to make very good coffee, alternative including, and good food. Digital solutions will help us scale the quality. It’s a challenging and interesting task, because we’ll have to create an entirely new customer experience and a new format where everything can be different, from the coffee shop layout to the serving system. What should we do to make order processing via a mobile app more comfortable than a familiar system? We have a lot of ideas. Step by step, we will tell you all about it.
Our first small coffee shop will open its doors in Moscow next year in the same business center where our central office is located.