Paying a salary of 1000 euros today costs the company about 1600 euros.
How many Ukrainian cuisine restaurants does Estonia need, and about the impossibility of doing business in Ukraine today, "Delovye Vedomosti" spoke with Miroslav Pisarevsky.
-Before we start talking about prices, about how restaurateurs earn and what they spend money on, say a few words about your business in general.
-We have two brands and two companies. The main one is Faina Ukraina. Under this name, we are well-known in Estonia; we have been operating for almost four years. We are engaged in catering, delivery of Ukrainian cuisine dishes, off-site events, and festivals. For four consecutive seasons, we have been fully operational at festivals; we have participated in Grillfest for four years and represented Ukrainian cuisine at all major festivals in Estonia. At Rammstein, at Depeche Mode, at the Song and Dance Festival, you could see our food truck, "Kastrulka."
We even keep track of the towns we have visited over the years. To date, there are 48 of them. Estonian clients jokingly express surprise: "Do we really have that many cities and towns in the country?" We have even been to very small places, for example, in Uhtna, where about 800 people live together with the surrounding areas. There was a festival there, to which we were invited by the local authorities, and there were three times more people at it than the population of the settlement.
We have been to all major cities and county centers in Estonia, and in many of them, we have been several times per season. Moreover, by November, we already know about 90 percent of our calendar for the next year. Almost all weekends are booked, plus there will be additional catering and events. Opening a permanent establishment under the name Faina Ukraina is also a matter of the near future.
And there is also a sub-brand. Our café "Borscht and Varenik" in Kristiine recently celebrated its second birthday. We named the café after two signature dishes of Ukrainian cuisine. They are well-known even to Estonians. But not all Ukrainians are aware that there are at least 70 regional variations of borscht in Ukraine. There may even be more – three to five options for each region. We have up to ten types of borscht on our menu here every day. This is our basic menu. We also make ten types of varenyky, sometimes even fifteen.
Everything in our café is handmade, without freezing. We only don’t make Pepsi and Mirinda ourselves. And we have 10-12 types of Ukrainian beer on our menu.
-The main items on the menu are clear. Now let’s get to the most intriguing part. The prices.
-If we talk about the lõuna bufee, there is actually nothing revolutionary about it. In our café, you could already eat something for 1-2 euros. For example, deruny – we sell them individually; you can even take one for 1 euro. There are also syrniki, nalysnyky – pancakes with filling. Look at our varenyky too – they are of such size that you can eat them individually. Or a bowl of borscht. Our smaller portion, which costs 5 euros, is 300-350 grams. For Ukrainians, this is a small portion, but for Estonian cafés and restaurants, it is quite standard. And since the very opening, we have had a dish of the day for 5 euros. Or a large lunch combo with borscht for 9.90. The fact that you can eat cheaply here is not news.
Now we have launched a self-service lunch buffet in test mode for 3.90. It will fully operate in January; we are already expecting a special showcase from Germany – with it, we will be able to better present the entire assortment. The idea is to have two to three options for hot dishes, salads, and bread. Or a soup of the day – there will be a meat option and one vegan option every day.
The main difference is the freedom that the format gives to the client: you choose for yourself, you serve yourself. I wouldn’t say the dishes are simple. For example, when we first started with this offer, the dish of the day was another, less known, but still a hallmark of Ukrainian cuisine – a beef liver cake.
-Are you trading at a loss for 3.90, or does it allow you to break even?
-Overall, we are definitely not operating at a loss. But if there is some margin left with the soup of the day at that price, where the restaurant can, let’s say loudly, earn, then with the hot dishes buffet, it is already more complicated. With it, everything depends on the accuracy of calculations, sometimes on fluctuations in prices for certain products. In general, the answer is – it is enough to cover the main costs. Somewhere we will earn on turnover, somewhere we will introduce new clients to what we offer. Today, a client will order the lõuna bufee, tomorrow the main dish. Someone may want to have a glass of Ukrainian beer with lunch – and that already costs more than lunch.
-Let’s try to break down the components. What expenses are included in the cost of food for the customer?
-The main share, the key one today, is labor. Paying a salary of 1000 euros today costs the company about 1600 euros. And, of course, the worker is not interested in the gross salary and how much the employer spends on him; he is interested in the money he will receive in hand.
The second point is the tax component. The third is rent and utility payments; we have very significant energy consumption. And only in the fourth or fifth point will be the purchase of food products themselves. You know, there is a discussion in Estonia about reducing the turnover tax for food products. In my opinion, this will not have a significant impact on the situation.
What could have an impact is a reduction in the tax on utility payments. But if such a reform is carried out, I fear there may be serious problems with the budget.
There is no magic or deception in our numbers; it is hard for us too – very hard, as for everyone. Almost every day we see used restaurant equipment for sale in specialized groups – which means, unfortunately, someone else has closed down.
The restaurant industry is very dependent on the state of the economy. We have been operating as a café for just over two years. And we opened with borscht at 5 euros for a standard portion and 8 for a large one, but there is also a shot of horilka or uzvar included, and we are still working like that. We have not changed 90% of our prices in these two years. This does not mean that everything is so good. It means that somewhere we are reducing the margin, still cutting somewhere.
