Russian Coffee Shop Chain Pushes International Expansion

Russian coffee shops have been increasingly turning toward international markets for expansion, Kommersant writes. Takeout coffee chain Pravda Kofe (Truth of Coffee) has started expanding to the Comonwealth of Independent States (CIS), opening its first locations in Kazakhstan.

However, since the brand is not recognizable outside Russia, it may run into hurdles in gaining a foothold on foreign markets, the newspaper notes.

Pravda Kofe currently has about 70 coffee shops in Moscow, St. Petersburg and Krasnodar, including franchise locations. Beverages make up the bulk of its menu, which also offers pastries and snacks. An average bill comes to about 150 rubles ($2.3).

The 2019-2020 strategy seeks the chain’s expansion in Russia and the CIS, a spokesperson said, adding that the company believes it is capable of opening dozens of locations in CIS countries. Pravda Kofe has a franchise partner in Kazakhstan but is unwilling to disclose it. The network is currently testing coffee-to-go locations and traditional cafes with seating. The company is also in search of new partners in the region that would be ready to open five locations or more, it said.

In the past five years, Kazakhstan’s market has been very receptive to Russian projects, particularly those in the food and service industries, said expert Anna Rozhdestvenskaya. According to her, the number of Kazakh investors who seek franchise partnership has been growing.

As for Russian coffee shops, the Double B network is also going global. According to its website, the chain already has locations in Dubai, Barcelona, Prague and Tbilisi.

According to Mikhail Burmistrov from Infoline-Analitika, a lack of brand recognizability is one of the main problems a chain may face when entering a new market. It may also need to adapt its products and pricing policy to local conditions. Besides, the coffee-to-go service is only just emerging in CIS countries and is not as popular as in Russia, the expert pointed out.