STiR coffee and tea magazine

Volume 5, Number 3

Issue link:

Contents of this Issue


Page 47 of 67

48 STiR tea & coffee industry international / Issue 3, 2016 (June/July) By Vladislav Vorotnikov Ukraine Coffee Houses Feel the Heavy Impact of Crisis U kraine's coffee houses are struggling for survival due to an economic crisis, armed conflict that embroils the eastern portion of the country, and a sharp decrease in the pur- chasing power of virtually everyone. Despite these troubles, market participants look to the future with some optimism, claiming that the wave of revival is already under the way. According to Olga Nasonova, c.e.o. of Restau- rant Consulting, nearly 1,500 foodservice outlets closed in 2014. Include the Crimea and the embat- tled east and the figure climbs to 5,000. Nasonova estimates that in the past two years the number of coffee houses operating in the Ukraine declined nearly 25%. McDonalds Ukraine, which operates 79 restaurants in 23 cities, closed its Crimean res- taurants. "I do not want to exaggerate, but the restau- rant market is on its knees, with a serious num- ber of closures," says Kyiv restaurateur Elena Dtolyarova, adding that coffee houses as well as other foodservice businesses suffer from a num- ber of systemic problems related to the Ukraine economy. "Among the factors that mostly influenced the catering market in Ukraine there are: a lack of re- forms in tax system, a lack of available loans, high tariffs on communal services, devaluation of the There are significant differences in beverage preferences among Ukrainians living in the eastern and western regions hryvnia (currency), as well as significant reduction in the number of companies-importers of food and as a result - the lack of competition on the market of imported products, which leads to a permanent increase in the cost of raw materials," she added. According to Nasonova, the rise of rent is the single biggest problem as most fees are tied to hard currency. The Ukraine hryvnia has dropped nearly 2.5 times against the dollar and euro since the be- ginning of the crisis. For coffee houses in particu- lar the rise in the cost of imported coffee beans is compounded by the fact that most citizens cut back their spending on coffee out of home. "Coffee shops are completely dependent on the price of the dollar and the euro," said Alexan- dra Lazar-Borovitskaya, the owner of the Mindal Coffee Room, a chain of coffee shops. "Coffee machines, we have to buy with eu- ros at new exchange rates [after the collapse of Ukraine currency]. Coffee beans are priced in dollars. An even greater problem than currency is suppliers: due to currency fluctuations they are starting to postpone deliveries," he said. There are record numbers of Ukraine cof- fee houses up for sale or for rent, as owners who launched in better economic times have since failed to figure out how to keep their business profitable.

Articles in this issue

Archives of this issue

view archives of STiR coffee and tea magazine - Volume 5, Number 3