My brother Bob was in Moscow negotiating with InTourist to use his hotel computer system when the first MacDonald’s opened. The Soviet Union was changing, and on a cold January morning in 1990, something completely new appeared on Pushkin Square. It was the golden arches of McDonald's - but getting those burgers and fries onto Russian plates took years of behind-the-scenes work.
The biggest challenge? Russians had never grown the right kind of potatoes for McDonald's fries. The company had to teach local farmers how to grow new potato varieties and build special warehouses to store them through the harsh Russian winters. They couldn't just order beef patties from existing suppliers either - they had to build their own meat processing plant and train Russian workers to make them.
Even something as simple as a hamburger bun was complicated. McDonald's built a massive facility outside Moscow called the "McComplex" where they made everything from scratch - the buns, the patties, and even prepped the vegetables. They brought in experts to teach Russian workers every step of the process. They even assembled a fleet of trucks to both pick up from local farmers, but then deliver to the first store. It was the result of 14 years of planning, investing, training and building.
When the restaurant finally opened its doors, the response was overwhelming. More than 30,000 were in line and they waited for hours in the winter cold. McDonald's tried to keep things fair by limiting each customer to ten items, but enterprising Russians quickly figured out a way to profit. They'd buy their full ten-item limit, keep what they wanted to eat, then walk down the massive line of waiting customers, reselling their extra burgers at marked-up prices. Some people made several days' wages in just a few hours of burger-flipping - not the kind McDonald's had in mind!
Bob said he knew that capitalism was alive and well in Soviet Russia. By the end of that first day, more than 27,000 Russians had tasted their first Big Mac, some paying standard prices, others paying a premium to the resourceful "entrepreneurs" in line. Over the next 30 years, before McDonald's left Russia due to the Ukraine conflict, they had grown to around 850 locations across the country,
Very interesting. My employer PepsiCo, Inc. was also early involved in Russia by setting up botttling plants and selling beverages to Russians. The initial problem was getting paid for its investment and products. It did not want and could not use Russian currency because it was not "hard" money traded in the international market. The solution was that PepsiCo was paid for its Pepsi Cola syrup with bottles of Stolichnaya vodka, on a liter for liter basis. We received a lot of "Stoly" and then used a U.S. subsidiary to wholesale it in the U.S. As employees, we received a lot of Stoly at Christmas and when we visited headquarters. I kept hoping for an acquisition of a scotch …
Great story! Thanks for sharing!