- Alexander Pavlovich Merbaum: general data
- Alexander Pavlovich Merbaum biography
- Success story
- Cafe opening
- Business expansion
- Conquest of the Moscow market
- Further progress
- Alexander Pavlovich Merbaum in social networks
- Alexander Pavlovich Merbaum interview
- Three directions
- Six partners
- Zero Credits
- 20 million customers
- Sample cheese
- A worthwhile experience
- Burger trend
- 20% per shelf
- Fluctuations in demand
- Every day to the office
- Alexander Pavlovich Merbaum photo
Alexander Pavlovich Merbaum: general data
- Full name: Alexander Pavlovich Merbaum
- Date of Birth: January 15, 1957
- Place of birth: Samara
- Height: –
- Weight: –
- Brief biography: Alexander Merbaum was born on January 15, 1957 in Kuibyshev. In 1979 he graduated from the Kuibyshev Polytechnic Institute. He worked in the Kuibyshev Aggregate Production Association, rose from a foreman to a deputy shop manager. In 1989, he entered the film distribution business, heading the Tandem company in Samara. In 1993, he became a co-owner of the U Palych trademark, first worked as a commercial director, and then as director of the Kompaniya-M food plant.
- Education: 1979 – Samara State Technical University, Faculty of Mechanical Engineering and Road Transport, Department of Automation of Technological Processes in Mechanical Engineering
Alexander Pavlovich Merbaum biography
U Palycha is one of the main suppliers of confectionery products in the country. Over the years of its activity, the corporation has turned from a local cafe into an all-Russian supplier specializing in natural products. And it is unlikely that the company “U Palych” has gained such popularity, if not for its CEO Alexander Pavlovich Merbaum.
Alexander Merbaum was born in 1957 in Samara. The future businessman studied at the local school No. 68, after leaving which he entered the Samara University of Mechanical Engineering. But the man managed to find his calling in a completely different area.
Merbaum’s entrepreneurial activity began at the very beginning of the 90s. It was a difficult time when even a banal visit to a cozy cafe could brighten up the citizens’ evening. And in 1991, a small restaurant called “At Palych” appeared on the territory of the city. This modest 4-table establishment quickly gained popularity, by 1994 it moved to a larger building in the city center.
A distinctive feature of the cafe “At Palych” was a variety of dishes made by employees with their own hands.
Only natural products were used for production, while the menu included mainly dishes from Russian cuisine. And already in 1995, a full-fledged restaurant was opened, capable of boasting a menu of more than 300 items. To maintain the proper atmosphere in the institution, folk music was played every evening, which can cheer up.
In the wake of the restaurant’s success, Alexander Merbaum expanded his business by creating his own plant in 1996. High-quality semi-finished products were produced on the territory of the plant: dumplings, dumplings, pancakes and manti. And to date, the list of manufactured products can be safely called one of the most extensive in the country. All of their culinary products are made by hand.
Conquest of the Moscow market
By the end of the decade, the fame of U Palych reached the capital. This allowed the businessman to enter the Moscow market and open a representative office there. Then a full-fledged production workshop appeared in Moscow, which had a noticeable success. Further, similar enterprises began to appear in St. Petersburg, Kazan and other large cities of Russia.
Over the course of the next decade, U Palych Natural Products Corporation has consistently delighted residents with new positions. At different times, enterprises for the production of chocolate and ice cream arose, without which the Russian people cannot imagine their life. And despite the growing competition, Alexander Merbaum’s business project continues to hold a leading position to this day, bringing the CEO a multi-million dollar income.
Alexander Pavlovich Merbaum in social networks
- Official site https://palich.ru/
Alexander Pavlovich Merbaum interview
Alexander “Palych” Merbaum: “It’s harder to make money on natural products”
Interview from 24.10.2016
The legend of the Samara business, one of the three entrepreneurs who stood at the origins of the U Palych trademark, in an interview with Volga News, told what productions and processes the brand unites now, where does the money come from, what kind of meat sausage is it, why is butter you have to bring it from New Zealand and how much it costs to get on the shelves.
– What businesses currently operate under the U Palych brand?
– There are three main directions. Firstly, a production facility with two sites – in Samara and Moscow.
Secondly, the sale of products through a branded network – about 300 stores that belong to us and the franchisee. About 40% of our products are sold through them, the remaining 60% – through federal and local networks.
Thirdly, catering. Now we have four establishments in Samara – two burgers, a cafe “Pumpkin”, a tavern in the Zhuravel shopping center. And recently opened the first cafe in Moscow.
Projects with premium chocolate and ice cream mini-factories stand a little apart. We have two chocolate boutiques that sell our own chocolate, and nine of our own ice cream mini-factories in shopping centers. Our ice cream is also franchised, and we also sell mini-factories themselves.
– How is income distributed in these areas? Do you share them financially?
– Each area is handled by separate legal entities with their own management and reporting. Of course, the company receives its main income from production.
– Can you announce absolute financial indicators?
– Which company performs the functions of a manager?
– We don’t have such a structure. Each direction has a director, under him there can be several companies. At the same time, Moscow and Samara structures do not intersect.
Now I tell all my employees that we are all Palychi.
There is a company that owns assets – land, buildings, equipment. And there are firms that rent space and equipment from her and are engaged in production. There are two production companies in Samara – “Company M” (Samara site) and “Company K” (Kinel site).
There are legal entities, about five, that run branded stores, and there are sales divisions that work with federal and local chains.
– How many partners are there in Palych now?
– In Samara business – three, in Moscow – six, including Samara.
Each of the partners has a share commensurate with the contribution made once – monetary or otherwise. When we negotiated with Moscow partners, we singled out our trademark and experience as an asset that we contributed to the new enterprise.
Then we did not redistribute the shares. Actually, no one wants to leave, and we do not consider proposals for entry.
In Moscow, they initially built production with new partners, as they considered that the locals would be able to manage better and know the market better.
– Does the Moscow enterprise belong to all founders in equal shares?
– Initially, there were unequal contributions and, accordingly, unequal shares now. Not ready to reveal details.
– Is there such a thing as senior or junior partner?
– It is known that a few years ago Robert Gallyamov was a member of the company, having bought the share of Andrey Suldin (one of the three founders of the company. – Ed.), but quickly went out of business. What happened?
We have a rule never to take loans. We develop only at our own expense.
– Gallyamov had personal problems, as I understand it.
– Do you keep in touch with Suldin? Did the breakup happen without conflict?
– I would say that there was no conflict from our side.
We don’t keep in touch, but we have many mutual friends. Previously, his fate was traced in conversations. Then he broke up with our friends, so I know little about his affairs.
– “Palych” – is it from his patronymic or from yours?
– In 1991, he opened the first cafe. The institution was in the “Contemporary” on the first floor. And I had a company on the second – we were engaged in film distribution. Then we got to know each other. It turned out that Suldin was forced to close that cafe, but he offered me to launch another one together. We have attracted a third investor. In 1994, the first joint cafe was opened on the street. Buyanova, 106.
Now I tell all my employees that we are all Palychi. Especially those who have been working for a long time. And there are a lot of them. This is a collective image.
– Where do you attract investments?
– We have a rule – never take loans. We develop only at our own expense. Therefore, we are growing, maybe not as fast as we could, but we are constantly in forward motion and are not subject to many fluctuations.
– Where does this principle come from?
– Somehow it happened by itself. We don’t give ours to anyone and we don’t take others’. All partners agree with this philosophy.
– Do you plan to place shares on the market?
– Not yet. We still need to improve. And yes, we have enough money.
– Were there any offers to enter the business, to sell it?
– We have never considered proposals for entry. We agreed that we work with existing partners.
Acquisition offers come up from time to time. Probably every businessman wants to sell if there is a good price. But we have not yet reached the point where we could say to ourselves: “We are so cool, but something is reluctant for us to continue doing this. Let’s try to sell.”
– What was the maximum offer?
– There were not quite adequate proposals. And then – we have never entered into any trades. Until you want to.
20 million customers
– Is Moscow the sweetest market?
– The sweetest and most complex. The competition is very big.
– And Oleg Tinkov, apparently from the experience of Daria dumplings, said in several of his programs that the Moscow market is easy to conquer, and noted the inertia of the players.
– Tinkov and I went to Moscow almost at the same time. In 1998, we sent the first car of frozen semi-finished products to the capital. Indeed, the market was then completely empty, it was quite easy to start. Moreover, we did not spend money on advertising – we had no money. Word of mouth worked for us.
It was, but it was 20 years ago. Then there was the manufacturer’s market. Now there are a lot of competitors, and besides, retail chains dictate their own conditions. Moreover, these conditions are getting tougher every year.
Moscow is 20 million buyers, five of which are very wealthy. But that’s exactly why everyone wants to go there.
Since we have our own production in the capital and we are not engaged in resale, we feel quite comfortable.
Now we are thinking about launching the production of soft cheeses.
– How many of your brand stores are there in Moscow?
– There are about 250 outlets in Moscow and the region, along with franchises. But it becomes more difficult to develop a network every year – there are fewer and fewer suitable premises. In addition, in Moscow, we were seriously injured during the “night of buckets” when buildings near metro stations were demolished. We had to shrink a little.
The main deterrent to development in Moscow is the high cost of renting premises. We do not have such a high profitability at the exit so that we can afford to trade in the Central Department Store. Although I really want to.
At the same time, it is in the development of our own trading network that our main potential is. The larger it is, the more we can sell without additional costs. Here, unlike federal networks, we do not need to spend money on bonuses, compliance with special conditions, money is returned faster, and there is also a direct dialogue with the buyer.
– Are there any strategic goals in terms of developing your own network?
– There are certain plans, but they are, let’s say, creative.
– What is the share of franchise stores? And why was the franchise closed for Moscow?
– About half of branded outlets are franchised. In Moscow, we were forced to introduce restrictions. We considered that there is no need for more franchisees and the network will be able to successfully develop existing ones.
We have about a dozen franchisees there, and they themselves asked us not to create conditions when new ones start stepping on their heels.
– Do you carry products from Samara to Moscow?
– We mainly supply frozen semi-finished products to Moscow. In the capital, we produce confectionery, salads, pastries and ready meals. These products do not go to Samara, they are sold in Moscow and the regions closest to it.
From Samara we carry products mainly to the regions of the Volga region – Tatarstan, Bashkiria, Ulyanovsk region, etc. Our extreme point is Yekaterinburg.
– Do you place orders with third-party manufacturers?
– No. We are self sufficient.
– What about the franchise?
– There were many offers. But in this scheme, the issue of volume and quality control comes to the fore. In addition, by transferring technology, we do not receive guarantees. Today the franchisee will make “At Palych” using our technology, and tomorrow – “At Petrovich”.
– Do you have your own resources to increase production?
– There are capacities. In addition, we are always in a state of expanding production capacity. Now we see that frozen products are sold worse and the consumer is shifting towards chilled products. Accordingly, we are also adjusting.
Not so long ago, we launched sausage production. Now we are thinking about launching the production of soft cheeses.
– Is cheese a subject of sanctions?
– It’s not even about sanctions. It just didn’t taste good at all. And I want it to be both tasty and not harmful to health.
Tried to sell frozen semi-finished products in Germany and Austria.
– And more or less affordable?
– For the price, it’s already quite heavy. But you can eat not kilograms, but grams. For example, in our chocolate boutiques we have the opportunity to collect one candy from the entire range.
– Do you plan to produce cheese in Samara?
– Yes. We are from the site on the street. Maltsev moved the production of frozen semi-finished products to Kinel. Now all of our meat-related production facilities are located in Kinel. And on Maltseva we freed up areas, to which, in particular, we transferred the production of ice cream from the street. Sandy, where we rented a room. And we still have a place for a small cheese production.
I hope that at the beginning of 2017 we will start selling something, but for now only in our branded stores.
– Have you already found milk suppliers?
– We are looking for, and this is the most difficult moment.
– No plans to start your own farm or dairy?
– It’s difficult. Maybe it would be right to do this, but these are very large working capital.
A few years ago we looked at factories in the Samara region that were put up for sale. It was impossible to look at them without tears. Buy something to demolish and rebuild everything …
We did it in Kinel, but there is a very convenient platform – a large territory, provided with energy, water, and not far from Samara. However, we had to break everything there and throw out the old equipment, build an administrative and economic block, a new freezing complex for 3 thousand square meters. meters.
If we make the first step with cheeses, we see that they are in demand and there will be no problems with raw materials, then maybe we will build a dairy plant on the Kinel site. But only the most automated.
A worthwhile experience
– Do you currently sell anything abroad?
– We finished doing this a long time ago. At the very dawn of the trademark, there were agreements with the French on the sale of gingerbread in Paris. Then they tried to sell frozen semi-finished products in Germany and Austria.
We also considered options for the production of semi-finished products and cakes in Germany. But they have very expensive labor, especially manual labor – it is insanely expensive. We calculated the cost of personnel, taxes … The dumplings turned out to be “golden”.
Well, nobody needs our product there, except for Russian speakers.
– There are a lot of them…
– A lot. But, leaving the “scoop”, they saw a huge variety of products. Although there are Russian stores in large cities, this is not about us.
I talked with the directors of the organizations to which they belong – the most popular goods there are sprats in tomato, pickled tomatoes and, of course, vodka. This is a nostalgia business.
And the younger generation that grew up there is already assimilated.
We, in general, understood that the market was unpromising. It was an image element.
Now you can make “Doctor’s” sausage – you’ll eat your mind, but there won’t be a single gram of meat.
On top of everything else, we ran into our former compatriots who “dumped” us. There was a story with a former military pilot, lieutenant colonel from Moldova. We shipped a lot worth a very decent amount to his warehouse in Austria. He bankrupted the company, and from the same warehouse, another of his companies sold our products. Not a single Austrian court sided with us.
In general, there was such an experience in Europe. I can’t call him stupid. We opened this market for ourselves, and we closed it.
– You started with catering, and now it is only a small part of the business. Why did it happen?
– At one point, we realized that in a restaurant or cafe we can reach a limited number of people. In production, these boundaries are much wider.
– And if you expand the catering network?
– We have an idea to develop burgers. They are in trend now. At the end of September, we participated in an exhibition with a burger franchise project. Let’s see how this topic develops.
The idea was just born from the fact that it was necessary to look for new distribution channels. We can make the main ingredients at our production site, and bring them to the buyer in the burger shop.
I would also like to try opening coffee houses. We have a large assortment of tea and soon there will be coffee from Palych, as well as a lot of confectionery. Well, our production is very flexible, and we can make a separate assortment that will not be presented in stores.
– Is this project also designed for a franchise?
– No. As long as we do it ourselves.
We cannot find normal butter for confectionery production in Russia.
– Judging by your account in one of the social networks, you like beer. Have you thought about making it?
– There were certain ideas. We even negotiated 8 or 10 years ago. There is a wonderful pub in Düsseldorf Im Fuchschen, where they pour their own beer – red, which I really like. In principle, we agreed with the owner of that pub that he would supply us with production.
We counted on a small beer factory with sales through its outlets. There was, in particular, the idea to make a beer restaurant. But it didn’t work out – it didn’t work out at first with a good room, then free funds were put into another project. As a result, the topic came to naught. Until the hands reach no more.
– In the near future, in addition to cheeses and coffee, do you plan to introduce new products?
– We are not planning anything else from new directions. But we always have room for maneuver in existing ones.
20% per shelf
– Is it difficult to work in the industry? What hinders the most?
– It’s interesting to work, but there are enough problems. I can single out three main negative factors – the dishonesty of the producers themselves, poor regulation of trade and the lack of good suppliers.
The main factor, oddly enough, is the dishonesty of the manufacturers themselves. The general tendency of Russian manufacturers is to make low-grade products: this does not require much intelligence and investment. On the labels it is written about the meat of young bulls, but in the product there is no meat in principle.
We make wonderful sausages, I think they are the best in the country. But, besides us, it is produced in large quantities by large meat processing plants. And they have tamed the consumer to “chemistry” to such an extent … Now you can make “Doctor’s” sausage – you’ll eat your mind, but there will not be a single gram of meat.
When we were building a sausage factory, we focused on the experience of a small German company that produced traditional natural products. There we were helped to choose equipment and technologies – German, Italian and Spanish. We thought that high-quality sausages would organically complement our assortment.
Before the launch of the plant, two test batches of “Doctor” were produced: the first – according to GOST of the 60s, the second – according to TU, as most do now. According to TU, a pink and very fragrant sausage was obtained, in which, due to additives, there was no taste of the meat itself. According to GOST, it turned out not so fragrant and bright, but most importantly – an unusual taste. It turned out that we simply lost the habit of the natural taste of meat in sausage.
Unfortunately, during the post-Soviet period, the consumer got used to eating “chemistry”, forgot the taste of natural products. The cost of our products is, of course, higher, and therefore we cannot sell them in large quantities. But she found her buyer: first of all, these are people who care about health. We cannot make low-quality products in principle.
So, if manufacturers competed in good faith, releasing a normal product, everyone would only win.
We are forced to raise prices, firstly, sanctions, secondly, the annual increase in the cost of energy from 12 to 25%, thirdly, high inflation, due to which it is necessary to index salaries, etc.
– Probably the margin on a good product is not the same…
– Low-quality margin is small. But there it is possible to produce and sell huge volumes due to the low cost. Making money on a natural product is more difficult.
– Trade regulation is about retail?
– Yes. We have an absolute dominance of networks that dictate their terms.
– How much do you spend on presence in networks?
– We calculated on the example of an agreement with one of them – it turned out about 20% of the total volume.
Fluctuations in demand
– What’s wrong with suppliers?
– A specific example. We cannot find normal butter for confectionery production in Russia. Previously bought German. Now we take New Zealand, because they are not subject to sanctions, and Belarusian.
Despite the fact that there are many dairies in the country, and we even had a contract with one of the local producers. But to make a quality product, you need to make an effort, find good specialists. And it’s easier not to stress.
– What else do you have to buy abroad from what could well be produced here?
– We are bringing a berry. There is no good berry in the country. We work in Polish. Raspberries, strawberries and cherries go to dumplings and confectionery. After the imposition of sanctions, the same berries come to us with labels of “producers” from other countries.
We grow berries, but it is difficult to make a quality product out of them.
– A question of technology?
– Technology, selection and demand. There are few such manufacturers in Russia who need New Zealand oil. The rest is enough of the quality that local producers give. And often just “chemistry” is enough.
If there were many people like us, then I think the producers of the same oil would catch up.
– What adjustments did the sanctions war and the jump in currencies make?
– For nuts, for example, the price has tripled. Now a kilogram costs more than a thousand rubles. At the same time, most likely, the manufacturer is the same, only a different supply chain.
Local producers also raised prices, taking advantage of the shortage situation. Unfortunately, we cannot increase the prices of our products proportionally, because no one will buy.
– Did you have to lift it anyway?
– Of course. Last year we raised it once by 10%, and this year we will probably raise it again. But while we think.
– Do you increase “in a circle” on all products?
– It turns out that practically for all, but unevenly – somewhere by 5%, somewhere by 13%. Somewhere we do not raise at all. We approach differentiated, because it is always an outflow of buyers.
In fact, we are forced to raise prices – firstly, sanctions, secondly, the annual increase in the cost of energy resources from 12 to 25%, thirdly, high inflation, due to which it is necessary to index salaries, etc. d.
I just say that I would do this or that, and the director makes the final decision.
– Has the cadastral theme touched you?
– We are suing on one object, now we are launching a process on the second. Absolutely insane things – objects are valued two to three times higher than the market value. In France, there is a good law on this subject: if the state valued real estate more than its real market value, then the owner can sell it to the state at this price, and it is obliged to buy.
– Did you feel the outflow of buyers due to the fall in incomes of the population?
– There is definitely an outflow. The volume of production has decreased. But we always have seasonal fluctuations – an increase during the holidays and a decrease in the summer, especially if it is as hot as this year. In the summer we sank by 10-12%, but I hope that by the winter we will catch up and fit into our plans.
The situation is the same in Moscow. The crisis has just arrived. If earlier this was not felt in the capital, now it has become obvious that the purchasing power has decreased.
This is also felt in the behavior of retail chains. They do not bend yet, but have already started a dialogue with manufacturers. If earlier they said: “Only this way and nothing else,” now: “Let’s think together.”
Every day to the office
– Judging by the nuances that you reveal, are you also involved in operational management?
– I go to work every day. I’m interested. The company develops with my participation.
We must understand that we have a relatively small company and a lot depends on the participation of each team member.
– What is your motivation? Apparently, not only money, since you come to work every day.
– First of all, I haven’t retired myself yet. Second, I’m really interested.
– Is there any temptation to give management to hired managers and live for your own pleasure in warm countries?
– Our company has such experience. One of the co-founders of the Moscow company has been living abroad for a long time. He found himself in sports, travel. Everything depends on the character.
But I’m interested here. For 20 years of production activity, we have introduced a huge number of products. In 1996, we started with handmade dumplings. Now we have more than 500 types of different products – from freezing and confectionery to chocolate and meat gastronomy. And in order to bring them to the market, it was necessary to make, perhaps, 5 thousand positions – there is natural selection. Therefore, our work is also creative.
– That is, the drive keeps you from work? Or money too?
– No one canceled financial motivation. But now I can afford conditional creativity – the introduction of new methods and technologies. Here you always have to think.
– Are you the only one among the founders who takes direct part in the management?
– In Samara – yes. Other partners are doing slightly different things, also related to our business. Let’s say external relations.
– Do you have any personal projects besides “Palychev” ones?
– There is neither desire nor opportunity. I spend almost all the time here and, again, there is where to turn around.
And then, I’ll retire soon – in three months already 60 years old.
– Seriously? Will you show up at the office?
– Of course I will. But maybe not every day. In general, I have a dream to be a kind of wise adviser. Already now I just say that I would do this or that, and the director makes the final decision.
– And then you ask the CEO.
– We actually have a very businesslike relationship with the directors. We adopt a budget once a year, prescribe investments and expected profit. And that’s all. We came to this through experience.
There was a time when in Moscow six founders gave advice to one director, and they were often opposite. If a person needs it, he himself will come for advice.