Food: Bread and Meat

This chapter examines four cases from the food industry: three bakeries from Tver and the Cherkizovsky meat processor in Moscow. The unique conditions of Russia’s food industry provide numerous insights into the opportunities available to aggressive and savvy managers. The food industry cases also force a reconsideration of the quality of Russian managers, who, when given the opportunity to succeed, demonstrate exceptional competitive spirit and ability. Because demand for food is inelastic, “payability,” the low income of customers, has a much smaller impact on food industry firms. Food is nondurable and purchased frequently, so demand is relatively stable and predictable, providing good cash flow and less risk from inflation. ¹ Finally, production technologies are such that major changes in assortment and quality are possible with little investment.