Heating Up the Pizza Business

The economic crash of 1998 was a heavy blow to Kato Hetschinof's pizza business. With all his savings lost, he tried to lure customers with cold-cut platters and hot foods like meat loaf and chicken Parmesan.

But the 42-year-old New York native quickly corrected his lapse of judgment. "I said, 'Aren't we were losing focus on the pizza?'" he recalled.

For 13 years, Hetschinof has been all about pizza. When others were selling cold sandwiches and salads, Hetschinof's mind was on another track because, as he put it, "pizzas are hot."

Hetschinof, who is now director of operations at his former rival, Jack's, claims to have formed Moscow's first-ever pizza delivery service in the summer of 1994.

The American of Russian descent arrived in 1992 with a background in hospitality. While working for DHL in Moscow, he kept running up against the same problem: He couldn't find a bite that agreed with his taste buds.

"We were limited to McDonald's, two Pizza Huts, and foods full of mayonnaise and bread crumbs," he said, between bites of chizburger royal and swigs of vanilla milkshake at the Tretyakovskaya McDonald's.

Seeing the example of Jack's, a sandwich delivery service started in 1992 by then-CBS correspondent Jack Brady, Hetschinof decided to start something similar, but with pizzas. "I'm an entrepreneur by spirit," he said.

Hetschinof unveiled his delivery service in 1994 with a business partner. The two, both Leos, combined their zodiacs and changed it into "Tulio's" to make it sound Italian ("'Two Leos' sounded too Chinese."). They bought bread factory No. 2 near Belorusskaya metro station, complete with its defunct cafeteria, and renovated it into a pizza factory.

Their first menu included the Empire Pizza for $9.95 -- a cheesy homage to New York -- and the Kamchatka, with scampi sauce, shrimps, crabmeat, mussels and peppers.

His business also went online. In 1994, at around the same time that Pizza Hut's online order service PizzaNet debuted in tech-savvy Santa Cruz, California, Hetschinof started accepting orders from his web site. But there weren't any, he said, because no one in Russia at the time would order food through the Internet.

To hedge Tulio's against competition, Hetschinof slapped a 15 percent discount on all orders from the U.S. Embassy -- a surefire source for pizza-hungry Americans -- and talked to everyone personally.

Vladimir Filonov / MT
Hetschinof now works for his former rival, Jack's.
That's how, said Vasily Strelnikov, then the voice behind Radio 7 and subsequently of MTV Russia and Radio Moscow, he got to know his pizza guy personally. "He used to call the morning show a lot," said Strelnikov, who used to see Hetschinof at Radio 7 promotions. "He was one of those expats who was always everywhere."

Hetschinof was indeed everywhere -- he was even there providing sustenance for the crew of "The Saint" when it came to Russia for filming -- but contrary to his claim it seems he didn't get to Moscow first.

Pizza Hut says it came earlier: It started delivering in 1991, said Mikhail Bogdanov, marketing manager for Yum!, which owns the franchise in Russia. Pizza Hut has even boasted that during the August 1991 coup, Boris Yeltsin placed an order for its pizzas at the besieged White House, though admittedly the president did not have to go through an official delivery service.

First or not, Tulio's satisfied the cravings of many Western expats in the early '90s, a fact that some remember fondly.

"Despite the crazy Moscow traffic, Tulio's would deliver really quickly, and with a smile, which was unusual in those days," Strelnikov said of the '90s. "Part of it was that Kato is just like that himself."

Expats were his main clientele, Hetschinof said, and he had the largely Western staff of CNN, CBS News, NASA, British Petroleum, NBC, American Tobacco and Price Waterhouse eating his pizzas.

Despite his attempts to salvage the business with cold platters, the 1998 crash ultimately forced Hetschinof to fold his business because all the profits that he had saved in Russian bank accounts were lost. Hetschinof then went briefly into what he called "the next wave" -- coffee-shop chains -- working on marketing for Coffee House, Coffee Bean and Zen Coffee, but he eventually returned to pizzas.

"I just want to see a perfect pizza in Russia," he said.

"It's one of the most-

accepted foods -- a global food," Hetschinof said, channeling Mikhail Gorbachev circa 1997. "Pizza," the leader had said on the release of a controversial Pizza Hut television commercial where he appeared with his daughter, "is for everyone."

Democratic it may be, but Russian, according to Hetschinof, it is not. The perfect slice, he said, must be made with imported flour. "In Russia, there are three types of flour: Flour No. 1, Flour No. 2 and Flour No. 3, and that's it," he said.

His advice for anyone wanting to get a slice of the pizza delivery market in Moscow: outsource ingredients. In the United States, for example, pizza flour is sold pre-mixed with the optimal gluten and starch contents.

"Give him a task, and he'll dictate how to get it done," said Mike Falcone, who worked for Hetschinof for half a year at Tulio's. That is part of the reason why Tulio's was "the best pizza I ever had."