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. Last Updated: 07/27/2016

Moscow's Mr. Coffee Sells Service With a Smile

It's the second-biggest business in the world, but when Jerry Ruditser opened his first cafe in 1995 on Kuznetsky Most, no one was in a hurry to wake up and smell the coffee.

"People kept asking me what I was selling, and when I told them coffee they would say, 'and what else?'"

The idea of selling only coffee struck colleagues as the idea of an eccentric American with no idea of how business works in Russia.

When Ruditser, 34, opened the first Coffee Bean, there were no other coffee shops in Moscow.

Russia was essentially a land of tea drinkers, but Coffee Bean quickly made converts both to coffee and to cafe culture. "They'd come in out of curiosity, and then they'd come back with their family and friends," he says.

A cozy, bohemian atmosphere reigns at the Kuznetsky Most branch, which seats about 20 people. In the early days, people would sit cramped on the floor — and it wasn't long before Ruditser opened a second shop that seats 100 people, and he opened his third on Tverskaya Ulitsa in October 2000.

Ruditser, the son of Russian immigrants, came to Moscow for the first time in 1990 to discover his roots. He tried selling other things before coffee, such as food-processing equipment. It was through the food industry that Ruditser realized Russia was lacking two things: good service and coffee shops, which were taking the United States by storm.

"The food industry is the pits in Russia, and I wanted to do something to change that," says Ruditser.

Ruditser's idea of friendly service was quite novel in a country where smiling at a customer is a sign of insanity — but it guaranteed him success.

"Everybody likes to be treated like a human being, it's just that in Russia it hasn't been done for a long time," chuckles Ruditser.

But overcoming cultural differences took time. It was easier for Muscovites to swallow the bitter brew than the alien concept of service with a smile.

A common scenario, says Ruditser, was that "a customer would walk in, staff would smile, the customer would then leave the store and come back two minutes later and ask, 'Do you know me?'"

And finding staff who would offer such a service was not easy. "People would call up and I'd ask, 'Can you smile for 12 hours a day?" and they'd say, 'What am I? A horse?!'"

But times have changed since 1995, and there are plenty of other cafes in competition with Ruditser. Some of these were set up by former Coffee Bean employees, and his staff are constantly poached by rivals. But Ruditser doesn't complain: Imitation is the best form of flattery.

"I developed this culture of going to a coffee shop, and that's not a bad thing. Five percent of a $10 billion market is better than 100 percent of a $100,000 market," says Ruditser.

Places like Coffee Inn, Shokoladnitsa and Coffee Mania were all set up by former staff and have helped shorten the long queues outside Ruditser's shops.

"People used to grumble about the length of the queues, and queues are never good business. But having gone elsewhere, a lot of people came back and decided they're prepared to wait a little for our coffee," says Ruditser.

"Everyone comes here. You get the loyal customers who come in two or three times a day and people who want a nice place to hold business meetings. Then there are the students who can't afford to take their girlfriends to a restaurant, but can afford a couple cups of coffee and a dessert," says Ruditser, casting a look around the bustling cafe off Chistoprudny Bulvar.

And now Russians have their own coffee-drinking traditions.

"Russians won't take coffee to go — they prefer to sit down and enjoy it," says Ruditser.

Times haven't always been bright for Coffee Bean. At the time of the ruble devaluation in August 1998, Ruditser's two cafes took quite a hit. "The crash was tough. Our sales dropped by 75 percent, which is significant," he says.

Ruditser, however, insisted that staff should be paid full salaries and prices should only change at the start of each week. He believes this is partly why Coffee Bean was able to stay in business when others were wiped out.

"There were times when it got really bad, sure," admits Ruditser. "But our customers did not abandon us, and that's why we're still here."

Coffee Bean had clearly plugged a gap and had a sufficiently strong grip on the market to survive the crash and its aftermath. There was a different mood after the crisis.

Customers who had previously come in and ordered five cakes and taken a bite of each just because they could suddenly got over that habit and ordered just one.

"It was bad for business, but I suppose it was a good thing overall; it made people think about tomorrow," says Ruditser.

And, having survived the crash, Coffee Bean only got stronger. Annual revenues are around $2 million, and Coffee Bean has plans to open two more shops in the near future.

"We're looking for sharp people," announces Ruditser.

Coffee has never smelled so good.