Kofe Khauz (Coffee House), in one of its older format cafes which are still common.

Guide to Russian Coffee Shops

Published: December 3, 2018

Coffee culture has come to Russia relatively recently – within the last few years – but has exploded within that name. Although there are now many chains and independent shops dotting Russian cities, covering kiosks, to-go windows, and sit-down shops, there are few chains that have managed to become truly “Russian” in that they cover a great deal of Russia’s territory. Below are profiles of three Russia-based chains that have managed to cover at least 10 Russian cities.

In an upcoming update of this article, we will also cover Surf Coffee and Coffee Bean, which also now qualify for this honor.

Russian coffee shops also face stiff competition in Russia from foreign brands – with McDonald’s / McKafe, Starbucks, and Coffeeshop (an Austrian brand) all figuring in the top five for popularity across Russia.

The following short introductions to some of the largest chains of Russian coffee shops was first created by Greg Tracey, an economics student who served as a Home and Abroad Scholar with SRAS in 2019. This guide is intended to introduce future students to the range of Russian coffeeshops as well as to some of the economics and history that created them.

 

Shokolodnitsa

Shokolodnitsa (Russian: Шоколадница) is Russia’s largest chain of coffee shops. It is a mainstay in Moscow, with locations in many other geographically diverse Russian cities, such as Saint Petersburg to the northwest, Irkutsk in the heart of Siberia, and Vladivostok in the Russian Far East.

Coffee shops are a booming industry in Russia. Although not usually associated with Russia as much as tea, the coffee industry has recently exploded. In 2016, for example, 519 coffee shops opened in Moscow versus 230 in 2006. An increasingly diverse range of chains and independent shops can be found in most major Russian cities.

Shokolodnitsa represents a higher end café niche, as far as chained cafes go. The customer experience in most Shokolodnitsas is said to be comparable to an Italian atmosphere, with a comfortable and laid-back interior. Additionally, it is very much a place to stay, eat, and visit, with drinks only composing 43% of its sales.

The first Shokolodnitsa was founded in Moscow in 1964. The Kolobov family were patrons there. After the fall of the USSR the family became restraunteers and eventually bought the premises of that first Shokolodnitsa, eventually turning it into today’s chain. Alexander Kolobov, the chain’s managing owner, says that he agonized over whether or not to change the name (translated as “Chocolate Girl”), but obviously it remained.

In 2000, the company began an effort to expand its operations and bring its experience more into line with other European cafes. One of the principles that Kolobov keeps in mind is that location is everything – although the chain is now ubiquitous in Moscow and St. Petersburg.

In 2014, its parent company, known as Gallery Alex, purchased fellow Russian café Kofe Khaus. At the time, Shokolodnitsa was Russia’s largest coffee chain and Kofe Khaus was in second place. Thus, Gallery Alex now towers over Russia’s coffee scene. The two restaurants, however, are still operated separately and under their own branding.

Shokolodnitsa’s reviews are decent, but some find it to be overpriced and wanting in quality and service. Either way, its prevalence makes it likely that one will find oneself there during a visit to Moscow.

Above: A short video about Shokolodnitsa.

 

One Price Coffee

One Price Coffee is a fairly recent arrival to Russian branded coffee shop chains and currently has twenty-one locations, all based in Moscow. One Bucks entered the scene shortly after the 2014 financial crisis hit Russia. It was a time of falling retail space prices, which helped lead to an explosion of new coffee shops and other cafes. It was also a time when many Russians were anxiously watching the dollar/ruble exchange rate, which had entered a period of severe volatility. One Bucks attempted to capitalize on both trends, opening a chain that sold a cup of coffee for the equivalent of $1 – based on the current ruble exchange rate.

The ruble has since largely stabilized at around 65 to the US dollar, but One Bucks has kept with the marketing ploy and is still serving coffee in Moscow. One Bucks operates a range of locations – from tiny to-go windows to small sit-down locations that it markets as ideal places to work and meet with other people. Overall, the walk-in locations feel pretty similar to an American chain like Dunkin’ Donuts or Starbucks. It also advertises its commitment to quality by emphasizing its training facility for baristas in the center of Moscow.

One Bucks has had some controversy. It was initially refused a trade mark due to the “One Bucks” name being adjudged by the Russian authorities to be too similar to “Starbucks,” which had already entered the Russian market. For a time, the chain was known as “One Price Coffee” – which didn’t make a lot of sense since the brand’s marketing ploy was that the coffee’s price would change regularly. It did, however, allow them to keep the visual elements of the original name and, now that they have one the right to use it, quickly adopt the new branding without much disruption. While it may seem that the registry office may have overreacted, it also seems that One Bucks intended to have their branding reflect Starbucks’ existing brand – as seen especially in their heavy use of dark green in their interiors – and employee uniforms.

Today, One Bucks’ online reviews are a mixed bag but seems it to be making a successful run at holding its place in an increasingly competitive market.

Above – One Bucks celebrates two years in Moscow by throwing a party for its employees.

 

Kofe Khaus

(owned by Shokolodnitsa now)

Kofe Khaus (Russian: Кофе Хауз) is the second largest chain of coffee shops in Russia. It is based in Moscow, where 108 of its branches are located. The chain is also present in Saint Petersburg, with 65 branches, and has some market coverage in the smaller Russian cities of Bryansk and Voronezh, and also has some locations abroad, such as in Kyiv, Ukraine.

Cafes are a booming industry in Russia. Although not usually associated with Russia as much as tea, the coffee industry has recently exploded. In 2016, for example, 519 coffee shops opened in Moscow versus 230 in 2006. An increasingly diverse range of branded and independent shops can be found in most major Russian cities.

Kofe Khaus features an American-style experience that attempts to appeal to a younger clientele. Furnishings are nice, but simple. Coffee and other drinks are an important part of its business model, but drinks only comprise about 60% of sales. A unique feature of Russian coffee shop culture is that locals rarely go out just for coffee, but instead usually order food to go with it. Thus, Kofe Khaus is not only a meeting place, but somewhere to grab a quick bite to eat and visit with friends.

Founded in 1999, the company has quickly expanded to include dozens of locations. However, it has experienced some contraction recently, with the number of coffee houses dropping from 209 in 2013 to 182 in 2014. All the same, its market share among chained cafes and coffee shops in Russia is 23.6% with annual turnover of $160-170 million—not shabby at all. It underwent a merger in 2014. Gallery Alex, a company which owns another, larger Russian brand, Shokolodnitsa, bought Kofe Khaus, but still runs the chain under its own branding.

Its new owners are changing that branding, however, to compete with increasingly available small coffee shops that specialize in quick to-go service. The new format, which has been unvieled in a few locations in Moscow, features generally smaller premises, at-counter service, and donuts that appear similar to those found at Dunkin Donuts and breakfast sandwhiches that appear similar to those found at McDonalds. Prices on many items have been substantially lowered as well.

Internationally, the company has expanded to Kiev, Ukraine, where it has met with some controversy. In particular, some have wanted to avoid supporting a Russian company in the post-Crimea political atmosphere. An additional complaint of some Ukrainians is the use of the Russian language in the establishment, rather than Ukrainian, although Russian is a widely used language in Ukraine in general and in Kyiv in particular.

Critics have often pointed the quality of food and service as weak points in the chain’s business model – which may be one reason that recent developments indicate that Kofe Khaus is moving to a more quick-service brand rather than a dedicated café by the holding company. Overall, however, Kofe Khaus is a convenient place to get a drink and perhaps a quick meal. Its business is driven by the ubiquity of its well-known brand throughout Moscow and St. Petersburg.

 

An advertisement for Kofe Khaus.

About the author

Greg Tracey

Greg Tracey is a junior at the University of Nebraska – Lincoln. He is studying economics and international relations, as well as minoring in mathematics and Russian. As a Home and Abroad Scholar, he is focusing on business and economic issues in Russia and surrounding countries. The related scholarship will help fund his participation in SRAS's Russian as a Second Language program at St. Petersburg State University of Economics during the Spring 2019 Semester. In his free time, he enjoys reading and soccer.

Program attended: Home and Abroad Scholar

View all posts by: Greg Tracey