Bistroff’s Sergei Vychodtzev says he is an adventurer at heart, doing business in places as far abroad as Africa. He spoke with The Leader about the ups and downs of business. C-Pro Group owns Bistroff, which produces instant porridges, corn flakes, Musli and other products.

You’re a successful Russian food producer. What made you believe that Russians now want to buy food produced locally but not imported?

Russia [now] is a very backward country. In the beginning of the ’80s, one-half of the world’s innovations belonged to [what is now the former] U.S.S.R. Now, it’s only 3-15 percent. I think it’s [even] 5-7 [percent]. This has its pros and cons.
In the food industry, we are very lucky to be so backward. As a consumer, I think that everything that is produced at our sub-par canned-food factories is significantly better in quality from the point of view of people’s bio-medical requirements. Western producers have recently realized that deep technological processing of food leads to losing valuable components, something to which, until recently, they never paid attention.
Besides, [we wanted] everything that distinguishes Russian producers — the least amount of preservatives, artificial flavoring and other synthetic food additives. We needed to revive this tradition, because the local food industry was destroyed during Perestroika. Besides, we discovered Russians’ tastes differ drastically from those of North Americans or Europeans. The essence of the Russian taste is shchi (sour cabbage soup) and kasha (porridge) — kasha in all its forms.

How did you realize that people want food produced under a Russian brand name?

You should have tried to sell Cheburashkas or Chippolinos [common brand names for soft drinks in the U.S.S.R. and also characters of famous children novels and cartoons — ed.] to people in the ’90s. It was unreal. If there was a sign in an unknown language, there was trust in it. It did not make sense to go against the stream. We used the Latin alphabet in our brand Invite [a popular cheap powder drink in the ’90s — ed.] and in other brands. Now, people are sick of Western products. They are interested in products produced in Russia and for Russians.

How did you come to where you are now? What was your first business?

There were lots of foreign students at the Mendeleyevsky Institute [now the Mendeleyevskaya Academy], which I attended. They used to bring clothes and computers from overseas and sell them to us. So, my first business was reselling clothes and office machinery to commission shops. But then, when I came back from the Army, the business faded away, and I needed to restore my positions on the market.

How did you do it?

The new product was military watches that cost $10 each [in the ’90s, they were in big demand among foreign tourists visiting Russia — ed.]. We traveled to the city where they were produced and, in one month, arranged an underground private factory [besides the existing state one]. In eight months, there were more watches in the market than they could sell. But, if the state watch worked for one to one-and-a-half months, our "shelf life” was one-and-a-half to two weeks. We had to sell them to foreigners within two weeks, and then they would leave the country. All the gears were defective.

Knowing that, why should Russian people trust your new products?

Demand determines supply. A Soviet watch is absurd. Foreig-ners who were buying that big metal thing weren’t buying it to check the time. There were buying it as souvenir for someone back home. So, they were mostly interested in the watch face and body. If somebody told me that, for a retail price of around $50, people expected a waterproof chrono-meter with all the components, for which they were supposed to pay more than a $1,000, that would be pretty strange.

You lived in Africa for five years. What made you go there?

I had problems [with the watch business]. I don’t like to discuss it. I left for Zimbabwe. I arrived there with a box of watches and a vacuum cleaner at the ready. None of the people I knew had ever been there. We decided that I would be able to sell household appliances there. That’s how I arrived to conquer the Dark Continent in the 1990s. It was horrible; I did not know a word in English. I made about $150 from everything I brought [to sell]; that was my starting capital.

What did you do there?

I worked on a movie. For the first six months, all I wanted was not to die from hunger. Then, all my friends started to come over on the Moscow-Harare flight.

How did you convince your friends to move?

You don’t need to convince anyone. I am an adventurer, in the good sense of the word. I keep in touch with like-minded people, who as a rule have nothing to lose. We are creators, and it makes no difference to us where we create. In the ’90s in Russia everybody was busy with destroying. People were busy taking and dividing things up. I am not interested in that.

What was your next business there?

There were a large number of backpackers in Africa. We started opening youth hostels at places where nobody had opened them before. These were places we fenced in and guarded and they had a shower, a toilet and place where they could put a tent and a link to electricity. Then, the wave of Slavic immigration shook all the local basis. In two years’ time, Slavic people became personae non grata in many countries.
Besides, a period of production had started. I got acquainted with a South African family that had a small factory that produced powdered drinks, among other things. The first drink we produced was Invite. All the Russian factories that produced bottled [soft] drinks like Cheburashka and Buratino were then out of work. Russia was drinking Coca-Cola and Fanta, which cost $1.5 a bottle then. That astonished me. That’s how I started to work with food products in Russia.

What happened to Invite? At some point it stopped dissolving in water and began leaving a sediment.

I turned into a venture capitalist.
Your next project was Bistroff?

It was the most complicated project I have ever done in my life. The C-Pro group, like most companies in Russia, lost a huge amount of money [during the financial crisis]. Every top manager in 1998 asked himself the same questions: “Should I leave my shareholders? Or should I bring everybody together in one room and say: ‘Everything is bad, but this is not the end of the world. In one-and-a-half or two years, we’ll get everything back with interest.”
It was very difficult for me [to restore the business]. I don’t believe those who say they foresaw the crisis. We were one of the businesses that lost everything during the crisis. But we didn’t fire anyone; we picked up top specialists who had been sacked by [business] monsters and found new investment funds.

Why are you working as an executive at a company you created yourself?

It happened by itself. Top management has a subsidiary responsibility. My share capital package was turned into income for my creditors [during the crisis].

How much did you lose?

Seven years of my life. In 1990, I started with $150. In 1999, I started with debts to banks and friends.

Will you stay with Bistroff forever? Will Bistroff itself stick around?

We plan to create 10 companies like Bistroff. We will leave Bistroff in 2005. I am a venture capitalist at heart. But Bistroff will not disappear anywhere, ever. What was the peak of your success and the biggest failure of your life?
The biggest failure was in ’98; I have not fallen lower in the last 10 years. My success still lies ahead.

What do you say to yourself when you fail?

The great Jewish King Solomon, who had a ring with an inscription that read "Everything passes,”once tore the ring off his finger and suddenly saw a sign inside the ring that read: "And this will go too.”After every sunset, there is a sunrise.