Cheesemaker Alexander Vorontsov: ‘The first quarter of the year was difficult’

“The biggest impact was the sharp rise in milk prices”

Alexander, business is going through difficult times today, some are complaining about the inaccessibility of loans due to the high key rate. How has this affected your business?

If production is not developing at the expense of borrowed money, such an enterprise probably does not care what the current key rate of the Central Bank is. It is clear that the rates have increased for the loans we took, and we spend more money every month than we planned. But loans make up a reasonable part of our balance sheet, so we can survive this. We are looking forward to when the rates will go down, and we will be a little richer again, so that we can spend less money on servicing loans and more on developing the business.

The biggest impact on the situation in the cheese-making industry was the sharp rise in milk prices. In the second half of 2024, its price increased by 30-40%, and we cannot raise prices for our products that much.

This was the biggest challenge: purchase prices increased by 30%, and we can raise the cost of cheeses by a maximum of 10%.

If we also raise them by 30%, and our cheeses are already an expensive product, we may lose some customers. Therefore, we raised prices very gradually: last year — by 5% and at the beginning of this year — by the same amount. As a result, people gradually got used to the new prices. We plan to hold out as long as possible until the next increase, optimizing our own costs.

“The first year when growth stopped”

What other challenges did 2024 bring and how was the beginning of the current year?

Last year was generally difficult, many projects closed. We were intensively looking for new customers. We mainly work with wholesale, but some stores ceased to exist, could not withstand the competition. Usually, we grew year on year, but not in 2024. This was the first year when our results were the same, that is, growth stopped.

The first quarter of this year was also difficult. Maybe people put all their money in deposits — I don't know where they did it.

In addition, we sell cheese, and after the New Year holidays there is always a noticeable decline, then there were religious holidays: both Muslim and Christian, during this period people buy less cheese.

From around 15 to 20 April, probably, good times seemed to return, that is, a revival began. April was very good, and May is going well now. We can produce much more cheese than we currently do. We are ready for growth, new volumes...

Working with retail chains is not easy

By the way, how is the work with large retail going, is it difficult to get on the supermarket shelf?

It is a very difficult process to start working with retail chains, everything is very long and difficult to resolve there. About a year has probably passed since our first meeting with a large chain here in Kazan, and now after so much time, deliveries have finally begun. In May, deliveries to the distribution centres of this chain began. This is a good addition to our sales.

Plus, the updated Moscow Market has opened in Kazan, and we are there too. We have a second, one might say, flagship store in a good and beautiful place. So, since April, as I already said, we have felt the market revival, there are more customers and now, in principle, everything is going well.

It turns out that you are currently represented only in federal retail chains, and when will you be in Kazan?

In Kazan, we are in one of Magnit stores. The local Perekryostok will probably also take our cheeses, we are still negotiating. We have an agreement with Bakhetle, there was a pause, but in May, a new order also arrived.

Basically, our products are presented in cheese shops that are designed for tourists, for example, in Tatproduct chain of stores on Bauman. We advertise cheeses on social networks, and if people in other cities have tried our products, when they come to Kazan, they buy them here. Plus, we have another store in the Central Market.

“I expect a 20% increase compared to last year”

How much cheese do you currently produce and how ready are you to increase production volumes?

We produce about four tonnes of cheese per month, but we could also produce 8-10 tons. Moreover, we can do this using our existing capacities, that is, we do not need to look for money for additional equipment — we have everything.

But we will only double in size in a few years, at least two or three years must pass for such growth to occur. Technically, we are ready for this, but we will grow as applications come in. This year, I cautiously expect growth compared to last year by about 20%.

But there was no growth in the first quarter of the year, probably for us — this is a decline, we are used to growing.

We optimized our internal expenses: reduced warehouses, cut something somewhere.

How accessible are government support measures?

If you are investing and really want to build a new workshop, you can go through the SME support line. They will give you a loan not at a wild rate, but at a reasonable one. There are leasing and other instruments.

But if you take out a loan, there is a problem — you need to put something up as collateral, for example, an apartment. Just without collateral, you can get, in my opinion, up to 1 million rubles, something like that. But now even this has become difficult, interest rates have increased, the state cannot endlessly subsidize a wild rate.

“The hardest business is raising animals”

What is the current situation with milk purchase prices?

They have increased and are unlikely to fall. People who keep cows have also seen their expenses go up. Not raising purchase prices means simply killing all the cows and stopping producing milk. Farmers can also be understood, they are absolutely right.

This is the hardest business — raising animals, you can't abandon them, you can't take a day off, you have to milk them every day.

Cheese makers buy directly from producers — not from milk collectors, because this does not guarantee its stability, the cheese will be different or not work at all. We always buy only from two or three trusted farms. It is necessary to go and see that everything is clean and beautiful on the farm, that the hygiene of the animals is at the highest level, and then monitor that the indicators are stable all the time. But now a good milk producer knows how to monitor protein and fat content indicators, monitors animal feed.

A lot of milk is produced in Tatarstan, we are first in Russia in terms of its volumes. All this milk is distributed among various processing plants, it is completely wasted, so it still needs to be found, and this allows us to raise prices, since there is somewhere to put it.

“We haven't been able to find an employee for several weeks”

How are things with personnel at your production facility?

If we wanted to increase production volumes, I would know where to get new employees — among relatives or friends. But if you look on the labour market — it's not easy. We have just opened a point at the Moscow market, and, oddly enough, for several weeks we have not been able to find an employee there just to sell. The employees of another store had to split their shifts in half: one works there, the other here.

So there are certain difficulties with personnel, but this is a solvable issue. In the end, salaries can be regulated, if you announce an amount above the market, they will come to you right away.

There are enough workers in production, we index wages regularly, people seem to be happy. If we need to find more, we will. We have two production sites: one in Kazan, the other in Vysokaya Gora District. Since we produce, one might say, an elite, expensive product, of course, we are not talking about hundreds of tons. And the cheese we make matures for six months to a year, we need to monitor it.

Each city has its own culture of cheese consumption

Judging by the advertising, it seems that there are many cheese dairies in Kazan now. How high is the competition?

I would not say that there are many cheese makers. If you try to find craft cheese makers, there will be two or three.

As soon as we opened, we felt comfortable from the very beginning, we just immediately chose this niche of unusual cheeses: aged, steep. We have 60 items in our assortment. If you look at other cheese dairies in the country, there probably isn’t one like that. They can make 15-20 types of cheese. We make everything in a row, we cover all the niches. Even in our own store, all our products don’t fit. It seems to me that in our segment we are one of the leaders, but not in terms of turnover, I mean, but in terms of types of cheese.

Has the Russians' cheese consumption culture changed?

A difficult question, each city has its own. Our sales are going very well in Moscow, Saint Petersburg, and in our native Kazan we probably have about 15% of sales. Perhaps for Kazan residents our cheese is expensive, but if we bring it to Krasnoyarsk or Novosibirsk, it is cheap there.

There are many types of cheese, and the main way to convey information about a product to people is to let them try it. I was just standing at the Moscow market and realized: no matter how many years you work, there will always be people who will learn about us for the first time. It turns out that you need to work for many, many years and let everyone try the cheese so that people recognize it. I see this because I myself let people try the product at tastings.