Logistic partner of McDonald's will leave Russia

After the closure of McDonald's in RUSSIA, its main logistics partner, the American company Havi, which supplied food to restaurants, also thought about reorganizing the business.One of the scenarios is the transfer to management

Havi Logistics, a food logistics company, is looking for someone to transfer its business in Russia to, a source familiar with the negotiations told RBC. The company is working on localization options, one of which is the transfer of assets to Russian management, says another interlocutor of RBC among food suppliers.

Havi Logistics is known primarily as a logistics partner for the McDonald's fast food restaurant chain. The company's business is more than just catering to the popular fast food chain: it provides a full range of supply chain integration services, including supply and demand planning, marketing and business intelligence services, and packaging services.

RBC sent a request to the Havi global office.

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What is a McDonald's partner responsible for?

The history of the Havi business began in 1974, when Ted Perlman and Bob Rock agreed to organize food supplies for the restaurants of the American corporation McDonald's in Chicago. In 1976, the partners founded the Havi Corporation (the name comes from the names of the founders' wives, Harriett and Vivian). In 1986, Perlman and Rock sold Havi to Staley-Continental, and Pearlman bought it back two years later.

Over time, Havi's business has become international, reaching countries in North America, Asia, Europe and Latin America. In 2002, Havi acquired the European logistics operator Alpha Management, which included WLS, the exclusive supplier of McDonald's restaurants in Germany since 1981, as well as its subsidiaries in other European countries. WLS delivered products to distribution centers in Germany, and in 1988 an industrial-sized bakery and MEAT processing plant appeared next to one of the centers - this helped to optimize logistics, reduce transport costs and environmental impact.

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Today Havi Logistics operates in more than 45 countries. The group also includes a packaging division based on Perseco, which has been supplying McDonald's restaurants in the United States since 1975 . In order to reduce its sustainable environmental footprint and reach zero emissions by 2050, Havi, in particular, provides McDonald's restaurants with operations "from the collection of used cooking oil and cardboard to the production of biodiesel from waste in Europe."

Another area in which Havi cooperates with McDonald's is marketing services. In 1990, Havi bought MB Sales, which designed and supplied toys for children's Happy Meals, after which the group began to manage promotions and promotions in the United States related to Happy Meals.

Why did McDonald's introduce Happy Meal to the menu?

In the late 1970s, the McDonald's Corporation noticed that it was inferior in popularity among children to the Burger Chef chain, which attracted young visitors with gifts. McDonald's commissioned advertising DIRECTOR Bob Bernstein to fix this. Then Bernstein and his team came up with a box for children's lunches with handles in the form of signature golden arches, which contained puzzles, riddles, games and comics to keep children occupied during meals. Inside the box were a hamburger, fries, a pack of cookies, and a surprise gift that became the main feature of Happy Meal.

The Happy Meal was first sold at some McDonald's franchised restaurants in the United States as a promotional item. In the 1980s, the Happy Meal went from being a promotional item to a regular item on the menu. To develop toys, McDonald's partnered with Hollywood studios and major toy manufacturers such as Mattel (MAT), Muppet Babies, and Hot Wheels. In the 1990s, Beanie Babies, Transformers, and Power Rangers Happy Meal toys became massive hits in the Happy Mile. And in 1996, McDonald's entered into a ten-year contract with Disney to create toys based on their cartoons and became one of the largest distributors of toys in the country.

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What will happen to Havi business in Russia

In Russia, Havi was represented by Rulog LLC, founded in 2003 (its founder, according to the Unified State Register of Legal Entities, is Havi Global Logistics GmbH registered in Germany). The general director of the Russian legal entity of the company is a Russian citizen Christian Novak.

Havi Logistics provided services to international brands, including not only McDonald's, but also IKEA and companies in the energy and oil and gas sector - British Petroleum (BP), Equinor (formerly Statoil), OMV. As of 2015 (latest available data), the company had more than ten distribution centers in Russia, including in Moscow, St. Petersburg, Kazan, Kaliningrad, Novosibirsk region. They ensured the purchase, storage, processing and delivery of products to 518 McDonald's restaurants in more than 50 Russian cities (we are talking about all the American chain restaurants open at that time in Russia). According to SPARK, Rulog's revenue in 2021 amounted to 70 billion rubles, net profit - 13 million rubles.

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In March 2022, following the start of a special military operation in Ukraine, McDonald's announced a temporary suspension of its 850 restaurants in Russia. On May 16, the company announced its withdrawal and sale of its business in Russia. The owner of the business was Alexander Govor, who previously ran 25 McDonald's restaurants in Siberia under a franchise. On June 12, the former McDonald's chain of restaurants opened in Moscow under the new name Vkusno - and that's it. As of the end of September 2022, more than 800 former McDonald's restaurants have opened under the Vkusno - i dot brand. It was reported that "Vkusno - i dot" plans to open all 850 chain restaurants in Russia before the end of the year.

The Swedish IKEA also suspended the work of its stores in Russia in March amid a special operation in Ukraine. At the end of February, the British oil and gas company British Petroleum announced the sale of its stake in Rosneft, and the Norwegian oil and gas company Equinor announced its withdrawal from Russian projects, including a partnership with Rosneft.

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In the Russian logistics market, Rulog is a small company, but it was an important partner for McDonald's in Russia, as it was deeply integrated into the company's business processes, says Dmitry Vostrikov, executive director of Rusprodsoyuz. “They are interconnected logistically, they have a developed plan and schedule for deliveries with the necessary volumes and temperature conditions, this is a whole living organism,” explains Vostrikov. In addition to logistics, the company was engaged in the production of cups and the supply of disposable tableware for McDonald's. In addition to McDonald's, Rulog had a contract for the transportation of ready-made food with Auchan and several clients in the HoReCa segment, RBC's interlocutor adds. According to him, this business should be most interested in "Tasty - and that's it" as a support structure.

The press service of "Vkusno - and that's it", in turn, replied that they continue to work with the Rulog company as the assignees of McDonald's. RBC sent a request to Auchan.