Issue 4, 2013. August-September



Vano Sturua, a founding partner of Villa Dzara Capital (VD Capital), manages eight restaurant brands in Georgia. He spoke with about VD Capital's secret for success and the importance of having well-trained staff.

Maia Edilashvili

Q: You started in the restaurant business in 1998, a time when Georgia was widely considered a failed state and few people dined out. Today you have expanded to eight brands, including Taghlaura, Machakhela, Samikitno, Texas Chicken, Jaffa Shawarma, Café de Paris, New York Burger and Pizzeria Fiorino. How quickly has the hospitality industry developed in Georgia over the past 13 years?

A: We started in 1998 with a small café with just five tables. The turnover was approximately 300 lari a day. We had five service employees at that time; today we have 800 people. The number of restaurants and our revenues have increased as well...

I think we made the right decision at the beginning to be very aggressive and [we] kept opening new restaurants, even though we did not have our own resources. We cooperated with banks . . . and succeeded in taking a good part [of the market]. We are not stopping: our brand Taglaura, for instance, is a large-scale restaurant chain with four restaurants. Since it would be costly to expand such a large brand, we decided to introduce a small brand as well . . . We called it Samikitno and merged it with another brand, Machakhela, which is a traditional Georgian pastry chain. The Machakhela brand started two years ago and it's pretty successful; we recently opened the eighth restaurant in the chain . . . By the end of the year we plan to open two more.

Q: All your brands are quite different in terms of cuisine and concept; what has been your strategy?

A: When we started working on the Taglaura concept, everyone warned us against creating spacious dining halls since Georgians prefer to sit down in small booths for more privacy. We took a risk and it has proved to be a success: over the years, the culture of dining out has changed. People are happily dining in a big hall now, instead of locking themselves up in small booths.

Concerning the demand, it's always higher for Georgian cuisine, although European and American [cuisine restaurants] are performing well, too . . . what played a key role in making our brands popular is just the quality of the service, the quality of meals: we have a monitoring system to constantly check cleanliness, food quality, the service level, every detail. Most important, as I mentioned already, has been our aggressive approach. Today taking the same market [share] would be much more difficult than it was when we started. Intuition and passion for work also help. I am myself a great cook and can prepare and assess any type of meal...

Q: Even though Georgians are known for their hospitality, the service quality at Georgia's restaurants, cafés and hotels is continually criticized - even by locals. Why?

A: The service quality is really a big problem, starting from restaurant staff to hotel personnel. The problem stems from our past — we are a post-Soviet country. It will require several generations to change to the mentality that being a waiter/waitress is a profession. In Western countries people are waiters for their whole lives. I think that people here need to have serious training and, over time, the perceptions will also change.

Q: How do you select your waiting staff?

A: People in this industry are . . . mostly changing from one restaurant to another. The majority of them have experience, but not a diploma. We plan to open a training center to increase their qualifications but it is not an easy task. At the same time, we are talking with several institutions about opening training centers . . . I think very soon the time will come when no waiter can get hired without a diploma.

Command of foreign languages is also a big problem. Almost no one speaks English among the waiting staff. I will tell you an interesting story: we have a plan to expand and open Georgian restaurants in European cities . . . So we needed a chef with a command of English as he/she would need to communicate with foreign staff there . . . we can't find one. This is an indication of how bad the situation in the whole country is, in this regard.

Next year we will move to a new office where we will have a training center. We may not be able to launch professional courses for waiters and chefs — that requires special infrastructure — but we will certainly offer English classes and send all our personnel there. Basic English language skills will be obligatory for everyone.

Q: You have mentioned that changing the mentality takes time. But what should restaurant/café owners do right now to create a pleasant, inviting atmosphere so customers return?

A: In the first place, the quality of meals and service play a role. However, something which is even more important in Georgia is the price. Georgia is a low-income country and price is the most important factor . . . For instance, recently we opened a Ukrainian restaurant, Kobzar, near the Dry Bridge (Mshrali Khidi), which offers high quality both in terms of interior design and service, and we brought a very high-class chef from Ukraine. Despite all this, we set moderate prices. Otherwise it would not work.

I myself travel a lot, spending half of my time abroad . . . Our country's big problem is the lack of qualified service staff and due to this tourists suffer a lot . . . Renting a car and getting around the city is not even a matter to discuss, it's so complicated. So, the lack of qualified service personnel on the market is a problem throughout Georgia, not just for our chains.

The number of tourists is increasing in Georgia and the service quality should follow suit. If the service level can't catch up with the pace of visitor inflow, interest may die down.