Sauerkraut from Russia has taken root in Australia thanks to a massive passion for a healthy lifestyle
(Photo by Sebastian Gollnow / Dpa / TASS)
Galina Sidarok came up with the business of pickling and pickling vegetables 15 years ago when she worked as a saleswoman at the market. Her company has grown into a business with revenue of 1.5 billion rubles a year and attracted large retail chains not only in Russia, but also in Australia
At the end of August 2016, a phone call from Australia rang in the office of the Nizhny Novgorod pickle manufacturer Echo. Entrepreneur Nikolay Dyshlyuk, who left Russia seven years ago, was looking for a supplier of natural unpasteurized sauerkraut for Australian retail chains. A search engine query led him to the Echo website, which, unlike its competitors, had an English-language version. "I called the sales department, but the employees thought it was a joke, that I was seriously ready to take their vegetables to another continent," Dyshlyuk smiles. Nine months later, the first batch of sauerkraut from Nizhny Novgorod went to Australia. Today, two 40-foot containers — about 26 tons of cargo each - go there by sea every month.
The idea to create a business for cleaning and harvesting vegetables came to the co-founder of "Echo" Galina Sidarok 15 years ago. Now her company produces vacuumed peeled vegetables, pickles and pickles, Korean salads and healthy food products under the brand "Beloruchka" and supplies them to large retail chains throughout Russia. In 2019, the revenue of "Echo", according to Sidarok, reached 1.5 billion rubles.
In 2003, 40-year-old Galina Sidarok, the future co-founder and director of Echo, was selling vegetables at the Nizhny Novgorod market. After graduating from the institute with a degree in "economics of trade", she worked for 15 years in the "Jewelry Trade" as the head of the section. "When the company was transferred to private hands, many employees dispersed, and I, too, was left without a job and with three children. It was necessary to do something," the entrepreneur recalls. As a result, she offered to sell peeled onions to her future business partner Shavkat Sayfutdinov (Sayfutdinov owns the Echo legal entity on a parity basis with Lyudmila Alexandrova, the daughter of Galina Sidarok. — Forbes Woman). He was engaged in the import of vegetables and supplied them, including for the Sidarok tent. The partners went to the producers of frozen dumplings to study the demand, and made sure that the business idea was working - the dumpling shops immediately became interested in the product. "While we were washing and peeling onions for dumplings together with our children, we were looking for ways to develop a business," says Sidarok.
By the beginning of 2005, the revenue of Sidarok and Sayfutdinov's company was 4.5 million rubles per month. In search of new customers, they agreed to meet with representatives of the Spar supermarket chain in Nizhny Novgorod. The entrepreneurs offered peeled onions to the employees responsible for working with suppliers, but they were interested in a wider assortment. They were ready to conclude an exclusive contract with Sidarok and Sayfutdinov if they could supply them not only onions, but also other peeled vegetables in a vacuum. "There hasn't been such a product on supermarket shelves yet," Sidarok explains the retail chain's interest.
For the development of technology for vacuuming vegetables and technical documentation, entrepreneurs went to the Prominent Moscow region — to the All-Russian Research Institute of Canning Technology. The production was organized in Nizhny Novgorod in a rented room with an area of 250 sq. m. A technologist, a sales representative, a foreman and shop staff were hired — a total of 18 people, equipment was purchased — five Russian vegetable peeling machines with a production of 50-60 kg per hour and Italian vegetable cutters. The partners invested 350,000 rubles each in launching the business. It took six months to collect all the documents and bring a new product to the market, Sidarok recalls.
Deliveries to chain stores began with onions, carrots, potatoes and beets. At that time, the founders of Echo did not fully understand themselves whether their product had great prospects. When Perekrestok ordered radish to the producers, they were perplexed: "Well, who will eat Uzbek radish grated, sealed in a package?" But radish lovers were found among the buyers of the network, which is part of the X5 Retail Group holding, — the repeated order for the product was nine times more than the first one. Within six months, the vacuumed vegetables of "Echo" appeared in "Auchan", "Metro", "Lenta" and "Okey" in all regions of the presence of these retailers. There was no need to persuade them to take the goods — representatives of the networks noticed it on the shelves of competitors and came to Echo themselves, Sidarok assures. The manufacturer's revenue reached 6 million rubles per month.
Galina Sidarok, co-founder of Echo
In the fall of 2005, the markets of Nizhny Novgorod were closed for quarantine. "Back then, the markets were the only place where you could buy sauerkraut, it was sold by weight — laid out in plastic bags. Markets do not work — consumers are left without pickles and pickles," explains Sidarok. She went to the Perekrestok chain with a new business idea - to sell unpasteurized sauerkraut packed in small plastic buckets. The retailer became interested again.
In search of the recipe, Sidarok and Sayfutdinov drove through the villages of Nizhny Novgorod and neighboring regions. Housewives with the most delicious cabbage were invited to their production — for a reward: someone was paid, someone was rendered a service. "One woman was helped to get a rare medicine, another was rented an apartment for her student son - they also looked after him during his studies while his mother was away," Sidarok says. During the time that the village hostess worked in production, the team had to learn her art and adapt the recipe to large volumes.
In a few years, the novelty has turned into the flagship product of the company. According to the press service of X5 Retail Group (unites the networks "Perekrestok", "Pyaterochka" and "Carousel"), it is sauerkraut in the range of "Echo" that is most popular. Today, according to Sidarok, pickling and pickling account for about 60% of revenue. In addition to the usual sauerkraut, kimchi, Korean carrots, Georgian cabbage are produced - all based on traditional recipes of Koreans and Georgians (who came to the production of "Echo" to train employees in their craft), as well as pickled tomatoes, salted herbs, wild cherry, garlic, mushrooms and ginger.
As the product range expanded, the need for new production facilities grew. In March 2006, Sidarok and Sayfutdinov decided to buy an unfinished building with an area of 17,000 square meters, repaired it, equipped workshops and hired additional staff — the number of employees has grown from 18 at the start of the business to 400 today. Production volumes at the new location also began to grow rapidly: if in 2005 they amounted to 500-700 kg per day, today they are more than 70 tons.
Sidarok finds it difficult to name the total number of suppliers of vegetables for their production. "We have more than 100 of them for potatoes alone, but they are all variable," she explains. — Every farmer has unsuccessful batches, and if something is wrong, then we deploy it and buy it from another. Next time it may be the other way around." The geography of supplies is wide — from Belarus to the Volga region, and before the introduction of food sanctions, Dutch vegetables were also used. The technologists of the production of "Echo" constantly have to adapt to the changing characteristics of varieties of vegetables and other products. "The cabbage is not juicy, the yeast does not "eat" sugar. We hand over samples to the laboratory so that the researchers explain exactly what has changed in the composition, and then we change the requirements for suppliers, adjust the recipe," complains Sidarok.
Echo's largest competitor, Ferelgam, a producer of pickles and pickles, independently grows vegetables on plantations in the Ryazan region and Dagestan. "At the start of work, we also studied this option, but realized that this is a completely different business and we are not ready for it," says Sidarok.
The owners of Echo also rejected the idea of supplying their products to restaurants, although there was a chance to become a supplier of McDonald's. In 2010, when there were no fresh peeled vegetables on the menu of the chain, Sidarok arranged a meeting with its representatives in an office in the center of Moscow. "I suggested that they introduce carrot balls into the menu. But when they announced the volumes that we should provide, I refused. We didn't have such capacities," the entrepreneur recalls. Soon similar vegetable snacks appeared in McDonald's restaurants — carrot sticks. A representative of the network at the time of publication of the material did not respond to a request from Forbes.
In October 2019, at a meeting with the Minister of Agriculture Dmitry Patrushev, the Governor of the Nizhny Novgorod region, Gleb Nikitin, said that by 2024 the region would double the export of agricultural products. "For example, Nizhny Novgorod agricultural enterprises for the first time began exporting Russian pickles — sauerkraut. Our traditional delicacy has already been appreciated in Australia," the head of the region told about the Echo experience.
Wholesale deliveries of "ethnic" products from Europe and the CIS to Australia occupy an important place in the activities of World Wide Exporters Nikolay Dyshlyuk, who organized the delivery of Nizhny Novgorod cabbage to Australian supermarkets. "There is a strong trend in the world for a healthy lifestyle and healthy nutrition in particular. Sauerkraut belongs to the group of fermented products, its beneficial properties have long been known," the entrepreneur explains his interest in Echo products. He puts sauerkraut on a par with Korean kimchi and Chinese kombucha.
When Dyshlyuk came out to the owners of Echo with a proposal to arrange supplies overseas, Sidarok treated his idea with irony: "Today you will hear anything, but how serious is it? I said, "Well, if you want, come." And they just came." Negotiations, discussions of product samples and other details lasted for nine months — the price, quality and packaging of the product were important for the importer, which had changed radically by the beginning of deliveries. "Hardly, looking at the jar, you will guess that the product is Made in Russia," Dyshlyuk smiles. Labels for the Australian version of Echo products are printed in Europe, then sent to the manufacturer's factory of plastic containers and soldered into cans during the casting process.
Sauerkraut for Australia
Echo presented about ten samples of cabbage with different seasonings, berries and other additives, Dyshlyuk's team selected 3-4 and sent them to Australia for tasting. But the partners from the Australian Woolworth chain were not satisfied with the product at first. "We were amazed at how much Russian preferences differ. Apparently, my taste, even after many years of living in Australia, remains Russian," says Dyshlyuk.
The recipe began to be finalized, after each change, samples were sent to Australia by courier service, overseas colleagues tried and again asked to make changes: reduce the amount of sugar, salt, garlic, increase the amount of pepper, add turmeric popular with Australians — and so on until they got what they wanted. Cabbage of three types — spicy, with horseradish and carrots and turmeric — began to be delivered to Woolworth, the largest chain in Australia with more than 900 stores, as well as 1,500 independent stores and cafes. Soon it was possible to establish supplies to New Zealand. According to Sidarok, 5-6% of the products produced by Echo account for exports to these countries.
Cabbage is delivered by sea, the whole journey takes 8-9 weeks, another week is spent on shipment. The main difficulty for the importer is that the product is sensitive to temperature changes, so the temperature regime must be strictly observed throughout the journey, explains Dyshlyuk.
In foreign supermarkets, sauerkraut is located in the vegetarian section and belongs to the category of healthy food. "Previously, Australians didn't know much about this product and certainly didn't know that it could be consumed as a snack for strong drinks. They eat it as an independent dish or add it to burgers," says Dyshlyuk. Sidarok sees nothing surprising in the fact that her product is in demand on another continent: "After all, we do not limit our diet to potatoes and carrots, but we eat everything we are lucky: bananas, papaya, and avocado."
