"ARIS"tokratic Bagels
This business story is about how three friends-engineers from Melitopol made the equipment for making corn sticks with their own hands and were among the first to start their production. And then, year after year, they built the ARIS enterprise, which is now in the top ten leaders in the production of bakery and confectionery products in Ukraine.
It all started with the fact that in 1998 one of the future partners got the idea to create a production of corn sticks. Friends drew attention to the shortage of this now ubiquitous product in Ukraine. As it turned out, it was imported already from the Rostov region of the Russian Federation. Having studied the market conditions, having conducted essentially a full-fledged marketing research (which did not happen often at that time), the partners came to the conclusion that the product would be liquid. We took the business seriously: we developed a business plan, went to Taganrog to an enterprise that manufactured such products, studied production technologies and sorted out the equipment, found guidelines for taste.
Entrepreneurs created the first production "workshop" in the rented premises of the former dining room, and not somewhere in the basement, as was often the case with many "startups" of the 90s. Work according to the rules (GOSTs, standards, sanitary and others) initially became the principle of the new company.
“We are engineers by training, we had no relation to the food industry, but we learned. They created all the necessary equipment from scratch, themselves. In three months, they developed and manufactured a stick extruder. Received the first products. But to produce it in bulk, this was not enough. Another three months were spent on manufacturing auxiliary equipment. Our business began with this, ”says Nikolai Chuprovsky, co-founder of the company.
Companions established sales on their own, as, incidentally, all other business processes. At the initial stages, they themselves performed most of the work, which is typical for many entrepreneurs. But it should be so, friends are convinced, analyzing the foundations of their success two decades later. Not a single hired employee will achieve such effectiveness in promoting his business as his owner. Three partners traveled to the district centers of Zaporizhzhya region, offering their goods to shops. The products for the region were new, and this added complexity. “Nobody wanted to buy money, they took it with a deferred payment or with payment after sale. We had one minibus, they drove on it, were our own drivers, movers, forwarders, sales representatives. The product began to be in demand, applications began to increase. We were able to hire employees, but worked as forwarders ourselves. Nobody is better to sell your product than yourself, ”recalls Nikolai Chuprovsky.
When the default occurred, the dollar jumped substantially. The main raw material of the enterprise - corn grits - was not produced in Ukraine then, accordingly, it increased proportionally in price. To save the business, friends had to look for new products. We studied the "neighboring" markets for products of related categories related to flour and flour products. Unsatisfied demand for pasta was discovered. With the money earned on sticks, they bought one pasta press. Then the second, third, fifth ... We reached good volumes.
“Over time, we closed this area, as the cost of electricity increased and production became unprofitable. Nevertheless, “on sticks and pasta” we earned money to buy our own production facilities and moved from the dining room. Already in the new workshops, they began production of lamb products, crackers, straws, ”the source said.
Now the enterprise “ARIS” is one of the significant players in the market of confectionery and bakery products of long-term storage, well-known not only in its native Melitopol, but also throughout the country. The main product categories are bagels, crackers, straws, gingerbread cookies, cookies. Each of them has a number of flavor variations or types. The total production volume is about 500 tons per month. “This set of products is justified by the fact that it is convenient to sell. We immediately offer the entire line of long-term storage products. It’s convenient for the client that you don’t need to buy goods from different suppliers, and all of them are obviously high-quality. And we are comfortable from a commercial point of view, as well as logistics, accounting, financial transactions. We are gradually expanding our assortment, but we do not go beyond the scope of our product range. Perishable products are a completely different business, ”says Vladimir Krivoy, Commercial Director and Partner.
Bagel bagels are classic products with an ancient history. They are well known to us from childhood, as well as to our parents and previous generations. What is curious: this product is practically not subject to recipe changes or innovations. “This is the mentality of our population,” says Nikolai Chuprovsky. - In the process, we experimented a lot. We tried to change the recipe, add various ingredients, make them salty ... As a result, we returned to the classic "Gost" recipe. Because the news "did not go." The only thing left in the assortment was drying with poppy seeds and “Baby” drying, simple and glazed. "Baby" was not previously dried, we were one of the first in Ukraine. "
The consumer is more loyal to experiments in non-traditional categories. For example, ARIS produces bread sticks in different versions. This is where the innovations turn out to be marketing successful. It is made both salty and sweet, with onions, garlic and various additives ... And the hryvnia consumer votes for innovations. “When developing a new product, we create focus groups of employees, and almost all personnel participate. We produce, for example, six types of products, conduct a “blind” tasting and select three types from the results of voting, which we put into production, ”says Vladimir Krivoy.
Financial partnership is an important aspect in the activities of any business. ARIS has been working with Raiffeisen Bank Aval for many years. The company uses current accounts, a salary project that has already become a traditional tool for most businesses - overdraft. Using banking products, the company solves operational problems.
Equipment is one of the key components to the success of any manufacturing business. At “ARIS” it is modern and high-quality. “We have allocated a lot of time and money to visit exhibitions of food products and equipment in Ukraine and abroad. Traveled to many countries, were in the USA and Japan, not to mention the traditional exhibitions in Germany, Italy, Belgium, Sweden. From there we bring new knowledge and ideas, find suppliers of equipment and carry out continuous modernization. Now we have only one relatively old unit left - this is a ram machine. They are produced only in Russia and Ukraine, there are no similar products to our world, they are purely regional. And since the technology has not changed, it simply does not make sense to upgrade, ”says Igor Murzak, technical director of the company and another partner.
Attention to new equipment is not in vain. It gives product quality, increases line productivity and the productivity of each employee. Today it is important, because the salaries of staff are growing. This means that the share of the wage fund and taxes on it occupies an increasing percentage in the expenditure side of the business. The founders are also attentive to the resource efficiency of the equipment. Energy and heat loss of units of past generations is a very significant consumption item, which is definitely worth optimizing. It definitely pays off. According to the interlocutors, in any business you need to constantly look at the components of the cost of production and reduce those that begin to grow, significantly affect the price. These costs must be corrected in ways that increase efficiency, but in no case reduce the quality of the product, level of service, or reliability of supply.
But the most important factor determining whether a new business expects growth or failure is still the market. It is highly competitive, with hundreds of bakeries, bakeries and pastry shops in the country. But in this case, several correct solutions worked, which the founders implemented at the start.
Firstly, the market research already mentioned at the beginning, the availability of demand and the targeted selection of the assortment. It was a plus that most of the products are well known and understandable to the consumer, they do not need to be promoted, the population should be accustomed to it. “We never used aggressive advertising, promotional campaigns. First of all, emphasis was placed on taste. The task was such that the buyer, once having acquired our products, returned for them again and again. This is the best advertisement. The second “seller" is recognizable armored packaging, as well as branding vehicles, ”the founder told about promotion methods. Now the company has a sales department, marketers.
Work with clients (and these are shops, supermarkets, wholesale buyers) is ongoing. There are dealers almost all over the country. The company delivers products with its machines. This is justified, despite large investments in transport, maintenance of the fleet and fuel and lubricants, the salaries of freight forwarders and drivers. The geography of deliveries is all of Ukraine. Zaporizhia, Sicheslav, Donetsk, Kharkov, Sumy, Kiev and Lviv regions are leaders in terms of consumption. Since 2014, the geography has "shrunk" - due to the annexation of Crimea and certain areas of the Donbass, the company lost this market. “It is important for us that every client receives our products on time. If we depend on transport companies, we will not be able to guarantee them the accuracy of deliveries and the safety of the goods. It is very important never to let your partners down. To prevent empty space on the shelf occupied by competitors' products. In addition, all cars are branded, they serve advertising purposes and increase our recognition throughout the country, ”explains Nikolai Chuprovsky.
The ARIS enterprise in Melitopol is a welcome place of work for specialists. Now about 250 people work here. There is practically no turnover due to the level of payment, working conditions, social benefits. The company has its own recreation center, where its employees recover in the summer. Everyone has the right to a week of rest - at the cost of utility bills, laundry, etc. There are prospects for internal growth and staff development: specialists are regularly sent to seminars and continuing education courses.
Social activities are also characteristic of the company - the company provides sponsorship in organizing city events. Contact Zaporizhzhya boarding schools - on the eve of the holidays and on other occasions. There is a Rehabilitation Center for Children with Disabilities in Melitopol, and ARIS took patronage to some extent, helps in solving various problems, and, of course, with products.
To tell about what became the key to the success of the company, we asked all interlocutors:
Nikolay Chuprovsky, co-founder of ARIS LLC
Twenty years ago, we set ourselves the goal of creating a powerful, large industrial enterprise. And we made every effort and means to achieve this. They invested all the profits into development, and only many years later they began to receive some money from him. When we first started our business for the production of corn sticks and pasta, we were skeptical, called "pasta." They did not believe that this could become a serious business. In my opinion, every business should be treated responsibly. Constantly thinking about it, about what can be improved, how to solve a particular problem, set yourself and realize goals - and success will come. And so it happened.
Vladimir Krivoy, Commercial Director
The most important thing is that the three of us organized the enterprise, the three of us went all this way. There were no conflicts, crushing, situations of "swan, cancer and pike." We worked and are working in synergy. Cohesion of like-minded people is one of the conditions under which a business can stay afloat. Well, and, as already mentioned, this is the concentration of each of us in the enterprise and on our own functions. When an entrepreneur leaves the business and hires an outside manager, in many cases there is a recession, or even collapse.
Igor Murzak, Technical Director
To a greater extent, our success was due to our cohesion. Well, of course, this is a careful selection of personnel, constant attention to technologies, their development and application in production. We have a principle: not a single kilogram of low-quality products should leave the territory of the enterprise. This is part of our reputation, the path to regular customers. Advice: the most important thing - do not expect momentary profits. They can appear, but just as quickly and disappear. Business is a long-term perspective. You need to set goals, objectives, go to them, constantly making “checks-in” along the way, checking the degree of achievement.
