From early in his “happy Soviet childhood,” Andrei Korkunov, 39, dreamed of becoming a factory director. That dream has come true in ways a young Soviet could not have imagined. Today, Korkunov is the head of a chocolate factory he himself built in the town of Odintsovo, Moscow region. Production began September 26, 1999, and today, less than three years later, Korkunov’s factory employs 420 people and boasts annual sales of $23 million.
Born in the provincial town of Alexin (Tula region), Korkunov watched his father progress through various managerial positions at different production plants. He longed to follow in his father’s footsteps and enrolled in the Moscow Energy Institute, where he was trained as a hydraulic engineer and learned machinery and equipment from the inside out. Upon graduation in 1985, Korkunov worked at the Podolsk Electromechanical Plant and later in a military design bureau in Kolomna. His knowledge of things technical would later help him buy the best chocolate-making equipment, in Italy.
The jump from technician/engineer to chocolatier came during his severe schooling in Russia’s nascent market economy. In 1991, Korkunov retired from the army and set up a jeans-sewing cooperative. Yet, this business did not go too well, so he joined with a friend who imported clothing, computers, office equipment and food products. When their Czech partners sent them a load of chocolate, Korkunov was surprised to watch it sell much better than office equipment. In 1997, he began building his factory in an empty field in Odintsovo with capital accumulated from previous business activities, plus a loan to buy chocolate equipment in Italy.
Korkunov decided to tie the chocolate brand to his own name, a pre-Revolutionary tradition. “I thus showed I am personally responsible for quality and that we are reviving Russian traditions,” Korkunov said. “In the eyes of the customer, Korkunov looked like some kind of ancient brand, but in fact it was a young one.”
The company’s first chocolate (still Korkunov’s personal favorite) was Arriero, the recipe for which was “born during three midnight hours when we were sitting with our technologist Mario, mixing up ingredients in a plastic glass. It contains ground nuts, a dark filling and bitter chocolate.”
Today, Korkunov produces 12 brands of chocolates, his latest—Line Rosa—launched last October. Demand is strong and production is expected to increase by 25% in the coming year and could make Korkunov the leader in the domestic premium chocolate market. As the authoritative magazine Expert wrote, “with the growing demand in the premium segment, and a minimum of competitors, Korkunov enjoys all the advantages which are due to first-comers.”
Korkunov’s first forays into exporting led him to work with a Canadian firm that undervalued his brand, Korkunov said, arguing that “‘OK, it is a Russian product, we will just take over our niche with a cheaper price.’ I said that there is no way you can sell a quality product for a cheap price. This is not right. You will never make money.” So he found new North American distributors who will sell Korkunov’s chocolates in small chocolate boutiques under the Korkunov name.
“The Canadians tried to convince me that “Korkunov” does not read well in the US market,” Korkunov said. “Now I realize that is all wrong. It reads perfectly well in English. The Japanese read it fine too ...”
In Russia, the Korkunov name has acquired a sterling reputation—it has become mauvais ton to present official bodies in Russia with “PR gifts” other than Korkunov’s chocolates. “I meet people, including employees of the tax police, tax inspectorates, Interior Ministry, etc.,” Korkunov said, “and their functionaries confess, ‘Look, we have your chocolate all over the place at our work.’ So the main thing we have achieved is that now it is de rigueur to present someone with a box of Korkunov chocolate to show good taste.” British Airways, Lufthansa, Hilton and Marriott all seem to feel the same way, and treat their clients to Korkunov chocolates—“It is in fact an advertising budget they finance, not me!” Korkunov proclaims.
“What makes me different from someone who has just bought a factory?” Korkunov asks rhetorically. “I myself built the factory walls. And, besides the banal merit of creating jobs, I have created an example for our young people that today, when property has all been divided up, one can still achieve a certain success in life. But, most importantly, we instilled new hope in our people. I am now getting a lot of letters from people who thank me, and not only because of my brand. Most importantly, for them I am a role model, proving that a Russian can build something on an empty lot and break through ... without the big advertising budgets of Nestle, Mars or Cadbury & Co.”
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