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Mikhail Zelman is certainly one of the most successful restaurateurs in London. His company Global Craftsman Group (GCG) includes 13 Burger&Lobster chains, 3 Goodman steakhouses, Smack Lobster Roll, Rex & Mariano, and Beast, which only serves Canadian crab and Nebraska-fed beef.
Zelman’s business started in London, but now seven more restaurants will open, one in Qatar, Kuwait, and the UAE. Mikhail invited Gyuzel Gubeydullina to interview him at his Mikhail Zelman School of Success office. Here, aspiring restauranteurs are taught how to welcome guests, choose meat, and cook the world’s best burgers and lobster.
In fact, there is no menu, just two options: a burger or lobster.
In London, it is expected to have to wait for a table, but it is rare to see a queue of people lined on the streets in the rain for a lunch. This is what I saw at the Burger&Lobster in City, near the Royal Exchange. Right now it is my favorite restaurant, but there is one but – you even need to book a table for lunch. But who knows the price/quality balance better than investment bankers, working here in City?
Soon the empire is set to expand. London’s chattering classes are talking about the (so far unconfirmed) news that the Qatar Investment Authority (QIA), a sovereign wealth fund, has invested 30 mln pounds in Zelman’s business. If the rumours are true, they are understandable for them to be impressed by the fact that the total monthly revenues of his restaurants are between £50,000-140,000. In an attempt to understand the phenomenon of Mikhail Zelman, who before was a stockbroker in Russia, we went for an interview.
BEING A RESTAURANTER IN RUSSIA IN THE 1990s
Mikhail, tell us how it all began?
I finished school at age 14 in 1991 because I wanted to start working. In the 1990s, there were stores in Russia that were selling foreign stuff and everyone wanted to buy these things. I needed money to take girls out on dates, so I finished school as soon I could and went to work for my father — as a fitter-adjuster in the tool shop, where I stamped lids for the canning. I lasted only seven days. But I still remember my mentor Zura Mikhailovich.
What a great career! How did you get interested in restaurants?
I quickly understood that I had a unique opportunity to build my own business, do things that my father would have shot dead for. So I had this desire to make money and went to work for the Commodity Exchange, I was the youngest broker! I was trading vouchers for former Soviet factories that still produced and sold stuff like canned meat, machinery. Because of the weak economy, everything was sold on a barter basis. That year I bought myself my first car. Then I went deeper into business and started to organise logistics for the factories that were selling abroad. My older brother was already living in Israel. I visited him and was struck by when we ate at a Mongolian bar and grill After coming back to Moscow I persuaded a friend to open the same restaurant in Moscow. We called it Tamerlan. Working there I first realized that I had to be a restaurateur and that meat is my passion.
It all comes from the childhood. My dad — a very welcoming character. We always had guests at home, laughing and enjoying homemade barbecue from a hand selected meats. At the same time, I grew up in the Soviet Union, where everyone had this thought in the back of their heads: How to feed the family? And here I am — a cook, a restauranteur! Perfect!
I left and opened my own restaurant “San Michel” on Moscow’s most posh street. At some point I realized that I had an ambition to open more than one restaurant! I started trying to develop my meat preparation skills, and I found some people who had a similar mindset, and after a few experiments that failed, we opened Goodman Steakhouse in Moscow, which was very successful. Slowly my mono-product manifesto was starting to take shape.
THE MONOPRODUCT MANIFESTO AND RELOCATION
What is a mono-product manifesto?
I gradually began to approach the idea that you can open a successful restaurant that only serves one dish! But not just any dish! The point is — due to specialization in the preparation of this dish, you can achieve perfection! I wrote a mono-product manifesto and in 2011 I sold a $ 200 million company with 10-12% profitability for buyer Iskander Makhmudov and his partners. And then I moved to UK.
I had Burger&Lobster on my mind.
How is the manifesto linked with the move?
The mono-product manifesto — is not only about restaurants, it’s about values. Specialisation, perfection, saving resources, effectiveness. My personal values are tolerance, cosmopolitanism, globalisation. In Russia, it would have been difficult to develop a company with such a concept.
BURGER & LOBSTER REVEALED
All right, we get your love for burgers, but why lobster?
Yes, I have always loved burgers. In the 90’s Russia, I was queuing outside McDonald’s to get one! Over time I realized that you can make burgers that taste better than grandma’s meatballs. I wrote my manifesto thinking about the perfect burger place. But lobster intervened at some point under the influence of my manager David Strauss and chef John Kadyu, who is Canadian and lobster — is just a part of his culture. The result we created was not a pure single-product restaurant, but a good compromise between a large menu and one dish. The first Burger&Lobster was at Claridge’s Street. It is now part of the umbrella company Global Craftsman Group, that we established with our partners: Gosha-Bukhov Vayenshteyn, Ilya Demichev, my older brother Roman Zelman and Vladimir Borodin. But I hold the controlling interest.
How do you make decisions?
Each of us has a veto. Until we come to a common decision, we do not decide anything. We’ve been friends since childhood, so in the business we complement each other, we are able to find a common language and listen to each other’s arguments. We had times when our emotional backgrounds and personal ambitions did not click, but we worked it out, so now are reaping the benefits from this difficult time. Ghosha is responsible for operations in England, Vladimir — for development in the United States, Ilya is responsible for the trends, and I run the “Mikhail Zelman School of Success”.
I know your meat comes from Australia, but where do you get lobsters?
We’ve created a joint venture with Canadian fishing company. They have no assets in the GCG, but they are part of our philosophy: we brought the opportunity for fishermen to trade with us directly, without intermediaries. Lobsters do not breed in captivity, so we catch them and transport them by aircraft. We have a terminal at Heathrow for 35,000 kilograms of lobster. In the low season, they just stay in the terminal, but when it’s busy we bring them from Canada to a plate in 24 hours. We sell about 5,000 lobsters a day and are the largest exporter in Canada. But we have very high food cost of about 50%.
How to quickly do you bring orders to the table?
We try to serve in seven minutes after the order.
Who is your ideal customer?
Burger&Lobster has no menu, no choice, so there is no stress. The quality of the burger and lobster we serve has been developed to perfect! You get it for just £20. In many Western cultures, a prime burger is priceless. We also have many Chinese tourists and Arabs.
By the way, are you soon opening in Kuwait?
A franchise. The prices of the franchises depend on the region and the number of restaurants. We use Australian meat, we found a halal meat supplier.
There are rumors that the Qatari sovereign fund QIA has invested in your company?
Haw many restaurants will you have by the end of the year?
We open seven more in Qatar, Kuwait, UAE and London. It will be 22.
What’s the turnover and profitability?
£50-60 million. But it grows 30% YOY (year over year). We are heavily investing in development, so profitability varies, some years we don’t have any profit at all.
Which is the most successful Burger&Lobster location?
Soho. But things are going well in New York, London City, and Harvey Nichols.
Which of the competitors do you consider most successful?
I strongly oppose a generic Forbes’s evaluation of success! It’s my understanding that any person who enjoys what they do for a living is successful. I’m not ready to take part in those rankings!
Ok, moving on to other projects! Is your restaurant “Beast” is also mono-product?
Yes, we serve Nebraskan steaks and Norwegian crab. I opened it out of selfishness. I wanted to show that I can do a variety of things well. It was very exciting professionally, but if I didn’t open it, nothing would have happened. I think that I will create franchises in New York, Miami, Las Vegas, Los Angeles, Qatar, and Kuwait.
And how are things going at Rex&Mariano?
I wanted to bring the concept of healthy eating (carpaccio, ceviche, tartare, shrimp, oysters) to London. But I wanted to sell them quickly and at a normal price. However, it turned out that British do not eat fish to the extent I want them to. Therefore, the restaurant is moving to a smaller space, where we can make up the 20% profit gap.
Which of your restaurants is your personal favourite?
“Goodman” at Maddox Street. I’m very comfortable there. That’s where I met my wife.
AWAY FROM THE OFFICE
What are your favorite places to eat outside of London?
In New York City — Chelsea Market, Smith and Wollensky. Moscow — the buffet at Bolshoi Theatre. I miss it (laughs). London — Barrafina.
Your favorite dish?
Steak! Rib-eye on the bone! I can easily eat 28 oz! And burgers!
Does your wife also eat steak?
She has a totally different view on the food. She eats her steak well-done! Sometimes I’m offended by this: how long do I need to teach you how to eat steak?!
What do you cook for guests?
I try to figure out what people like and cook it. Often it is barbecue or pasta, but I can bake as well.
Do you cook every day?
I often cook for my daughter, son, mother, wife, dad and business partners. I have many friends from all countries because my company employs more than 1000 people.
Write that my wife is the best cook!
Who inspires you?
People who are engaged in fundamental research in various fields. I am interested in linguistics and interdisciplinary sciences such as neuromarketing. If we talk about business, I love to read, how companies start: Twitter, Google, Nike, Wikipedia. I like creating a business out of nothing, I’ve done it many times successfully. I am a serial entrepreneur, I guess.
Or a serial maniac!
Hah, it’s Friday, a tough day, I kind of want to relax, take off my jacket…
An interview with a glass of wine is always best!
(Mikhail asks his assistant to uncork a bottle of white Grecanico, 2013). I would be happy to join, but I will immediately fall asleep. Business requires incredible enthusiasm and energy!
What is your typical day?
I wake up at 6:30 am, prepare milk for my kids (the oldest is 2.5 years), then my wife and eat breakfast. I walk to work if I have a meeting I take the tube. I rarely use a taxi, but if I do, it is hailo. In the evening, we put the children to bed and watch TV with my wife. We love Game of Thrones and are finishing Homeland. On the weekends, we take the family to the park, local market.
Your advice for building a business?
Open a restaurant, but only when you are sure that you can do something better than anyone else.
Text and photos by Kristina Moskalenko.