KYIV – Two Australians’ love for a national delicacy emboldened them to plow $250,000 into a meat pie factory in the midst of a Ukraine wracked by war and revolution.
Peter Kuhn, owner and namesake of Peter’s Australian Pies, sought out Glen Hollings at a networking event here after he heard Hollings was mulling an Australian meat pie enterprise. The year before, Peter had launched his own meat pie company.
“I told him that he had two options”, Kuhn said jokingly. “He could either join me -- or I could have him killed.”
The meat pie is considered the national dish of Australia. A hand-sized pastry pouch contains diced or minced meat -- beef, pork, chicken, or duck. The meat is complemented with other fillings, such as cheese, vegetables, gravy.
The company offers other Australian products, including pies, sausage rolls, banana bread, biscuits, and cakes.
The pair’s investment includes a 500 square-meter kitchen and $53,000 in equipment, largely manufactured in Ukraine.
“We make an effort to purchase locally,” said Kuhn. “For example, I brought one metal pie frame from Australia – which was tricky enough – and showed it to a metalworker here. They produced the rest from there. As well as our racks, benches, and counters.”
The company employs eight Ukrainians and buys all ingredients from local producers.
Australia is often called 'the lucky country," but Kuhn’s timing in launching the company in Ukraine could not have been more unlucky.
He already spent $150,000 and the new kitchen was three-quarters finished when Ukraine’s Revolution of Dignity rocked the economy in 2014.
“The inflation nearly killed our product,” Kuhn recalled.
Other hurdles were Ukrainians’ unfamiliarity with the product, learning new methods of distribution, and Ukraine’s notorious bureaucracy.
“It was sometimes difficult to get local authorities to understand what we were doing,” he said. Referring to a female inspector particularly zealous at enforcing regulations, he added: “We had to take the pies to the ‘regulatory queen’ before she fell in love with them.”
Kuhn acknowledges that selling an Australian product to Ukrainians has challenges: building awareness, adapting recipes to local tastes, and advertising.
Ukraine’s post-revolution inflation saw the hryvnia plunge in less than one year from eight to the dollar to 30. It killed the company’s original idea for distribution – kiosks. Instead, Peter’s Australian Pies sold to local supermarkets. He calls his “turning point” a deal with Silpo, the supermarket chain.
Kuhn said working in the food industry in Ukraine is not that different from working in Australia. But bureaucracy can be joltingly dissimilar.
“We were told to budget $10,000 for corruption when we started”, said Kuhn. “We spent only $2,000. You just have to say ‘no’.”
He says the single biggest piece of advice he can give to other investors is to bring on board a trusted Ukrainian to guide you through language, culture and rules.
“This isn’t a venture”, said Kuhn, “it’s an adventure”.
Kuhn is convinced his investment will pay off.
“Based on the climate and the diet of the people, a hot pie just made sense,” he recalled of his thinking five years ago, when he started to sketch out his plan.
The company’s kitchen is sized to make up to 10,000 products a day. But, for now, output stands at only 500.
“We’re still not making a return on investment -- it’s taken a very long time,” said Kuhn. “But we do see growth.”
Kuhn said the company doubled sales in the last three months. It hopes to replicate that growth each quarter of this year. He is talking with other supermarket chains.
“Ukraine is a world of opportunity, you can see it every day,” Kuhn said. He points to the post-Maidan reforms and the creation of the anti-corruption police. “We’re dealing with one of the youngest countries in the world – Ukraine has so much potential.”
He attributes the resilience of Peter’s Australian Pies to his Ukrainian staff, “the best money can buy”.
“Everybody wants to help you in Ukraine,” he said as he conducted a tour of the kitchen. “It’s part of the wonderful culture here.”
Then, his staff surprised him with a vyshyvanka, the Ukrainian embroidered shirt, for his birthday.
For comments or news tips, please contact UBJ Reporter Lee Reaney at firstname.lastname@example.org
Posted April 6, 2017