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FAST FOOD - Secrets of the pizza pros

  • 2008-03-26
  • By Howard Jarvis

TAKE OVER: Cili Pizza restaurants are springing up all over Lithuania as the restaurant is fast becoming the countries favorite pizza joint.

The Lithuanians love it, the Estonians hate it (relatively) and the Latvians will put up with it, provided it has a Latvian flavour of course. The Balts have very different tastes in fast food as our reporters discovered. This week Insider looks at an industry which is still trying to find its niche.

VILNIUS  - Let's get one thing straight from the start. Cilija, the Lithuanian company behind the enormously successful Cili pizza brand, is adamant that pizza is not fast food. However, since pizza is undeniably food, and since even Cilija cannot deny that  its pizza tends to arrive at the table pretty quickly, we think this justifies its inclusion as fast food in the latest Industry Insider.

The other reason one could refer to Cili as fast food, is the restaurant chain's phenomenal growth since launching its first eatery in 1997, making Cili, pronounced "chili," a household name in Lithuania.

Raking in revenues of almost 50 million euros in 2007 from its 55 restaurants throughout Lith-uania, plus 17 in Latvia and others further afield, Cili's has managed to resist competition from a decade of imitators. Industry sources report Cili's has  some 45 percent of the restaurant market in Lithuania and is among the Baltic region's strongest public catering companies. 

Cili expanded  into Latvia in 2002 and  also has opened two outlets in Kiev, one in Bucharest, and opened another restaurant in Tallinn's Kristiine Shopping Center six months ago. A second Cili's restaurant in Tallinn will be unveiled before the year is out.

In Vilnius, the very first Cili appeared in a ramshackle hut on a patch of grass at the lower end of the former Ukmerges Street. The location was well away from the Old Town. Back then, Ukmerges was little more than a goat track. But from the start, the idea was to attract Lithuanian diners, rather than assume only foreigners had the money to eat out. 

Today, this segment of Ukmerges Street has been renamed after the constitution, transforming it into a broad city boulevard replete with towering skyscrapers. The flashy Europa shopping mall has replaced both the grass and the hut and, appropriately enough, there is a Cili pizza restaurant on the top floor, its wide windows affording views of Europa Square and sharp-suited individuals hurrying across it.

Over the years, Cilija has launched several other brands, dishing up traditional Lithuanian food at Cili Kaimas ("Cili Village"), Chinese food at Cili Kinija, pronto lunches at Cili Bistro, and coffee and "alcoholic shakes" at Cili Kava. The company even has its own Cili Academy to train an army of chefs, waitresses and waiters.

Cilija's latest innovation comes in the shape of Cili Drive, a  fast food drive-thru serving car-friendly pizza slices and assorted stodge. This is still a pilot project with the sole location being on the Kaunas-Vilnius highway.
A rapid expansion in recent years is being followed by a more cautious approach  as the company  plans to only open two or three new restaurants  in 2008.

"When you expand quickly over a long period, it's hard to keep up the quality," Mindaugas Gumauskas, Cilija's director of marketing, explained.

Describing the company's first restaurant as an "experiment," Gumauskas  recalled how the founders of the Cili business initially had nothing in the way of a business plan. The only pizza available in Lithuania before their opening were little circles of cheese and pork fat on bread sold at  street-side kiosks.

"There were no precedents, no pointers as to whether Lithuanians would like it," he said. 

This pioneering spirit soon rustled up results. Being the food most desired in the U.S. 's Americans eat 350 slices of pizza every second 's Gumauskas believes that, in Lithuania, pizza has been so successful because it is a symbol of freedom and the West. But there are, of course, other reasons for the astounding popularity of pizza.

"Who can resist the choice of more than 50 different combinations of ingredients?" Gumauskas asked rhetorically.

There are also problems holding the business back, such as the debilitating lack of a labor force in the Baltic region, according to management. It is proving hard to find polite and motivated young people to sign up for the Cili Academy, since most ambitious youngsters with a modicum of English have already left for the U.K. or Ireland.

This is leading to a change in strategy, pushing the company to seek to license Cili franchises.  Management hopes that letting someone else take care of the hiring and firing will ease the strain.

"The idea of franchises is still fairly new in the Baltics, but there are many entrepreneurs interested in taking it up. The Cili brand is well known and they can make use of our strong marketing and customer experience background. They also appreciate our detailed user's manual," Gumauskas enthuses.

Eleven Cili restaurants in Lithuania are already  operating on a franchise basis. In Latvia, one-third of the restaurants are franchises. These franchises  help to expand the business without straining Cili's resources, according to restaurant officials.

Inevitably, competition is intensifying. The formidable VP Group, the billion-euro business behind the Maxima retail brand, recently  introduced the CanCan pizza chain. However, Cili has dealt with  competition before. When Lithuanian rival, Pizza Jazz, opened three pizzerias in prominent locations in Riga, Cili, with clinical efficiency, simply bought them up.