Sushi Bubble Pops for Moscow Middle Class as Ruble Drops

Vladimir Putin’s first decade in power came to be known in Moscow as the “sushi years,” so totally had raw fish become a dining staple for the rising consumer class in his capital.

The sushi bubble is deflating now, hastened by the plunge in the ruble and the trade war triggered by Putin’s intervention in Ukraine that has foodies complaining about substitutes from as far away as Chile.

“The black swan event for our industry has been the confrontation with the West,” Rostislav Ordovsky-Tanaevsky Blanco, founder and chairman of OAO Rosinter, Russia’s largest restaurant holding company, said in an interview. “It’s hit costs on the foods that we had imported from Europe and the U.S., and the full effects have yet to be felt.”

Moscow’s consumers have plenty to lose in Putin’s deepening estrangement from some of his biggest trading partners. A Muscovite’s average monthly salary leaped 440 percent to 58,800 rubles ($1,530) between Putin’s appointment as president in 2000 and the second quarter of 2014, according to data compiled by Oleg Kouzmin, a Moscow-based economist at Renaissance Capital Ltd.

Their craving for raw fish now is harder to satisfy. Putin reacted to sanctions imposed by the U.S. and Europe by cutting off imports of fish, meat, vegetables, cheese and dairy products from the U.S., European Union, Norway, Canada and Australia. Since the order took effect Aug. 7, the ruble has declined 5.3 percent against the dollar, bringing its loss for the year to 16 percent. The dollar-denominated RTS stock index is the world’s fifth-worst performer among 93 tracked by Bloomberg.

Income Drop

Disposable incomes fell the most since 2009 in March. Capital flight after Putin seized Crimea from Ukraine sent the ruble tumbling, driving inflation to the highest since 2011. The government estimates gross domestic product will grow 0.5 percent this year, the slowest since a 2009 contraction.

A decade ago, rising incomes helped support Moscow’s demand for raw fish, which spanned class boundaries. The city 800 kilometers (500 miles) from the nearest sea -- the Baltic -- offered such fusion dishes as the Dai Sushi chain’s Maki pizza roll and the Green Field spicy dill roll, an eel-based morsel covered in Russians’ favorite herb.

A city of 12 million, Moscow has 949 restaurants serving Japanese cuisine, according to the listings website. New York, with a population of 8.4 million, has 462 such eateries listed on TripAdvisor Inc.

‘Like Hamburgers’

“Sushi in Russia is like hamburgers in the U.S.,” the restaurateur Ordovsky-Tanaevsky said. “It became so mass market that every pizza joint in a provincial capital looked at sushi as a savior.”

That may have caused sushi to jump the shark even before Putin’s retaliatory sanctions barred imports of Norwegian salmon and the ruble’s slide forced up the cost of replacement fish from Chile and the Faroe Islands.

“People are bored with it, and now we can’t even get sushi-quality fish,” said Kirill Sukhochev, head chef at Dve Palochki, a chain that opened its first branch in 2003.

This year his restaurants -- with a name that means chopsticks in Russian and still filled with bamboo decor -- introduced an American barbecue menu.

Rosinter is rebranding its more than 60 Planeta Sushi restaurants in and around Moscow as Planeta. The outlets are serving what they call “global cuisine,” with just one-sixth of the menu devoted to sushi. The Yevraziya sushi chain has closed all 15 of its Moscow restaurants to focus on its 126 outlets in St. Petersburg, as it struggles to cope with rising fish prices and the slowing economy, Chief Executive Officer Alexey Fursov said by e-mail.

Chilean Salmon

Fish costs jumped 30 percent in the past month, according to Dve Palochki’s Sukhochev. Customers at the 40-restaurant chain, which uses 15 tons of salmon a month, also have complained about the pale color of the Chilean salmon, he said. Sukhochev plans to roll out a new menu next month that will pass some of the added costs on to consumers.

Developing new dishes is crucial. Of the 140,000 tons of salmon Russia imported in the 12 months through June, 100,000 came from Norway, according to Kontali Analyse, a Kristiansund, Norway-based industry consultant.

Nobu Sushi

At Moscow’s Nobu, the international chain co-founded by actor Robert De Niro and chef Nobuyuki Matsuhisa, a piece of yellowtail sushi costs 450 rubles ($11.78), compared with $6 at its Tribeca outpost in Manhattan. Spokeswomen for Nobu in New York and Moscow didn’t reply to calls and e-mails seeking comment.

Since his arrival in 1998, banker and analyst Chris Weafer has experienced the spectacular rise of sushi.

“At the start of the decade you dreaded the risk of raw fish in a Moscow restaurant,” said Weafer, a senior partner at Moscow-based consulting company Macro Advisory. “By the end of the decade, you were happily paying a hefty price for it.”

It is too soon to write off sushi, which managed to survive the 2008 economic crisis with its popularity intact, according to Sergey Mironov, the head of RestCon, a Moscow-based restaurant-advising firm.

“We had this concern that sushi will go out of fashion a decade ago, but it didn’t,” Mironov said. “This product is very resilient to economic turmoil.”

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