Nazdarovie Case Study

During our time in Cuba, we visited many excellent restaurants and paladars that each had unique foods and atmospheres which provided a different experience every day. One restaurant that stood out to us was Nazdarovie, a restaurant that celebrates the food of Russia, Ukraine, and other ex-republics of the Soviet Union. We found that their inspiration of paying homage to the Soviet women who decided to move to Cuba before the 90s and Cubans who went to study in the USSR hit deep emotionally and was an impactful business foundation.

We were so fascinated by Nazdarovie’s business model that we thought creating something similar in America that pays tribute to a cause instead of making quick money would share purpose and meaning to people. Value Proposition We propose to build a Cuban-inspired restaurant on the St. Anthony Main riverside that serves famous Cuban, Spanish, and Latin American dishes. The restaurant would pay homage to the Cubans who fought for their countries independence and the Cuban American’s who braved their way to settle in America.

In addition, the restaurant would honor the relationship between Cuba and America and the hope that one day relations will be restored. The restaurant would display art of the Cuban War of Independence, various historical moments such as the Cuban Raft Exodus, and statues of famous Cuban heros like Jose Marti. Currently, there are only two Cuban restaurants in Minneapolis, both are small and have limited offerings1. St Anthony Main would be prime location for a Cuban restaurant due the view of the city, located on the water, and high foot traffic area.

The location would help mimic the Cuban culture in the summer months because there are many festivities that occur then. The patio outside would serve as a communal ground to order drinks, eat food, and smoke cigars. Customer Segments We originally thought that Chicago would be a better location for a Cuban restaurant because there are more Cubans living there (14,000 in Chicago vs 4,000 in Minnesota). 2 However, the Cuban restaurant business is thriving in Chicago, with roughly 18 restaurants operating and embracing the Cuban culture. Knowing this, the Chicago market is too saturated and competition would be stiff.

Minneapolis however, presents a great opportunity because there is currently no similar offering. Because of its uniqueness, we believe a large Cuban population is not necessary and that the restaurant will attract people from many different backgrounds. The Latino population is the largest and fastest growing ethnicity in the United States. There is currently 54 million latinos living in the United States and that number is expected to reach 119 million by 20603. Minneapolis is currently home to 180,000 hispanics, making a Cuban restaurant an attractive business opportunity. 4

Additionally, we believe the restaurant would be successful at attracting “foodies” due to its unique taste. A Cuban restaurant is rare in Minneapolis and the concept would spark their interest to visit the location. Lastly, the youth culture and bar scene would be intrigued to visit the restaurant because it would specialize in Cuban mixed drinks (e. g. Mojitos) and live entertainment. The restaurants would give college students and young adults a new and refreshing location to go out with friends and meet new people. The St. Anthony Main and Nordeast strip is an up-and-coming area and a common place to bar hop.

The restaurant would be successful at attracting these individuals due to its unique activities and prime location. Channels The main channel to reach the customer will be through the restaurant itself. This would involve friendly staff members, servers, and bartenders. Other ways to connect with customers will be through social media marketing such as Facebook, Instagram, and Yelp. Lastly, a big opportunity to connect with customers will be through community events such as the Stone Arch Bridge Festival on June 16th-18th. This event includes 250 artists, 4 band performances, family activities, and a car show.

The restaurant can promote the Cuban culture by showcasing art, music, food, and drinks all weekend. Relationship The relationship between the restaurant and the customers would be best defined as a personal assistance relationship because customers are able to interact with a person face-to-face each visit (Osterwalder and Pigneur). Waiters, greeters, and managers would have direct interaction with the customers each day while the kitchen staff and cooks would have the interaction indirectly through feedback from the front of house staff or surveys if the restaurant started doing surveys.

There is also the interaction that could be done through events that the restaurant hosts are participates on, social media, and email. In general, restaurant relationships with their customers are based on the personal assistance relationship because of the nature of the business. Key Activities To start the restaurant, a location on the St. Anthony Main riverside needs to be renovated to look and feel like a building in Havana. This includes the Art Nouveau, Art Deco, and Eclectic inspired architecture, cuban art in the interior, and a space for cuban music to be played.

In addition, a head chef that knows how to cook various Latin American dishes needs to be hired. The head chef will have the flexibility of making the menu and requesting any ingredients required. The last key step is to promote live music nights to Cuban American musicians to play on weekend nights. A few times a year, the restaurant could also fly out popular bands in Cuba and Miami to play. Partners Opening such a restaurant would start off with a vital partnership with Cuban-Americans because they would provide the insights into how to design the restaurant and menu from their experience in Cuba.

They would likely be customers as well once the restaurant opens. After gaining insights from the Cuban Americans in the community it, partners for the business and investors would be important. Both would provide some portion of the fund necessary to open the new restaurant and provide their own feedback on the business plan and model before getting started. Related to the Cuban Americans, the community near the restaurant would be a key partner because the customers are a part of the community.

Having a great relationship with them and having them as a partner would greatly improve the image and branding of this restaurant. Finally, because the restaurant wouldn’t be able to grow all of it’s own food key partners would include food suppliers that can provide food that is high quality and fresh enough to meet the standards of Cuban cuisine. Resources Some key resources common to any restaurant that anyone will be able to see by stepping into one include food, building, land, drinks, and the human resources from greeters to managers.

Since this restaurant is centered on Cuban, Spanish, and Latin American culture, alcoholic beverages will be needed to serve with the meal as we noticed while visiting various restaurants, paladars, and bars in Cuba. Looking at the food, something very important to this portion is that it is fresh and organic if costs allow since the Cuban food is served this way. This is especially the case of the Mediterranean restaurant where they partnered with the farm we visited. The land and building could either be purchased by the owner or rented depending on the location and cost to the business between the two options.

Drinks would vary from water to soda and juices to best match the experience one would get when they visit Cuba and Latin America. The alcoholic beverages would need to match these needs as well to create the classic drinks such as mojitos or the Cuba libre from Cuba. Human resources would include the staff necessary to run the restaurant effectively while ensuring that customers are happy and taken care of while enjoying the experience so they return. Revenue The bulk of this restaurant’s revenue would come directly from food and drinks.

A 10-90 split of drink and food, respectively, is considered low (Swallow). A 55-45 split would be considered very high (Swallow). We would be going for a 35-65 split. We want to recreate Cuba’s rich drinking culture but we also want to encourage people to enjoy the Cuban experience/atmosphere. A lot of restaurants struggle to survive the first couple years so we would just aim to break even – $150 to $175 annual revenue per square foot (Baker-Tilly). As the word gets out and Cuba becomes a more recognizable brand, so to speak, we could aim for annual revenue of $250 to $300 per square foot (Baker-Tilly).

Costs Rent/occupancy, advertising, interior design, food and beverage inventory, licensing and labor are the biggest costs that this venture has. 70% margins on food, 80% margins on liquor, and 90% margins on food are recommended (Baker-Tilly). These idyllic margins may be hard at first (due to sourcing of near-authentic Cuban food) but they are good goals to strive towards. Labor, of non-management employees, is recommended to be 18 to 20% of total sales and rent/occupancy should be 6 to 10% of total sales (Baker-Tilly).