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SBD Global/February 14, 2014/Olympics

Sochi Winter Games Help McDonald's Expand In Russia

The Sochi Games jump-started McDonald's business in southern Russia, leading to the construction of five restaurants in the Sochi region and allowing it to add smoothies, parfaits and wraps to its menu.McDonald's Russia CEO Khamzat Khasbulatov said, "Because of the Olympics, we built them. They've been so popular and packed." McDonald's Head of Global Alliances John Lewicki added, "We've been in Russia for 24 years, but it's still a great growth market for us. (The Olympics) helped our business tremendously. The support of the organizing committee and the government, the way it's set up, will help our business a lot more. It's a great generator for us." McDonald's built two restaurants in the Olympic Park, one for athletes and one for journalists. It is serving 6,000 customers a day at those two locations. Because it was building those restaurants as part of its sponsorship commitment, McDonald's expanded its supply chain in Russia to offer menu items it serves in other parts of the world. It added smoothies, parfaits and grilled chicken wraps to the menu. The parfaits had to pass Russian regulations for yogurt and be made from local products. The company set up the supply chain for those items, secured government approval and began serving them last October. Khasbulatov said the new items will be available at McDonald's locations around the country in the future, which will help boost national sales as well as choices for customersKhasbulatov said,  "Providing variety is still one of our biggest business drivers." The U.K. and Russia are McDonald's two biggest European markets. The company has 37 restaurants in Russia, and those restaurants rank among the top 100 in global sales for the company. It plans to open more than 45 restaurants in Russia annually in the coming years. Lewicki: "We have ambitious growth plans over the next four years. The World Cup is coming here (in 2018) and that will help as well. (Sports) gives us a great opportunity to talk to consumers and explain our brand in a way that here, where Russian citizens are very supportive of the Olympics and the World Cup, offers a great opportunity to develop our business." Khasbulatov and Lewicki were speaking at a playground McDonald's built in Adler near one of its new restaurants. The playground is one of the legacies the company has been leaving in Olympic cities ever since the Vancouver Games. It's become the physical embodiment of the company's effort to promote and encourage kids to be active. In addition to that, McDonald's is running its "Champions of Play" program at the Sochi Games. It will bring 300 kids selected by schools across Russia to the Olympics. It also will host the winner of a youth hockey tournament it sponsored, and it is in the process of arranging a time for the kids to skate and play on one of the two hockey rinks built for the Olympics. The company first began providing behind-the-scenes access to children it brought to the London Games. Those kids were able to go to the archery venue at Lord's Cricket Ground and meet Olympic archers.Lewicki:  "We're working with the IOC to continue doing that."
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Olympics, Russia

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