Fast-food chains and food producers stay open in Russia, and mostly quiet about Ukraine.
While technology giants like Apple and luxury retailers likeHermès have quickly moved to pause sales or shutter stores in Russia over the invasion of Ukraine, most U.S. food companies and fast-food chains have remained open — and largely silent.
Many large food manufacturers, including PepsiCo and Coca-Cola, and fast-food chains like McDonald’s and Yum Brands are facing growing pressure on social media platforms and from large investors to halt operations in Russia.
Companies “need to consider whether doing business in Russia is worth the risk during this extraordinarily volatile time,” the chief of one big investor, New York state’s pension fund, said on Thursday.
McDonald’s, Coca-Cola, PepsiCo and Mondelez International, the maker of Oreos and Ritz Crackers, did not respond to messages seeking comment about their operations in Russia. Starbucks and Yum Brands, whose chains include KFC and Pizza Hut, have said in response to the invasion that they were supporting humanitarian relief efforts.
But unlike the retailers who have announced that they’re pausing operations in Russia, some fast-food companies do not actually own the restaurants that operate there under their names. In Russia, Starbucks, Papa John’s and Yum Brands chains including KFC and Pizza Hut are mostly run by franchisees, who often have close ties to Russian banks or investors.
Franchise experts say that, depending on the agreements, it is probably up to the franchise owner to decide whether to close a restaurant because of political turmoil, rather than the brands themselves.
Fast-food restaurants and food and beverage companies were some of the earliest entrants into the Russian market, and many have nimbly operated there for decades. Even during other times of political turmoil and tensions, the companies still found consumers eager to buy American soda and gobble up burgers, chicken and pizza.
When McDonald’s opened its first restaurant in Russia — in Moscow’s Pushkin Square in 1990 — an estimated 30,000 Russians lined up to sample its hamburgers for the first time. A few years later, Mikhail Gorbachev, the former leader of the Soviet Union, appeared in a commercial for Pizza Hut.
Unlike other chains, McDonald’s owns the vast majority of its 847 restaurants in Russia. According to a page for investors, Russia accounts for 9 percent of the company’s total revenues and 3 percent of its operating income.
McDonald’s has made no statement about the invasion. A company spokesman did not respond to questions about whether its restaurants in Russia were open, and how they are receiving supplies or handling payments. Global logistics and freight firms have halted shipments to Russia and access to critical international financial and payment systems is shut down in the country.
PepsiCo has also not made a statement about its operations in Russia, and spokesmen did not respond to multiple emails seeking comment. The company says on its website that it is the largest food and beverage manufacturer in Russia, has invested hundreds of millions of dollars in three manufacturing plants in the country. Last year, Russia accounted for $3.4 billion, or more than 4 percent, of PepsiCo’s $79.4 billion in revenues.
PepsiCo struck an agreement in the early 1970s that allowed Russia to bottle Pepsi, becoming the first American consumer product manufactured and sold in the Soviet Union. In exchange, a company subsidiary, which already marketed Soviet vodka, got the exclusive rights to also sell Soviet champagne, wine and brandy in the United States. In the late 1980s, the Soviets, in renewing their agreement with PepsiCo, gave it a fleet of ships.
In a statement to global employees on Friday, the chief executive of Starbucks, Kevin Johnson, condemned the “unprovoked, unjust and horrific attacks” on Ukraine by Russia.
Mr. Johnson added that the company would donate any royalties it receives from its operations in Russia to humanitarian relief efforts in Ukraine along with other financial contributions. On Saturday, a cheery website for Starbucks in Russia, which is operated by the Kuwaiti conglomerate Alshaya Group, showed the roughly 130 stores in the country open and operating with normal business hours.
Yum Brands, which has more than 1,000 KFCs and 50 Pizza Huts in Russia — all owned and operated by franchisees — said it was making financial donations to various humanitarian relief organizations.
As for the operations in Russia, the company said in a statement that it is “monitoring the evolving situation very closely” and that it was too early to discuss the impact.