The reaction from brands to the Russian invasion of Ukraine today saw both McDonald’s and Starbucks shutting their restaurants and cafes in Russia, while Coca-Cola is suspending its operations there and PepsiCo is pulling some products from the country.
“McDonald’s has decided to temporarily close all our restaurants in Russia and pause all operations in the market,” said McDonald’s CEO Chris Kempczinski. As of the close of last year, there were 847 locations of McDonald’s in Russia according to an investor document.
While the global business model for most McDonald’s is based on a network of franchise operators, in Russia 84% of locations are operated by the company. According to CNN, Russia’s restaurants, along with another 108 in Ukraine, all operated by McDonald’s, accounted for 9% of the company’s revenue in 2021, according to the document.
“In Russia, we employ 62,000 people who have poured their heart and soul into our McDonald’s brand to serve their communities. We work with hundreds of local, Russian suppliers and partners who produce the food for our menu and support our brand,” Kempczinski said.
“And we serve millions of Russian customers each day who count on McDonald’s. In the thirty-plus years that McDonald’s has operated in Russia, we’ve become an essential part of the 850 communities in which we operate,” adding that “at the same time, our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”
Starbucks CEO Kevin Johnson, in a letter to partners, said “We continue to watch the tragic events unfold and, today, we have decided to suspend all business activity in Russia, including shipment of all Starbucks products. Our licensed partner has agreed to immediately pause store operations and will provide support to the nearly 2,000 partners in Russia who depend on Starbucks for their livelihood.’
Speaking of how the PepsiCo brand would respond to the invasion, CEO Ramon Laguarta said: “Given the horrific events occurring in Ukraine we are announcing the suspension of the sale of Pepsi-Cola, and our global beverage brands in Russia, including 7Up and Mirinda.” Laguarta added that Pepsi is suspending capital investments, ads and promotional activity in Russia.
But PepsiCo will continue to sell baby formula, baby food, milk, and other dairy options from its product line.
“We have a responsibility to continue to offer our other products in Russia, including daily essentials,” Laguarta said.
“By continuing to operate, we will also continue to support the livelihoods of our 20,000 Russian associates and the 40,000 Russian agricultural workers in our supply chain as they face significant challenges and uncertainty ahead,” he added.
Coca-Cola also said Tuesday that it is “suspending its business in Russia,” adding that “Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine. We will continue to monitor and assess the situation as circumstances evolve.”
