stories

Real American pizza in Moscow in 1988 How Astro Pizza became the first Soviet fast food joint thanks to one of Russia's first massive business conglomerates

Source: Meduza

The Soviet-American company Dialog, created in 1987, was the first Russian high-tech company to attract Western capital investment. Dialog was the mother company of the first Russian investment bank, Troika Dialog, which a recent investigation revealed as the source of a number of suspicious offshore money flows used by powerful Russians. But Dialog also founded another company: Astro Pizza, a pioneer of Western fast food in the Soviet Union, which sparked nostalgic reminiscences in the Facebook group "Yes, Moscow" shortly after the publication of the Troika investigation. Meduza tells the story of Astro Pizza, which opened in Moscow long before Pizza Hut or McDonald’s — but ultimately failed to compete with them despite its initial success.

On April 12, 1988, a GMC truck pulled up to Moscow’s Sparrow Hills, then still called the Lenin Hills. It was not unusual to see trucks like this one in the city: they used to deliver Pepsi. But this one was even more outlandish than the quirky soda vans: its silver body glistened, Soviet and American flags could be seen on its sides, and slogans in both Russian and English slogans flashed red underneath them.

Passersby soon realized that this was a diner on wheels newly arrived in Moscow directly from America, and crowds gathered around it. Through the serving window, two cheerful Italian-Americans could be seen focusing on their work — tossing the dough, stretching it and inviting Soviet citizens to try real American pizza. The price by local standards was sky-high: two dollars and ten cents — or, more precisely, a ruble and 25 kopeks for a slice of pizza, with soda adding another 75 kopeks. 

This was the Astro Pizza van, the first American fast food joint in the USSR, which won the love of Muscovites for a short six months. Astro Pizza opened in Russia two years before Pizza Hut and McDonald’s. 

“The truck could often be found near the Metropol Hotel. The lines for it were huge, and there was always a lot of hustle and bustle around it,” recalled Pyotr Zrelov, an entrepreneur who co-founded Astro Pizza.

The van operated in the capital of the USSR for only six months. Muscovites hunted it down, constantly guessing at where the van would stop next. The appearance of this alien in the USSR was a sign of change that anticipated even larger transformations. 

The Soviet-American empire: from the production of computers to pizza and Troika Dialog

In the late 1980s, a series of talks took place between U.S. President Ronald Reagan and the Soviet Communist Party’s General Secretary, Mikhail Gorbachev. Gorbachev visited Washington, and Reagan came to Moscow. Relations between the two countries had warmed up, and for Soviet society, this meant the legalization of coveted Western clothes and music, which had long stopped being grounds for prosecution: the authorities were no longer condemning the ownership of objects from America. The press in the USA wrote at the time that the Soviet people “got a taste of Western life.”

In an interview with the Los Angeles Times, New Jersey businessman Louis Piancone was pragmatic: “They will love pizza. Who doesn’t like pizza?” His company launched Moscow’s first pizza van, and just a month after the grand opening, it was with obvious delight that Piancone told The New York Times why he liked doing business in a socialist country: “By five o’clock in the evening, we run out of pizza. In the U.S., there is so much competition that you have to spend millions just to sell your product. Here, customers come knocking on your door asking for it.”

The story behind that van is really the story of Piancone’s business partners, who ran the very first Soviet investment firm. That firm was founded following negotiations between the leaders of both Cold War superpowers: during the talks, the Council of Ministers of the USSR allowed the creation of a joint Soviet-American business venture. The unprecedented example of cooperation between the former Cold War opponents was incorporated at the end of 1987 under the meaningful name Dialog (“dialogue”). Joseph Ritchie, a Chicago multimillionaire, invested five million dollars in Dialog; on the Soviet side, the Academy of Sciences, Moscow State University, and industry heavyweights put in eight million Soviet rubles and, perhaps more significantly, appointed diligent Soviet computer scientists and economists to join the venture. The managing director of Dialog was Pyotr Zrelov, also the deputy director of the automobile giant Kamaz, which had a founding stake in the joint venture. His wife, Tatiana, was responsible for recruitment in the new company. 

Zrelov had already computerized his car manufacturing company. He fully understood the USSR’s need for electronics and how far it was lagging behind the West. Dialog assembled state-of-the-art personal computers and sold them to companies in the USSR; the operation was a huge success. A few years later, in 1995, Pyotr Zrelov recalled: “We made 120 million rubles in profits that year. That is a terrible figure because Kamaz, for example, made 400 million in the same year. But it was unclear what we could do with this money in a planned economy. You’d tell the official and he’d respond, ‘Right, I’ll include you in next year’s plan.’”

Since it was not easy to spend money in a closed planned economy, even on employee salaries, the joint venture made a profit the Soviet way: Dialog began to grow in breadth, acquiring various subsidiaries. Vasily Martov and Dmitry Lisitsin’s book Dream of Troika: How the Most Unusual Investment Bank in Russia Became a National Champion (2016), describes Dialog’s growth as follows: “Before one’s very eyes, the IT firm was turning into a multifaceted conglomerate with thousands of subsidiaries. Dialog filled the void: there were no lawyers around, so why not open a law firm? It also had its own architectural practice, construction company, furniture manufacturing company, and fashion company.” 

Eventually, Dialog’s Soviet-American empire boasted more than a hundred subsidiaries, and an internal brokerage company was created to facilitate exchanges between various branches. This brokerage company was then merged with Dialog Bank and with a business owned by Joseph Ritchie’s American partner Peter Derby to create the investment bank Troika Dialog. Early in the spring of 2019, the Organized Crime and Corruption Reporting Project (OCCRP) released an investigation about the bank’s offshore activities and its former owner, Ruben Vardanyan. The investigation, which Meduza published in collaboration with several international media outlets, showed that Troika Dialog had shuttled the wealth of Russia’s elites abroad for years. It served both politically powerful individuals close to the Putin government and suspicious commercial ventures that were subsequently charged with a range of financial crimes.

Back in the late 1980s to early 1990s, Dialog gave life to a wide variety of projects. The firm became an umbrella brand which not only developed a vast array of affiliates, but also offered shelter to Western companies not yet adjusted to the Soviet investment climate. 

A Moskvich car for Holocaust saviors

In 1988, Soviet officials asked the co-founders of Dialog to help American entrepreneurs bring American fast food to the country. At the time, opportunities for foreign companies were limited by Soviet legislation, but Zrelov and his colleagues already had the experience of creating a joint venture. 

“We met with a representative of Astro Pizza at the Executive Committee building [in the Lenin District of the Moscow region],” Pyotr Zrelov recalled, referring to Louis Piancone’s partner Shelley Zeiger. Zeiger had come to the Soviet Union for personal reasons: in the 1940s, his family escaped Nazi raids with help from local residents in the small town of Zboriv (which was then in Poland but joined the Ternopil region of Ukraine after the war). Zeiger later recalled that during the occupation, his family lived in the cellar of a special shelter for a year and two months, eating cabbage that was lowered into the cellar in a bucket. After the war, the family moved to the United States, and four decades later, Shelley Zeiger asked a new business partner in the USSR to thank the people who protected his family by giving them a Moskvich automobile. Zrelov later explained that buying the car ultimately proved impossible: the American had provided a blank check but hadn’t realised that in a socialist economy where shortages were common, no amount of money could help. Zrelov remembered, “This [fast food] was not our line of business, but still we decided to help.”

Helping with the pizzas proved more successful than helping with the Moskvich. Dialog legally formalized Astro Pizza’s business in the USSR but did not get involved in the daily operations of the firm. Pyotr Zrelov explained what made it so easy for a businessman from New Jersey to start a business in the Soviet Union: “Since we did everything through a government Executive Committee, there were no obstacles and no interference from officials. We were able to agree on everything very quickly.”

Astro Pizza was set to take over the Soviet market before its rivals. Pizza Hut was then already showing interest in the Soviet market, and the franchise eventually opened its first restaurant in 1990 but was only able to gain a foothold on its second attempt (the company had to leave Russia during the 1998 economic crisis). Astro Pizza began supplying Muscovites with fresh pies in the spring of 1988, and its managing director regaled journalists in the United States with assurances that the company would conquer the city on the other side of the iron curtain. Louis Piancone intended to open 25 pizzerias in Moscow by the end of 1990 and send his food truck to Leningrad for a reconnaissance mission — to advertise and sell American pizza, but also to find the best places for sedentary restaurants. In September 1988, Piancone even contemplated opening pizzerias in Riga and Tula. 

“They wanted to organize a sale,” Tatiana Zrelova told Meduza, emphasizing the word wanted. “It was just an advertising campaign for them; it wasn’t about sales figures. The aim was less to make money than to create a festive and joyful event, to familiarize Soviet citizens with American culture.” According to the co-founder of Dialog, “it was the first wind of freedom,” and part of this was the fact that there was “no militia around the food truck; nobody would ask why people were standing there.” Zrelova concluded, “It was an act of open relations between two different countries.”

Those open relations lasted a mere six months. 

A pizza joint that came before its time

During the warm season — from spring to autumn — the silver pizza van traveled around Moscow and stopped in a different spot every day. Most often, it could be found on Gorky Street in the central Tverskaya District and near Moscow State University. Regular customers tried to predict the food truck’s location and even went around the city searching for the pizzeria on wheels. The Americans sold anywhere between 150 and 200 pizzas a day, and the company seemed very successful.

But after six months of activity in the USSR, the business was closed down, the food truck left Moscow, and Astro Pizza abandoned the idea of creating a restaurant chain in the USSR. The joint venture format was inconvenient, as were Soviet laws and regulations, but most importantly, the income was in non-convertible rubles. The small pizzeria found itself in the same position as the large joint venture Dialog: a successful but specifically socialist enterprise. 

Vladimir Malyshkov, who at the time headed up the Department of Food Services in Moscow, says he remembers the Astro Pizza van perfectly but never tried the pizza itself. “I’m always careful with fast food because it isn’t the healthiest, but it was during my time that they appeared in Moscow. Here’s the thing: back then, the state didn’t really indulge in new things, but there was a sense that this needed to be done for the Soviet people. As we say, if we use the same pot to cook, we’ll get the same porridge. And if we use foreign experience and knowledge, then we can gain from that,” Malyshkov said in an interview with Meduza.

“We weren’t thinking about being the first to do something. In those days, no matter what you did, you’d be the first,” said Tatiana Zrelova. “When it came to computers, Dialog was the first, the first to work with Microsoft, the first to meet with Bill Gates. We weren’t thinking about that aspect because a new page was being written in the history of our country. We were not concerned about the fact that it was the first time: for us, it was just life.”

Pyotr Zrelov observed that Astro Pizza came to Russia too early, when the country was not ready for any business like it. The Zrelovs have fond memories of eating pizza from the van — they told Meduza it always tasted great. However, they added, they have since had the chance to visit many different countries and try a lot of things that were much tastier than the real American pizza that swept through Moscow in 1988.