During a question-and-answer session after his speech, Mr. Isdell discusses why he's optimistic about the Russian market. Video courtesy of the Coca-Cola Co. Used with Permission. VIDEO Click to see Mr. Isdell's FULL SPEECH on Coke's Web site.

Neville Isdell seems to know as well as anyone the maddening maze of bureaucratic red tape that comes with doing business in Russia.

The Coca-Cola Co. CEO led the opening of the company's bottling plant in Moscow in 1994, its first in the former Soviet Union.  He's done business in Russia for 20 years, and he chairs the board of the U.S. Russia Business Council, a Washington-based trade group.

At a briefing hosted by the Southern Center of International Studies at the Atlanta History Center, Mr. Isdell recalled Coke's rocky experience building its first facility in Russia more than 20 years after the company started selling there in 1970.

The first step was to buy land, a considerable challenge in a planned economy where property values and leases were foreign concepts, Mr. Isdell said.

Remaining patient as Russia built the mechanisms to handle Coke's request was a trying task, especially when the government offered the company some less-than-ideal tracts for future development.

"One was a chemical dump, another had been a biological weapons plant and the other was right next to a sewage treatment plant," Mr. Isdell said.

Eventually Coke found a suitable site, but that only started the real struggle: getting the agreement past the necessary government forms and protocols, Mr. Isdell said.

Two years, $35 million and countless meetings and discussions later, Coke's first plant started operations, running two shifts from the day the plant opened.  By 1997, the company had opened 11 more.

Weathering those obstacles was difficult, and to endure them probably would've been impossible for a company with less resources, Mr. Isdell said.

But he remains convinced that Coke’s persistence in Russia was a good business decision, especially in view of the country’s future. 

Today, Coke's system in Russia employs about 10,000 people and has invested a total of about $1.5 billion, and the company plans to double that within the next five years.

Mr. Isdell said Coke's primary source of confidence is a generational shift in ideology coupled with an emerging Russian middle class. 

Old, anti-growth policies are dying fast, and millions of people enter Russia’s middle class each year.

"The middle class are the underpinning of change in any society, and as they come into the real economy, a genuine consumer economy arises, a consumer economy which allows businesses like us to actually thrive as we flourish," Mr. Isdell said.

Zack Kollias, senior vice president for international operations at Atlanta-based Church's Chicken, told GlobalAtlanta in a recent interview that his company is launching a similar expansion in Russia for related reasons.

A franchisee of the fried chicken concept (called Texas Chicken in Russia) opened the first two stores in Moscow and St. Petersburg last December with the rights to open about 100 more stores in Russia, Belarus and Ukraine.

Mr. Kollias echoed Mr. Isdell's comments about the inconvenience of dealing with the bureaucracy there.  He described a long ordeal in which a supplier had to get stamps of government approval for a trademark Church's had already cleared for use. 

"Some things have changed and some things haven't changed,” Mr. Kollias said.

But the potential for growth outweighs any annoyances, and Church's also notes rising disposable incomes as a reason Russia is one of its largest international markets in the coming years.

But everyone doesn’t see Russia’s potential, according to Mr. Isdell.  Negative perceptions in the West haven’t been adjusted to reflect Russia's increasing economic vitality, and the recent political situation hasn't helped.

President Vladimir Putin, who is very popular among the Russian citizenry, has taken a hard line against America. 

The stance of his recently elected successor Dmitri Medvedev, who many analysts believe was handpicked by Mr. Putin, looms as an imposing question mark for those doing business with Russia. 

Mr. Isdell, who has met both men, is quick to point out that he's no politician or futurist, but he predicted a more liberal, open Russia is in store under Mr. Medvedev.

Sergio Millian, president of the Russian-American Chamber of Commerce's Atlanta branch, agreed.  Mr. Millian said Mr. Medvedev is the first Russian president to speak fluent English, which will facilitate more open discussion about business.

The change in leadership could also be good for Georgia's relationship with Russia, he said.

More than 40 Georgia companies already have offices there, and the chamber is looking to attract a Russian consulate to Atlanta, a subject Mr. Millian discussed with officials at the Russian Embassy during a recent trip to Washington.

While Mr. Millian agreed that Russia's middle class is growing, he said Russia needs to become more accessible to small- and medium-sized enterprises that don't have the same resources as larger companies like Coke.

"Moscow is the most expensive city in the world, and the cost of opening business is also very high, so it's tough for small businesses to compete in that type of environment," he said.

Mr. Millian recommends that smaller companies looking to enter Russia consider regions outside the large cities.

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