Feature Article - April 2003
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True Concessions

The real-life story behind how recreational facilities can improve food services, cut costs and increase profits, from snack bars to full-fledged restaurants

By Stacy St. Clair

Wait a minute before you fire up that grill. Do you really think those same-old hot dogs and tired hamburgers are enough? Are you still running your food service with the mere hope of breaking even? Then you, my friend, have a problem. That's the antiquated—not to mention financially naive—way to run a concession stand. It's time to think outside the bun.

Today's hottest concession stands, snack bars and restaurant services have creative menus, interesting condiments and clever marketing plans. And, best of all, they make money.

A portable concession building can offer more
flexibility and exposure, at a lower cost, than the
typical fixed site concession building.

"It used to be everyone was price conscious and because of that they bought the cheapest hot dogs and coffee they could find, and they served them as cheap as possible," says Chris Bigelow, a concession consultant with The Bigelow Companies in Kansas City, Mo. "Forget that. Serve the best hot dog and best cup of coffee—and price it accordingly."

The trend now can be found in everything from gourmet bratwurst to the hippest java drinks. Old-school concession philosophy suggested never charging more than $1 for a cup of coffee. But we're a Starbuck's world now. We'll happily shell out a few bucks for coffee, if it has a fancy name and a shot of espresso.

"People now pay $3.50 for a cup of coffee without blinking," Bigelow says.

As the willingness to pay for gourmet foods has increased, so has the expectation of quality. Concession-stand customers want more than just hot dogs. They want chili dogs, cheese dogs, Chicago dogs with cucumbers, pickles and hot peppers. They also prefer condiment bars with a variety of toppings, including salsas, vegetables and hot sauces.

"It's not just ketchup and mustard anymore," Bigelow says.

Famous Food

If you offer 'em Big Macs, Pizza Supremes and Subway Clubs, will the money follow?

The answer depends on who you ask.

More and more, some recreation facilities are turning to national chains to run their concession stands. Some operate as independent franchises leasing space in the building, while others sell their prepackaged food to concessionaires.

"We find it to be a huge growth area for us," says Les Weinograd, a public relations coordinator for a major sandwich chain.

Weinograd's company, for example, is the country's top fast-food restaurant in terms of sheer location. Of the business' 17,500 sites, roughly 3,500 are "nontraditional" locations such as ballparks, ice arenas and football stadiums.

The big-name restaurants believe they can help facilities lure customers with familiar menus and an assumption of quality. The patrons, for the most part, know what they're getting when they order.

"You're not going to be going out on a limb," Weinograd says. "You're not reinventing the wheel."

Some concession experts, however, believe there's no need for concession stands to hawk a Fortune 500 company's food. They argue facilities will earn more money peddling their own sandwiches and pizzas than selling someone else's.

The average big-name food will have a 55 percent cost of goods, while a generic item generally boasts between 15 percent and 35 percent.

For example, if a chain-brand hamburger costs $1, it will cost 55 cents to provide. The stand, in turn, will only clear 45 cents.

Once labor and operational expenses are factored in, it actually may lose money on the famous fast food.

"Certainly, it comes with name recognition," says David Hughes, a management analyst with San Diego-based Profitable Food Facilities. "But, in the end, you could be the one paying for it."

An alternative, experts say, is to create your own brand. A waterpark facility serving a generic pizza, for example, may want to rename it "Roaring Springs Pizza."

"Do you need Pizza Hut? No," says Michael Holtzman, president of Profitable Food Facilities. "Name it 'Roaring Springs' and suddenly you have your own name. It says who you are."

To take the do-it-yourself philosophy even further, Holtzman encourages clients to hang a sign proclaiming "No. 1 Pizza in town." The superlative will pique interest in the menu item and convince customers they're buying a quality product.

"Someone might say 'No. 1? Who says?'" Holtzman asks. "Me. I say so. There doesn't need to be an election."

Still, it could financially behoove facilities to serve the Quarter Pounders and Tacos Bellgrande. They may not be the most profitable menu items individually, but collectively they could mean more business.

"You have to look at these things in terms of what you're selling," says Chris Bigelow, a Missouri-based food service consultant. "You may not make as much money on each hamburger, but you may sell more of them."