Food for Thought … and Profits

The Changing World of Concessions

By Rick Dandes

Traditional fare at concession stands at festivals, waterparks, arenas, outdoor race events and other recreational and sporting activities have a long and consistent sales history: Hot dogs, popcorn and peanuts will likely always be hallmarks of the American eating experience. But, with the palate of the average customer evolving in recent years, and with venues around the country now having to offer a more eclectic selection of foods, concession contracts have assumed greater complexity and flexibility, as the purveyors of local and national food brands seek to carve their own slice out of the profitability pie.

Many sporting venues now boast not only main concession stands, but also portable concession carts, explained Larry Etter, senior vice president, Malco Theatres Inc., and director of education, National Association of Concessionaires. "At the main concession," he said, customers will typically find most of the basics, like hot dogs, burgers, chicken tenders, soft pretzels and ice cream, and sometimes beer."

Meanwhile, mobile vendors focus primarily on the specialty items, which are inspired in part by regional culinary favorites. In the South, it might be barbecue. In the Northeast, sausage.

"What we're seeing," Etter continued, "is that people are paying attention to quality and presentation, more so now than they've ever done in the past. I think there has been a cross-pollination between channels of business in food service and in the concession operations."

For example, he said, concessions have become retail-oriented with quicker service. "The packaging has changed, the quality of the product has changed, and pricing definitely has changed. But all of that sort of mixes into that degree of excellence you want to offer."

Another noticeable trend in the concession industry is the increased use of action stations. "We see customers more and more going to action stations for their food purchases," explained Terence Conlon, director of concessions for intercollegiate athletics at the University of Illinois. Conlon is also president-elect of the National Association of Concessionaires.

People want to see their food "made to order," he suggested. "They want it fresh. They don't want their food served in a wrapped foil bag. It takes a little longer to get your food, but there's a perceived value in it. Plus, you can charge a little more for it."

At the University of Illinois Memorial stadium, Conlon utilizes grill carts so fans see the food being prepared. "Quite often," he explained, "they will tell our grill person 'I want that bratwurst right there.' Plus, you get that aroma throughout your concourse."

Another trend Conlon is seeing more of is the 'Build your own" burger/hot dog/sausage. "You supply them the burger, hot dog or sausage, and they go to an area that has all kinds of toppings for the fan to put on their sandwich," he said. "It kind of creates this 'ownership' type of feeling. Plus, there always seems to be a line for this option, and lines tend to create more lines, which means more business and profit."

That's right, agreed Kenny Handler, senior consultant, Profitable Food Facilities, Poway, Calif. People are looking for great-tasting product and better choices, he said. "We are seeing an increase in fresh grilled chicken, teriyaki rice bowls and grilled fish. A healthier direction.

"Consider this," Handler added. "Picture a situation where the food preparer is grilling outdoors, and the flow of the operations allows them to pick up the burger straight off the grill and immediately serve it to a customer as ordered. People like that—they want options and involvement. They are now connected to the process, rather than just seeing the food from behind the windows. Customer service is going up because they have direct connection with the team."

Yogurt bars have also been a craze for some time, Handler observed. In this kind of setup, customers feel the personal attachment and investment into their creation. Facilities love it because of the low labor and added entertainment value it provides to the customers. "It is as fast as the customer wants to go and allows them to own it in a sense," he said.

What does it all mean? When talking about concessions, it means exceeding the customer's expectations. "That is the overall trend right now," Etter said.

How do we exceed the customer's expectations, whether it be at the concession stands at the street festival, or at the club level in stadiums and arenas? By offering extraordinary, fast service, high-quality food and careful pricing. It's all about perceived value. "It's kind of a big, broad statement," Etter explained, "but it is accurate because each individual channel of business is different. As a whole though, in our industry of concessions, everyone is working toward trying to exceed customer expectation. Or at least they should be."

The Law of Attraction

Concessionaires can no longer wait around for the customers to walk up to their window and order. "We are getting smarter in our operations by linking and integrating food with everything we do at our facilities," Handler said. One simple idea to attract customers is to offer group deals with the food included. Or, at the very least, a voucher to lead customers to your window. Handler also suggested using the power of social media.

"Build a campaign around the food at your facility on Facebook, or try an e-mail blast," he said. Food is the easiest item to sell when there are no new attractions or items at your site. Above all, the campaign must show the customers eating and enjoying the food.

Want to lead customers to your concession stand? Use simple paw prints as fun signage pointing the way to the stand, or find some other visual signal that fits in with your theme.

Many concessionaires have discovered that using trailers and mobile carts strategically placed around your park or arena can increase sales and customer satisfaction. "The more points of sale you have, the better you can serve your customer," Etter said. "It all goes back to speed of service. And diversity is a good thing. Why not have a beer cart? That serves all the customers you wouldn't get because they hate to wait in long lines behind people buying food. Be very specific about what you offer at a mobile station. Diluting the locations from one central spot to maybe three or four, spreads people out and speeds up service, which people appreciate."

Some facilities, Handler said, are gaining hundreds of thousands of dollars in return by remodeling their ever-aging facilities. "A lot of our facilities were built in the last century and have surpassed what some of us call relics," he said. Now, it's no longer a laughing matter. With new health department requirements and the desire to be financially successful, recreation facilities are taking the next steps in remodeling their establishments.

Health and Wealth

More and more people are trying to eat healthier, and recreation facilities and sports venues are reacting to that trend by offering healthier options, including grilled food instead of fried items, and salads, fruit snacks, fresh fruit, granola bars, veggie burgers, yogurt, gluten-free items and wraps. Bottled water sales have been climbing the past 10 years. Even children are ordering a bottled water instead of a soda.

Subway, the corporate franchiser, which features many locations within recreational and sporting venues, has thrived on offering healthier choices. "We make our sandwiches, basically, the way customers want them," said Kevin Kane, public relations manager, Subway (corporate), Milford, Conn. "Our basic concept from the beginning has been, if someone wants a meal on the go, a healthier option, they certainly have a chance to do that with us. If they want to indulge in something more than a quick on-the-go meal, we offer that as well. But the trending from our perspective is eating healthier for people on the go."

Subway tries hard to keep its sandwiches below 6 grams of fat, added Liz Smethurst, global account manager for new business development, Subway corporate. "Our customers can lower the calorie count by choosing different options. Not taking cheese, for example, olives and having more vegetables. We do make them aware of what we can offer them at lower calorie counts. If you are a weight watcher you definitely know what you can eat and what you can't eat at Subway, and it's not so evident at other places."

"Concession operators have to get away from uniformity and scale. Each venue should have as its goal, coming up with something unique that stands out."

Local franchisees often collaborate with recreation facilities and arenas to offer their sandwiches, for parties as an example, Smethurst said. "That's not something corporate headquarters gets into."

But the reality at most concession stands is that healthy food choices only account for about 1 percent of sales. "Do we try to slip some healthy food onto our menus?" Etter asked. "Most assuredly, yes, we do. Do people ask for it? Not really. I think operators have always sold something healthy. But we look at it as an entertainment package; we sell dark chocolate covered raisins, trans-fat free: dark chocolate is supposed to be good for you, raisins are fruit. There is a way to put a twist on healthy food that can help sales, and make you money."

The Keys to Success

Speed of service and quality offerings will drive consumer patronage, Etter said. "Look, bottom line, our business is a secondary revenue business. Meaning, people don't go to any stadium or arena, movie theater or airport for the foodservice. They go for the product on the movie screen, on the field or the race event. This is the one big thing for us in the concession industry is to get our hands around. We think if we lower the price of hot dogs we're going to sell more hot dogs. That is not true. We think that if we do certain things, we can sell more. But that is not necessarily true either. The key components for us are speed of service and food quality."

Concession operators have to get away from uniformity and scale. "We need to have things that are creative," Etter said. "Each venue should have as its goal, coming up with something unique that stands out."

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