Butter on Your Trail Mix? : Movie Theaters Seek to Boost Profits With Bigger Food Sales; Tests Under Way With Tacos, Cappuccino, Cookies and Pizza
Coming soon to a movie theater near you: homemade sparkling water, yogurt-covered pretzels--and Taco Bell?
You can bet your beef burrito on it. As theater chains enjoy one of their best summers ever, concessions are also booming. Sales of movie snacks topped $1.3 billion last year, and one major chain says sales this summer are up 17%. Some theaters are taking advantage of the packed houses to test a variety of new products that are a far cry from popcorn and soda.
Several United Artist theaters are hawking the chain’s own brand of sparkling water. AMC is expanding the number of locations where it sells cappuccino and fresh pastries. Cineplex Odeon hopes to eventually push its own vendor carts around to hungry patrons waiting in lines. Pizza Hut has tested sales of its pizza in several theaters and--despite poor results--soon plans to try again. And this weekend a General Cinema theater in West Hills plans to start selling freshly made Taco Bell products.
Concessions are purchased by fewer than a third of filmgoers, yet industry executives conservatively estimate that concessions often account for more than 90% of theater profits. Consumers--particularly on the West Coast--keep asking chains to carry healthier items. That’s why some Mann theaters in Southern California now offer unconventional movie munchies like dried apricots and banana chips. Fresh fruit juices are sold at some Cineplex Odeon theaters.
“The theater chains are just trying to appease the public,” said Bill Rector, president of the National Assn. of Concessionaires. But some of the new products have a very limited audience, he warned. “Everybody keeps asking for health food, but after it’s in the theater for a week or two, nobody buys it.”
And just as the fast-food giants found their way into airports and professional ballparks, they are also discovering the cinema. Like most in-theater concessions, the new wave of products all sell for top dollar. A cup of cappuccino typically goes for at least $2. A slice of pizza fetches about $2.50. And while you can get a taco for 59 at Taco Bell, tacos at the Taco Bell stand at the Fallbrook Cinema in West Hill will sell only by the pair for $2. Most chains test-market new products at a limited number of theaters before rolling them out nationally. The object is to persuade moviegoers--especially teen-agers--to grab lunch or dinner right at the movie theater rather than stopping to eat before the show.
What’s more, the General Cinema theaters that sell Taco Bell products plan to heavily promote the new link-up. Executives think they can lure young moviegoers away from other chains by offering familiar fast food not sold at other theaters.
“We want anyone who plans to grab fast food on the way to the theater,” said Jack Leonard, vice president of marketing for General Cinema.
The risk, of course, is that some consumers might skip the theater’s most profitable product--popcorn--and instead munch on a couple of tacos. But at 10 movie houses outside of California that have already tested Taco Bell products, that has not been a problem, he said. Nor have cinema floors been badly littered with taco shells or burrito beef at the few movie houses that have already tested them, Leonard said.
But fast food isn’t always a big hit at the movie houses. Several AMC theaters in Kansas City, Mo., tried selling Pizza Hut pizza by the slice. But sales weren’t high enough, so the promotion ended after just a few months, said Phil Pennington, vice president of operations for AMC.
Meanwhile, one of Toronto’s most popular pizza chains, Pizza Pizza, has linked up on a limited basis with some Cineplex Odeon cinemas there. The pizzas are prepared at the pizza parlors and delivered to the theaters where they are kept warm in ovens. “If they’re not sold within 60 minutes, we toss them,” said Ken Prue, vice president of merchandising at Cineplex.
Although McDonald’s and Burger King say they have no plans to sell their food at theaters, top concession executives predict they eventually will. Until then, theaters are experimenting on their own.
Cineplex Odeon has installed special bulk candy bins--where self-serve candy sells for $1.50 a quarter-pound--at a number of West Coast theaters, including its locations in Century City and Universal City.
But the chain stocks the candy bins very differently in Los Angeles than in its New York movie houses, Prue said. While Gummy Bears and malted milk balls are big sellers in New York, the West Coast audience generally prefers Western Trail Mix and yogurt-covered candies, he said.
A few United Artists theaters in Denver are testing the chain’s brand of sparkling water, Frontier Clear. The water is actually purified right at the concession stand and sold in clear plastic cups, said Bruce Taffet, senior vice president of concessions. By the end of August, the same water will be tested at several Los Angeles area locations.
The Pacific Theatre chain recently began to bake Otis Spunkmeyer cookies right at their concession stands at some locations. The cookies are two for a dollar.
But no matter how many new goodies Pacific Theatre offers, one thing always remains the same, said Milt Moritz, vice president of advertising. “The two bestsellers never change,” he said. “It’s popcorn and soft drinks--period.”
Briefly . . .
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