Substance vs. Sustainability: The challenge of staying relevant

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Snack Corner

We have witnessed a transformation in foodservice operations and concession stands over the past 36 months. The tendency seems to be moving to more adult selections vs. a menu addressing kids’ imaginations: Cobb salads vs. Twizzlers. The paradigm shift has caused a chain reaction, making theatre owners and designers rethink equipment needs, room layouts, training and hiring practices, as well as delivery services. All this capitulating to adult-style food and beverage service including alcoholic innovations leads to questions about the relevancy of the offerings. The paradox here is that the primary audiences that cinemas serve are under the drinking age and cannot even purchase adult beverages.

Recently, Nielsen released surveys that showed over 15% of the interviewees wanted alcohol service in theatres. In most scenarios, marketing experts would move immediately in this direction, as that is a significant number in the retail store. However, when the number is reversed, the survey is actually saying that 85% of theatre patrons either don’t want or don’t care if adult beverages are sold. Furthermore, of the 85% that did not care about adult beverages, 83% of those interviewed stated they would not take their kids to a theatre that sells alcohol. There seems to be a message here: In attempting to grow 15% of the market, are we running off 65% of our “regulars” and the next generation?

Adult beverages, spirits, wines and beers typically sell for more than the large sparkling beverage, leading the theatre to higher food and beverage sales. It is also common knowledge that if an adult purchases one alcoholic beverage, he/she will purchase a second, translating into double the sales of a 44-oz, soda. For these reasons, it is natural for theatre owners to consider selling adult beverages.

Data released from NATO shows that 31% of all moviegoers are under the age of 21. This brings to mind the challenge of staying relevant. Ron Krueger, president and chief operating officer of Southern Theatres, points out that his Movie Tavern Brand specifically has a kids’ menu and special showings such as “breakfast and a flick” to attract younger audiences to the venue. He also positions the presentation as “a family-friendly experience that just happens to sell adult beverages.”

Damon Rubio, founder and president of D’Place Entertainment, has a similar view with a slight twist. “We are introducing alcohol as a competitive advantage,” says Rubio. “There is a certain cost of doing business, and this helps us offset some of those costs. Adult beverages are not an all-or-nothing thing; we are in the experience business and this helps enhance the experience for some adults.” He continues, “I believe there is enough diversity in the facilities and film product to allow the expansion of menu items and beverage selections.”

There is a saying in the entertainment business that goes “Play to your audience,” which leads us to quantify that opportunity. The significance of this trend toward adult preferences in food and beverages will change the way the next generation of theatres are built and auditoriums formatted. The requirements for these new menu services and beverages will be more expensive and reduce the seating capacities. This trend will lead to a split in theatre accommodations. Boutique theatres will be addressing purely the adult audience vs. cinemas that facilitate family entertainment. The implication is that of sustainability. Can theatre owners afford to build and endow two separate styles of service? The other question that remains unanswered is: Will the auditorium become a restaurant that presents movies, or will the auditorium continue to be a sanctuary to see films with munchies?

A fear is that either way it might hurt the cinema experience in the long run. If adult beverage and food services have a profound impact on the cinema visit and become the way of the future, will this repel the younger audience and teach kids to find other modes of entertainment? If new and innovative offerings are not offered to the adults, the people with the money and funding, will they find other choices in entertainment? Interestingly, the surveys are tainted, since they are conducted using adults and adult questions. When was the last time we asked a kid what he likes at the movie theatre?

So how do cinemas stay relevant and continue to cultivate the next generation of moviegoers while at the same time appeasing the financiers of the revenue streams at the theatre? It should be noted that as long as the studios make films for younger audiences, kids will buy tickets, and their parents will have to buy a pair as well. If the studios produce R-rated films, then the food and beverage options will not matter, as the younger generation will not attend the showings. Therefore, while we continue to supplement the services in theatres with more mature options, let’s not forget that patrons do not come to the cinema for $5 kiddie combos and $12 martinis, they come for the film and its presentation—and that might be what is driving the substance and sustainability.