Expanding the Menu

Movie Theatres Experiment With Restaurants and Bars

July 01, 2005

-By by Andreas Fuchs


/filmjournal/photos/2005/07/Menu.jpg
Appetizer: Hungry for More

"We are in the dark ages," apologizes Mary Foote of The Colonial Theatre in Phoenixville, PA (thecolonialtheatre.com). Yet the cinema's menu of "water, soda, popcorn, typical candy, coffee and biscotti" is already more than many concession counters care to share. Although this 1903 theatre turned classic movie house is most famous for patrons running from The Blob, this FJI special report is, of course, all about luring people to the theatre, and to the concession stand in particular. Why are we talking about a 1958 cult horror flick, featuring Steve McQueen in his screen debut, you may ask. Well, the man-eating movie-monster goo and today's audiences have something in common-a voracious appetite for more.

Incoming NAC president Larry Etter of Malco Theatres believes, "We'll continue to see theatres with restaurants associated in the building, such as a section sublet or an out parcel, so that the entire entertainment piece is there." Where our March 2005 survey featured a look at the tried-and-true, this month we're sitting down to wine and dine and brew and view. Or should that be wooed?

"Movie chains woo fans with fancy food, wide seats," proclaimed the Associated Press on April 10, 2005. Reporting from National Amusements' latest Cinema De Lux Maumee 18 in suburban Toledo, OH (for a detailed discussion of the concept, see our February 2004 issue), author John Seewer opined, "Selling glasses of wine and higher-priced seats in an atmosphere that has a country-club feel is another way to increase earnings and give people a reason to leave their homes for a night."

"The trick is always finding another item that will add to your sales," reveals Regal Entertainment Group's Rob Del Moro, senior VP and chief purchasing officer at the world's largest circuit. "Over the years, I've come to realize there really isn't a silver bullet out there to get that for you. You can increase one thing and the sales of another will possibly decrease. It is very easy to lose focus on your core items. Be careful how much space and manpower you dedicate to this," he cautions. "There is a fine art to doing this."

In some areas, "the cannibalization factor on Coke and popcorn is too high-risk," adds Crispin Lilly, director of retail at recently merged U.K. circuits UGC/Cineworld. "So we had to balance off what level of eating into our standard products with higher margins we were getting versus what we were genuinely making more incrementally."

All interviewed for this report agree on the importance of professionalism. Recalls Lilly about the more adventurous Virgin Cinema days, when the focus was almost exclusively on retail operations, "The main reason why some concepts worked and some did not was mainly not thinking enough about who the cinemagoers were and why they were there in the first place. To see a movie somehow got lost in the shuffle. Quite simply, we had a very good concept but were dabbling in areas we're not the professionals in. In order to run a successful restaurant, you have to be an expert restaurant operator without the distraction of a cinema, if you will."

Quality also goes with price, our experts at Vue Entertainment and Regal agree. "We want to present to people a quality brand," says Vue chief operating officer Steve Knibbs, "where they know it's good and fresh, and don't feel it's something cheap." Contends Regal's Del Moro, "You have to go with a very good quality product when you want to capture that kind of price point at the cinema. It's tough to sell another brand that might be available at the supermarket, for instance."

Film Journal International hopes you will enjoy this food for thought.

Main Course: Have Dinner at a Movie!

"The theatre business has absorbed various pieces of what has happened in other industries," states Malco Theatres' VP of concessions Larry Etter (malco.com). "In fact, we've all borrowed from each other." The incoming NAC president (see profile in this issue) names chicken tenders and pizzas as prime examples how "the concession industry has borrowed from the fast-food and QSR [Quick Service Restaurant] segment. Technology-wise, with point-of-sale systems we've tried to further improve efficiency. Likewise, airports have checked out our operations for speed. We've looked at fine dining to put a bit more polish to our stands and make things aesthetically pleasing when you walk up."

That main concession stand, Etter foresees, "is not going to grow its diversification in terms of food products offered. Instead, we'll see small coffee-shop-type operations and ice-cream parlors, wine bars as part of the lobby or maybe as an offset. We won't see any more 30-plexes either-they'll go back down to 16, 18, 20 screens, but substantial square footage will be set aside for food service."

One such cozy lobby place is Regal's Café Del Moro. Offering a range of coffee specialties and complementary items such as biscotti, muffins, cookies and sweet gourmet pretzels, it is not a cookie-cutter program, pun intended. Placing his namesake café in strategic locations across the country, Del Moro first and foremost believes that market research is in order. "These programs do not work in all markets. We are very selective of where we include cafés. Any time you offer a product, there is the potential to cannibalize your core items. You have to be certain it will actually add revenue."

Etter concurs when it comes to the bottom line. "As nice as it is to have some of those fancy foods," as he calls them, "those more upgraded items really slow down our process and do not make us a lot of money. It's sort of an even trade. By the time we upgrade our facilities-in the process we need bigger kitchens, ancillary systems, more stainless-steel equipment, insurance goes up-will higher spending offset the additional expense and labor? By and large, everybody agrees, it does not. Although per-capita spending goes up."

While "there are as many opinions to be found on this subject as the next crop of great ideas," according to Derek Galloway, managing director at cinema retail systems provider Martek (martek.co.uk), many "are coming from pizza sellers, coffee vendors and large industrial conglomerates...who have serious motivation in convincing in some cases naive operators that the latest idea is going to make the difference. Always remember, turkeys have a very specific opinion about Christmas!"

On that note, Cinema Expo Exhibitor of the Year Vue Entertainment (myvue.com) believes in research. "We talk to our guests, test new products and try new things out," says Vue's Steve Knibbs. "I'm not sure about sushi, but I can envision different offerings at different locations. What we don't need is something that would go everywhere, but instead something that is unique to the audience in a given market. My experience is that people across the U.K. have very different needs and wants. For example, the further north you go, the sweeter people's tooth gets. In London it's more about water and healthy things like sorbets, which we are currently testing. You just have to look and try new products." So, if there were interest from the public, "we would give a go to a partnership with Marks and Spencer or Prêt a Manger for sandwiches or sushi, I am sure. You never say no to anything."

Tim O'Connor, co-owner of the Catlow in Barrington, IL (thecatlow.com), already has his very own Boloney's Sandwich Shop (boloneys.com)). Located right in the storefront of the 1927 Tudor Revival with Deco-design theatre, "we allow all of our patrons to bring their meals in with them," he says, "everything off the menu. We don't have any tables in the auditorium or anything fancy. Customers are given a tray for their laps. No complaints yet!" As "more popular items," O'Connor names "our San Diego sandwich, or the Reubenesque, our version of the Reuben sandwich, as well as many salad items. When we first started to offer our Boloney's menu to moviegoers in 1988, we were concerned about cutting into our concession sales. It hasn't really had a noticeable effect." On the contrary, "people seem to enjoy the variety." During the day, "when the theatre is not in use, we set up tables in the lobby for our restaurant customers. Then at night, we fold them up and stash them away."

Regal's café areas include seating and tables as well, but more for "aesthetic reasons," Del Moro finds, rather than for functionality. Looking at the social aspect, he does not see the lobby as a gathering place. "People are so pressed for time. They come in, want to be served, want to see their show and then they're on their way." While desert-type refreshments seem a good match, more hearty fare such as pizzas have been showing up at some of Regal's mainline stands, in addition to the standard salty offerings of popcorn, nachos, hot dogs and pretzel sticks. Again, Del Moro believes in selective markets of "mostly city-type, urban locations." Wherever these kinds of foods are found appropriate, Regal then uses par-baked items that were partially cooked before being frozen, in order to facilitate quick serve and turnaround. "You don't have the ability to expedite a lot of time on preparing anything," Del Moro knows only too well.

Further reflecting on efficiency, he feels "the best way to improve sales is to increase productivity, throughput and service levels in the stands. With all the technology available in the ticketing area, such as advance sales and the Internet, we've eliminated the box-office problem. But people still come within that finite amount of time. The idea is to use technology to help expedite purchases and move more people through concessions." Currently, Regal is rolling out bar-coding technology that, very much like scanners at the supermarket, is intended to increase transaction times. Stand design is equally important for Del Moro, as it allows "the flexibility of having multiple stations open to service more customers in that same given time."

"Concession planning and development can sometimes play a very poor relation to a host of other development considerations in a new complex," cautions Martek's Galloway. "Sometimes left to the very last moment...what emerges in the foyer lacks in most of the key elements relating to efficient layout, robust construction and appealing design. Any marginal savings"-which he feels are mostly perceived-"will be more than offset during the early weeks of the operation and will continue to drag financially on profit performance throughout the life of the complex."

Meanwhile, Cinemark USA has addressed the busy lives of moviegoers. "Want dinner and a movie, but don't have time for the dinner?" cinemark.com asks. Exclusively branded, Hollywood-themed Studio Eats Café, Mama Rugi's Pizzeria and Java Wally's Coffee Bar "allow you to fulfill your appetite for more than just popcorn: Take your eats to your seats!" And, at select Loews Cineplex Entertainment locations (enjoytheshow.com), patrons don't even have to do that any more. Parts of the "Guest Express" experience, as the program has been called, are assigned oversized leather seats and very personal attention. A staff member will indeed deliver, to the attached small table, all those concession items that you ordered from a special auditorium menu.

"We look for unique items that work with what we currently have," says Kevin Stengel, VP of concessions at Movie Gems Inc., the parent company of UltraStar Cinemas (ultrastarmovies.com). He describes a new offer at the circuit's latest in El Centro, CA. "You can get nachos at almost any theatre. So what we've done is to add a full salsa bar with toppings such as tomatoes, onions and hot sauce, jalapenos and salsa that people not only use for their nachos, but on hot dogs and popcorn as well." While technology may be a focal point at Imperial Valley 14 Cinemas-UltraStar's trademarked "Pure Digital Cinema" featuring DLP Cinema makes it "the first theatre in which the infrastructure has been designed and constructed to accommodate all digital cinema in each auditorium"-Stengel believes in such "different, unique ways to take your existing menu and augment it a bit for the same price. When you build your stands, you've got to have the right items-whether name brands or the standards that theatres have come to be known for-and put a fun, new spin on it."

Do guests actually trust the quality at a movie theatre as opposed to a quick trip to the mall food court or a more leisurely visit to a restaurant? At Regal, franchises like Arby's, Baskin Robbins, Blimpie, Pizza Hut, Sbarro's and Taco Bell "did very well." Reviewing various quick-service restaurant options that were offered over the years-QSRs enjoy much success across Canada at Famous Players, Cineplex/Galaxy and Empire Theatres-Del Moro believes "as long as the branding was there," people expected the same quality. "When they see the offerings in the same kind of environment that they are used to, they have a definite comfort level." And, of course, "we had to operate them under the same guidance and restrictions of any other franchisee and with the same standards, operating philosophy and quality." While these operations were intentionally separated from the main concession stands, to induce additional spending, Del Moro nonetheless concluded "the amount of investment and return on investment was nowhere near what we can achieve in our mainline operations."

The advantages of actually having a real restaurant on-site become evident when you look at the success of Muvico Theaters' VIP balconies and Premier "full-service cosmopolitan restaurant and bar" concept in Maryland, Tennessee and across Florida (muvico.com). The sixth Showcase Cinema of National Amusements, Inc. (showcasecinemas.com) in Argentina is also the first to feature the circuit's U.S.-developed Chatter's concept. As part of the lobby, the exclusively branded restaurant and lounge serves hot food and sandwiches, coffee, drinks and spirits. The 3,400-seat 14-plex opened on June 1 and also houses two function rooms available for private rental for events such as birthday parties or group outings. "Showcase Cinemas Rosario is one of the most significant projects to take place in this country in the last five years," sums up Tad Jankowski, National Amusements' senior VP. "We are confident that it will benefit the community both on an economic level as well as providing a world-class entertainment experience."

The 24-hour nonstop Star Wars marathon at the Cinerama Dome (now 2K DLP Digital) and ArcLight Hollywood was nothing short of an intergalactic occurrence. The $348,350 engagement catapulted Pacific Theatres' superplex (arclightcinemas.com) to the number-one opening in North America, with almost $100,000 more than the still sensational second place for AMC Empire 25 in Manhattan (source: NielsenEDI/Variety). "Our café will be open," e-mail newsletters and the website advised well in advance, "serving munchies for the middle-of-the-night diehards and offering continental breakfast items for the get-there-before-work crowd. Our coffee cart will be going full-blast."

In addition to its "signature chicken sausage baguettes, hot dogs and critically acclaimed popcorn and caramel corn at the snack stands," the ArcLight Café offers a casual California bistro menu with full wait service at tables both outdoor and with lounge seating. Chicken black bean chili and half-pound certified Angus beef burgers not only feed hungry storm troopers but also regular folk and that special someone. On Mother's Day, for instance, ArcLight served up brunch with a "basket of breakfast breads and choice of fruit or salad," followed by "her pick of entrees including omelets, brioche French toast, a New York steak sandwich and sweet corn tamale with grilled shrimp in lobster cream sauce." Not to mention desserts and "free-flowing champagne," which will both be addressed in our next segment.

Dessert and Cordials: Cheers to Cinema!

Fully licensed, the upstairs area of the ArcLight Cinemas café (FJI May 2002) offers a complete bar menu "including a long list of specialty martinis," and, "for the first time in a California multiplex," any other choice of alcoholic beverage can be enjoyed inside the adjoining auditorium as well. The space is used for private parties, serves the needs of corporate clients and has given room to another more recent innovation of shows that are restricted to guests age 21 and over. "If you decide to join us," arclightcinemas.com notes about providing legal proof of age, "at the hostess desk at the upstairs Balcony Bar...you will receive admission identification."

While these "21+ screenings" are scheduled Friday to Sunday evenings in Hollywood, at Brewvies in downtown Salt Lake City, Utah, it's as much about the brew as it is about the view. Alamo Drafthouse Cinema (FJI June 2004) offers a similar concept as a national franchise opportunity. Every day, Brewvies pitchers go for less than $10; subrun movies cost $4, half of that before 5 p.m., with three pool tables available for 75 cents a game. "Our Sanctuary! Great movies, good beer," enthused one guest on Citysearch, while another called the concept "ingenious" and "reason to celebrate. The idea of beer and food casually consumed while watching a movie isn't odd except for the fact that you're not doing it at home but in an actual theatre!"

The café at the Italian villagio-themed Malco Paradiso in Memphis, TN (FJI June 2003), may not have full restaurant- or brew-style cooking, but the menu includes no-less-tantalizing items such as pasta salad and light foods, chicken tenders, fried mozzarella sticks and more. Malco's Etter describes it best as a "lounge area for people to sit down and relax, have a glass of wine or an import beer and the snack to go with it. That's the key. You can't serve an alcoholic beverage without an upgraded menu. We are actually licensed as a restaurant and have to submit a particular menu that fits."

About taking the alcohol inside, Etter cautions that the Malco Paradiso is a full-service multiplex with demographics of all ages. "We have to be careful. At the Paradiso, alcohol stays in the café." At their Studio on the Square on Memphis' lively Court Street, however, "where we only show art pictures for a demographic 21 to 45 years old, we do allow people to enjoy their drink during the film." It seems that the cozy café atmosphere that the Studio website promises, along with its wine and cappuccino bar, imported beers and expanded concession menu, are, in fact, the perfect match to "the Finest in Alternative Cinema."

"The trend will be towards providing places with a bar," said Rita Meno, director of concession and retail sales at Landmark Theatres in our March look at "Arthouse Appetite." "It's going to be huge for us, as it again supports the discerning customer base."

UGC Cineworld's Crispin Lilly agrees: "A lot of the growth in the U.K. has primarily been driven by the older, better-off demographics and they are the harder to push Coke and popcorn on. They love it, especially when they come out for big-event movies, but if you get them to come more regularly, they're actually a lot wearier about cost. Not that they can't afford it, but they're far more prudent and certainly more health-conscious." Bars, however, "have a very unique appeal to that group, absolutely." UGC's predecessor Virgin Cinemas, he recalls, "was the first of the large multiplex chains to really start approaching bars seriously. We introduced the premier-screen concept, something that caught on with a lot of competitors still, but that ended when UGC took over....I think there's a lot of mileage left in the idea of actually having your beer while watching the movie."

As Lilly knows that "bars are quite a complex operation in terms of legislation, etc., because of the value placed on them by large amounts of people, we can offer that level of focus and drive." Unlike the concession stand "where you've almost got a captive audience, in the bar area you are competing with five, six, seven pubs that are right at your doorstep. Customers have a choice, so you really do have to offer the entire range. Out of a group of people, you only need one who likes a certain drink that you don't offer and everybody will instead stop by at the bar next door." In addition to agreements for draft beers like Stella Artois and Boddingtons, and selling Lavazza coffee and espresso specialties, spirits, cocktails and mixes, "in our fridges we carry the top five beers, the top five Alco pops and juice drinks-regardless of who they are and where they come from. In the bar, you absolutely have to have that flexibility with brands. It is a very much more fickle, transient market to stay on top of with your selections. Not a month goes by, quite literally, without us delisting one product and launching another."

During peak times, the Emagine 18 complexes in Novi and Canton, MI, offer "wait service in our luxury seating area" that includes alcoholic beverages. Owner-operator Paul Glantz (emagine-entertainment.com) firmly believes that "product differentiation will play a significant factor in shaping our success in setting us apart from the competition. Our theatres are located in upscale suburban areas where consumers wish to be treated to a superior experience, and they have the means to pay for that quality service." The amenity package comes with a fee-based membership in the Shooters Club and, on top of the cocktails, includes the right to reserve seats, free valet parking, invitations to special screenings and members-only ticket and concession lines.

According to Joy Cooney, "the standout feature" at the café of the AFI Silver Theatre and Cultural Center in Silver Spring, MD (silver.afi.com, FJI June 2003) "is that our guests can take their wine and beer beverages inside the theatre along with the food." Asked if she is worried about the mess, Cooney replies, "Safety is our main concern, so we don't allow glass inside. Alcohol sales carry a heavy responsibility. Our patrons are very well-behaved," she laughs, "and we're trained to handle it. We have a very sophisticated rental and events program...for everything from product launches to meetings to birthdays and anniversaries." Draft and bottled beer are available-"whatever brand is popular, from Guinness to Corona"-along with a well-rounded selection of domestic and imported wines, such as chardonnay, pinot grigio and merlot. Brie and crackers complement a variety of hot foods such as personal pizzas including vegan and "giant" J&J Pretzels "stuffed with jalapeno and cream cheese, even pizza filling."

In addition to table and chair seating in the atrium lobby ("The café is most used for film discussion groups in several monthly programs"), the main historic theatre has a section in the back which features tables in between the seats. "There is a full coffee bar for espresso and cappuccino drinks, as well as a wide range of teas and specialties like Chai lattes." Cooney even carries Naked Juices. "They are locally bottled, very popular and trendy, healthy. We can't keep them in stock. People love them."

Clearly, it doesn't always have to be alcohol to freshen up the choice of beverages. At Vue Entertainment, "we're trying to tell people it's not just about popcorn and Coke, which is still great, of course," Steve Knibbs suggests. "But during another visit, you may want something completely different. We're trying to offer people a broad range of products, not just the standard that you've come to expect from the cinema."

In Chula Vista and El Centro, both in California, UltraStar enjoys success by offering Jamaica Olé! and Horchata, made with Hibiscus flowers and from milk and rice, respectively. Coming originally from Mexico, these products might be better known in the Hispanic marketplace. For VP concessions Kevin Stengel, however, "this supports our philosophy that if you cater to the area that you're building in, you'll have a winner every time." Knibbs found a fruit-based frozen drink called Bold Breeze that he likens to a frappuccino. "It's all based around fresh fruit, with no additives. I had one last night and I can still taste the mango. Absolutely fantastic and something that has not been done before at the cinema in the U.K." Since the middle of May available at the latest Vue in Harrow (Middlesex), "we have also introduced a new range of Hot Treats such as specialty coffees and chocolate drinks, as well as a new range of fresh ice-cream milkshakes." The soft-scoop ice cream called Dreme Crème is not only made on-site but is also brand-new to the U.K. market. UGC/Cineworld's Lilly also sees ice cream as "a very important offer that is going to be a real differentiator. There are an awful lot of people in the U.K. who still see a trip to the cinema as a big treat. So, ironically, the day when they actually come represents a big opportunity, as they might be prepared to spend extra money on things like a Häagen Dazs or Ben & Jerry's scoop."

From Scotland and in four flavors comes Mackie's Ice Cream to the easyCinema at The Point in Milton Keynes (easycinema.com). Since coming on board as chief executive officer, Charles Wesoky expanded the Low Cost Movie Theatres concept to include Low Cost Snacks. The easyCinema located at the mother of all modern U.K. multiplexes originally opened with signs proclaiming "No Rip-Off Popcorn," as owner-entrepreneur Stelios Haji-Ioannou wanted a no-frills approach (FJI July 2003). For Wesoky, having no snacks "just lost all the entertainment value of what people want when they go out to enjoy a movie." After lengthy discussion and analysis, during which "Stelios was convinced that he could maintain his trademark value proposition," audiences are now enjoying specially packaged easyCinema candy, 85-oz. popcorn and eight selections of bottled Coca-Cola drinks, Fanta frozen slushies and a Nacho Wave-all for only £1.00 [US$1.81, 1.48 euros]. At the latest addition to the lobby, which also houses a 16-station easyInternetCafé, patrons "can order an easyPizza prior to the movie to take home after the show."

Offering all items for the same price also helps with expediting sales. So much so that Wesoky proudly reports "an average hit rate of 63%. During school holiday periods we went as high as 77% and the lowest has been 52%."

Vue's Knibbs recognizes that "cinemas are an expensive environment to buy food-that's just how the economics of the business work. So Vue wants to make sure that what we offer is really good quality. If you go down the cheap and cheerful-or not so cheerful-route, you're inviting criticism. People want to experience better and better things when they go out. Cinema has to make sure to keep up and hopefully stay ahead of those expectations." When it comes to pricing, "obviously you don't want to have straightforward price comparisons and there are ways of avoiding them. We've sold Mars products for years and years and it has never been an issue, even though you can buy the same packaging at Woolworth and lots of other places. You can charge a premium, but you must not be too expensive. Every time I stop at a service station alongside the motorway in the U.K., I feel like cinemas are actually under-priced. Because [service stations] are really the benchmark for charging a captive audience a lot of money. It's incredible what they get away with."

In the end, pricing, quality and selection all come down to the customer. "It must be about the total moviegoing experience," summarizes Martek's Galloway, "and ensuring that your customers enjoy it enough to wish to repeat it in your theatre at a time quite soon. They have to feel happy about the whole experience in a way that presents no impediments to them spending money in addition to the basic ticket price. They need to perceive value and quality plus a host of other positives that will ensure that other offerings do not tempt them away, either to other operators or alternative leisure pursuits." Cheers to that!


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