No matter what's on the silver screen, popcorn and soda are golden

Columbia News ServiceMarch 28, 2013 

Movie popcorn ILLUS.jpg

CHRIS WARE — cware@herald-leader.com

NEW YORK — Lights, camera, action, popcorn. Or so the classic movie formula has been for decades. But in the past couple of years, the balance has been weighing toward the latter, with concessions sales growing at a faster rate than ticket sales.

"Snack bar sales keep theaters open," said Andrew Smith, author of Popped Culture: A Social History of Popcorn in America. "Every movie theater knows that if they don't have a snack bar, they're not going to survive — so they've been beefing up their offerings."

Before 2006, annual income from ticket sales increased faster than concessions revenue, according to annual reports from the three biggest U.S. theater chains. Over the next few years, they battled for first place — but since 2011, concession sales have marched ahead. For example, concessions sales at AMC Loews jumped 6.9 percent last year, while admissions revenues increased by 4.7 percent. The previous year, ticket sales dropped almost 1 percent while snack sales climbed 2.7 percent.

Regal Entertainment, AMC Loews and Cinemark — which rely on concessions for one-quarter to one-third of their total income — all report that the average consumer now spends more on food and drink, up to 5 percent more in the past year alone, for two reasons: The food is pricier, and customers simply buy more food.

Marla Backer, an entertainment analyst at Hudson Square Research, links this shift to the recession. Over the past few years, she said, the restaurant industry has suffered as consumers cut down on spending.

"People still wanted to have a night out, but they didn't want to pay for a sit-down dining experience," the cost of which can swiftly rack up, she said. "That provided an opportunity for theaters to capture some of that cash that the consumer wasn't spending in restaurants."

Big-brand movie theaters swooped in to offer a cheaper twist on the traditional "dinner and a movie" experience and boost profits at the same time. The three leading cinema companies expanded concessions to include hot foods, from pizza to chicken tenders, and healthier snacks like dried fruit and nuts. Some theaters even started selling gourmet meals — without, of course, letting go of the holy trinity of popcorn, candy and soda.

This opportunity to jack up concession revenue is well timed; the recession cut into movie ticket sales, even as customers were willing to keep paying for high-priced snacks.

"Going to the movies is around $10, and there's a mental barrier there," said Chad Beynon, an entertainment analyst at Macquarie Research. "So theater owners will hold the ticket price at $10, and raise the price on concessions instead."

When consumers decide what to do with their evening, they compare the cost of just the movie ticket, not the concession, to that of alternatives, such as dinner in a restaurant, said Brian Wansink, author of Mindless Eating: Why We Eat More Than We Think. Once inside the theater, however, the consumer subconsciously wants to get the most out of the evening, so he or she buys from concessions as part of that investment, even though that cost wasn't calculated in the original equation.

Beynon likened this to how people think about vacations: Consumers try to save when choosing flights or hotels, but once on holiday, they're often willing to spend plenty at a better restaurant.

Plus, there's something ritualistic about snacks and cinemas. It's like turkey on Thanksgiving, said Wansink: The two are deeply intertwined in our minds from childhood. And of course it's hard to resist the smell of buttered popcorn wafting through the air.

American cinemas have long milked this strong association, using concessions to boost revenues during economic crises.

"Prior to the Great Depression, there were no snacks sold in cinemas," historian Andrew Smith said. When movie theaters started opening in the early 20th century, "they had gorgeous rugs and beautiful lobbies; they wanted to target the upper class. Popcorn was associated with burlesque theaters and the rowdiness that existed there."

Although popcorn and candies were sold outside theaters at street stalls, vendors weren't welcome inside. But when cinemas had to lower ticket prices during the Depression, they opened their own concession stands to make up for lost revenues. As now, foods like popcorn were far cheaper to procure than the movies themselves, and could be sold at far higher margins. These days, cinemas make about 90 percent profit on popcorn, and unlike ticket sales, none has to be shared with the film studios.

With DVDs, widescreen televisions and streaming services such as Netflix threatening to steal customers, movie theaters are once again turning to edible aids.

Cinebarre — part owned by Knoxville-based Regal Entertainment, the biggest movie theater chain in the country — has six cinemas across the country (the closest is in Asheville, N.C.) and plans to open three more this year. Cinebarre offers table service and hot food, snacks and alcoholic beverages. For example, its cinema in Charlotte, N.C., charges $6 for a ticket, $8 for a "When Harry Met Salad" and $6 for a "Donnie Daiquiri."

Cinebarre makes about 70 percent of its profits from food, said the company's chief executive, Terrell Braly.

Despite this concerted, and successful, effort to sell more innovative concessions, the most popular cinema snack is still that butter-flavor-drenched, salt-speckled golden oldie: popcorn.

Even Braly, the man behind Cinebarre's 6-year-old experiment, admits: "We sell extensive amounts of popcorn. It's just part of the psyche: Popcorn and filmed entertainment is synonymous."

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