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Falcons Broke The Rules Of Stadium Food And It Paid Off


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https://www.bloomberg.com/news/articles/2018-01-25/atlanta-falcons-broke-the-rules-of-stadium-food-and-it-paid-off

 

When the Atlanta Falcons announced the food prices at their new $1.5 billion stadium -- $2 hot dogs and sodas, $3 nachos, $5 beer -- fans loved it, and people in other cities started pushing their local ownership groups to follow suit.

Falcons owner Arthur Blank had made a calculated bet that what the organization lost in markup, it would recoup in volume -- fans would come earlier, stay longer and buy enough food to make up the difference.

He was half-right. About 6,000 more fans per game entered the stadium earlier than they did in 2016, and in general, the venue sold as much food by the end of the first quarter of Falcons games as it did in full games in 2016. Fans also gave the Falcons the highest satisfaction rating in the NFL for food and beverages, up from No. 18 in 2016, and the highest rating for security satisfaction, in part the result of lines made shorter by all the early entries.

They also bought more food -- sales were up 53 percent -- and each fan spent, on average, 16 percent more on concessions. It wasn’t enough to offset the drop in prices, though. The team made less on concessions in 2017 than it did the year before, according Steve Cannon, chief executive officer of AMB Group, the company through which Blank owns the team.

“Sure, we could shake out a few more dollars of margin under the old model, but we believe that the direction we’ve taken, given all the other positive benefits, is the bigger revenue play, period,” Cannon said.

Atlanta’s pricing, part of a unique partnership with concessionaire Levy Restaurants, is a dramatic departure from standard prices in NFL stadiums. At $2, hot dogs at Falcons home games cost less than half the league average $5.19, according to the 2016 Team Marketing Report. The league’s average price for a beer was $7.38, with the San Francisco 49ers charging over $10.

While no other major sports franchise has replicated the plan, they are taking note. Cannon said “dozens” of team owners and venues have called asking for more details on the pricing strategy.

The team’s 2018 goal is to improve efficiency and expand the menu. Cannon said he believes that eventually, the Falcons’ food and beverage profit will eclipse its 2016 numbers. “This is just a first report card,” Cannon said. “And it says that we changed the dynamic inside of an industry that was fairly set in its ways, it’s having an amazing impact on our fans’ satisfaction, and, oh by the way, spending per person did go up. The system-wide impacts are great.”

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8 minutes ago, RiseUpFalcs said:

You probably weren't impressed when it cost you twice as much either. You are getting a decent burger and fries. Go to molly b's and pay if you want a better burger.

Game-changers has been good every time.  Love the COS. 

I tried one of the lower priced places the last game and got the hamburger combo.  Have no idea how much it was, but the quality of the food was average to below average for a stadium burger and fries.  Never tried Molly B's.  Not interested in a sit down restaurant while I'm at a sporting event.  

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I have never really had stadium food that was better than I could get somewhere else.

But, I remember ordering 2 hot dogs, 2 fries, 2 beers and paying 40 bucks.

I've only been to a concert at MBS, and we did get some food there.  cost half as much and the food was as good as the hot dogs and fries I had at the dome.

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3 hours ago, Sun Tzu 7 said:

Interesting.

So if they're charging half as much as they did before but sales increase by 53% then the margins are a little better.... unless they're paying less for the food/beer than they were before.

That's not accurate.  You are assuming a static reduction in their expenses to deliver that food.  Their costs per hotdog and people to serve it are static. 

Let's say it costs $1 to serve a hotdog, all costs blended, for ease of comparison.  At $5 per hotdog, they are making $4 in margin per hotdog.  At 1 million hotdogs sold, that's $5 million in revenue with $4 million in margin.  At $2 per hotdog, they are only making $1 in margin per hotdog, or half of their sale price.  If sales increased by 53%, that equates to $7.65 million in revenue, with half of that as $3.825 million in margin.  

A 53% increase in sales revenue does not necessarily offset the loss in margin.  Their margin rate and their overall margin went down.  Overall, that's a negligible price to pay for the highest food and beverage ratings in the entire league.  

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As one who attended Atlanta-Fulton County Stadium, I remember the menu,  roughly:

Hot Dog  $4

Super Dog  $6

Burger  $5

Nachos $4

Coke  $2.50

*16oz Budweiser Headache Draft  $4.00

*16oz Miller Lite Headache Draft   $4.00

Besides popcorn and peanuts, that was pretty much it.

 

So for me, seeing people complain about the food at ball games these days cracks me up.  lol  But I understand, most of y'all weren't around then.

 

*Served in a thin paper cup.  I s**t you not.

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46 minutes ago, octoslash said:

As one who attended Atlanta-Fulton County Stadium, I remember the menu,  roughly:

Hot Dog  $4

Super Dog  $6

Burger  $5

Nachos $4

Coke  $2.50

*16oz Budweiser Headache Draft  $4.00

*16oz Miller Lite Headache Draft   $4.00

Besides popcorn and peanuts, that was pretty much it.

 

So for me, seeing people complain about the food at ball games these days cracks me up.  lol  But I understand, most of y'all weren't around then.

 

*Served in a thin paper cup.  I s**t you not.

I remember the paper cups! 

I can say that the quality of food should at least be digestible. Not expecting much more

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16 hours ago, Ezekiel 25:17 said:

I remember the paper cups! 

I can say that the quality of food should at least be digestible. Not expecting much more

I used to visit my dad in Tampa, and occasionally would go to the Bucs games (he had season tix) at the Big Sombrero. 

Now those folks knew how to sell beer.  They would sell it in these huge, 30 oz tubs they called 'buckets', and then give you these tiny little Dixie cups, so people could share. 

My dad would always order a 'bucket', and when the concession girl asked 'How many cups do you need?' my dad would always say,  'Cups?  What for?'  lol

 

 

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