Published November/December 2011 by Candy & Snack TODAY
Taking a new approach to merchandising at the movies, AMC Theatres’ George Patterson is working to put the focus on candy and snacks’ impulse appeal in the chain’s concession areas.
CANDY MAKES UP approximately 20 percent of the total product mix at concessions in AMC Entertainment, Inc.’s 357 domestic AMC Theatres locations, according to George Patterson, senior vice-president of food and beverage. And considering the mix includes popcorn, snacks, hot foods, soft drinks and even alcohol in some locations, sales of confectionery make a significant contribution to the overall bottom line. Because of this, he says the movie theater chain has been testing a new approach to merchandising for the past two years to focus more on products’ impulse appeal.
“We are redesigning our concession stands
so the guest can be in charge,” he tells Candy & Snack TODAY. “At new locations and remodels
we’re building today, consumers are able to
grab as much candy as they want, bring it to
the checkout area and pay for it. Previously, we
would reach under the counter and hand it to
the customer.”Straying from the traditional format, where theater boxes are displayed in glass cases and on menu boards, the company has introduced Marketplace, an upscale concession area concept. Designed for theaters with differing layouts, the revamped area allows consumers to walk through an open space and grab their own popcorn, food, beverages, and candy displayed at kiosks and on designated shelf space.
“Instead of a concessionaire or the film crew member doing everything during the transaction, the guest now has more control. We are beginning to see some benefits from that,” Patterson explains. “When the guest is in charge, they buy more candy.”
Patterson has been with the company for nearly two years, and has more than 30 years of restaurant industry experience, including positions with Burger King Corp., KFC Corp., Wendy’s International, Inc. and PepsiCo, Inc. At AMC, his primary responsibility is to drive revenue and profit growth by offering visitors first-rate food and beverage experiences. At this point, the company is still in the early stages of the concession strategy it is implementing, he says.
“It’s a large capital expenditure for us, so we have to make sure that we have it right,” he says, noting that within the next few years, the strategy is expected to affect nearly every concession area within the AMC family. Patterson reports to the executive vice-president of operations, and his team works with suppliers, the purchasing team, the marketing department, operations and chefs on developing ideas, implementation and a complete merchandising effort.
To accommodate the additional focus on candy, snacks and other edibles, the size of the department has doubled during the past two years. Establishing new business opportunities and “working with the best food and beverage team in the industry” is the most rewarding part of his job, he tells Candy & Snack TODAY. Among Patterson’s responsibilities are managing not only the concessions in regular cinema formats, but also dine-in theaters, which serve a full casual dining menu including alcohol. He works with chefs, suppliers and vendors to monitor the latest in food trends, visiting with up to 10 each month for product presentations.
Impulse Makes The Difference
When figuring out how to display candy effectively, Patterson says the impulse nature prevalent in retail merchandising is a major factor.
“There’s a reason you’re seeing more self-serve kiosks of food and beverages,” he says. “The impulse part of purchasing is huge. Look at grocery stores. You used to walk up, unload a cart, put all your items on a little conveyor, pay for it, then leave. Now, eight to 10 feet before you get to the cashier, you’re staring at magazines, candy and gum, and soft drinks.”
To that end, AMC is making more of an effort to merchandise its candy in front of consumers rather than merely displaying photos of available options on a board above the concessions counter. Digital menu boards, standees, sampling, social media and coupons also reach a variety of moviegoing consumers, according to Patterson. When guests arrive at a theater, he says, they’re focused on three things: the length of the line, whether they can sit where they want, and getting candy, popcorn or something to drink.
“If we can get the candy in front of them before they get to the popcorn and the drinks, we can get them to buy more candy,” he says. And those incremental sales add up, with more than 5,098 screens in the U.S. and Canada, the company hosts more than 200 million guests annually. Perfecting The Movie Candy Mix Concession counter offerings differ depending on the design, available space and the demographics, Patterson says. Further, the content of the movies that are shown has a major effect on who AMC Theatres’ customers are, and how much candy they buy, he explains. For example, he points out that attendees during the weekend of a Harry Potter movie release represent a different target demographic from that of a romantic comedy or animated film. Licensed combos with signage and packs that reflect the films can be effective, he says.
“Most everyone visits the movies at least a couple of times a year, because there is a movie that they want to see. The more family-friendly the movie, the more items people tend to purchase at the concession stand,” he says, adding candy consumers typically skew younger. To appeal to a wider variety of consumers, AMC is extending its better-for-you items, bringing more diverse and healthy food options into its product mix. For example, some locations now offer assorted nuts, dried fruit, granola and gluten-free snacks in addition to candy and hot food items.
The company also debuted Smart MovieSnacks packs, which contain PopCorners popped chips, Odwalla snack bars, Chiquita fruit chips and bottles of water. He says this attracts more middle-aged and older consumers. Still, he says, adults definitely buy candy, and mainstream candy items are top performers. “Anything that has chocolate on it is going to be successful,” he smiles, noting M&M’s and Hershey’s chocolate items do well. At the same time, he says: “Suppliers are constantly approaching us with new and innovative ideas.”
He explains candy is similar to the restaurant business in that it’s very important for manufacturers to be on the cutting edge of new technology, and in many cases new products receive significant marketing dollars. With that in mind, he adds: “If a movie studio comes to us and they want to launch a big series of movies and partner with a candy supplier, we will certainly entertain it.”
Generally, though, Patterson says both the purchasing and food and beverage teams select a core of between 13 and 20 candy items that appear in the company’s theaters across the U.S. Most items are available in two sizes, and an optional list of more candy items is available for locations that might want to offer different flavor profiles or brands. “If there are particular candies that do well in Southern California, for example, we give our GMs some flexibility with the optional list, which is updated twice a year,” he explains. Addressing the number of SKUs in AMC sets, he says the impulse nature of candy is not based on having huge variety, but instead on putting it in the right place. Candies in Marketplace sets take up fewer than 10 feet of space, but their impact is strong because they are featured in a prominent area, he explains. “A little less variety but more volume seems to please our suppliers,” he says. “They offer enticing rebates, better pricing, better distribution and promotional offers when we have more volume.”
However, in the new Marketplace sets, there is more candy than in a traditional concession stand. At these locations, Patterson says peg bags, premium chocolate bars and shelf-stable snack options provide consumers with additional variety. “We also have a more robust beverage program in Marketplace that candy complements,” he says, noting these sets also feature dark chocolate. When evaluating new items, the food and beverage team relies on consumer insights and research, industry trends, consumer feedback, assortment and innovation. He adds this is more effective than allowing every location to select its own candy mix because the chain places great emphasis on quality control, as well as maintaining the familiar atmosphere that consumers experience when they walk into an AMC Theatres cinema.
“When consumers go from one theater to another, they can expect consistency among the items we carry,” he says, noting four-ounce theater boxes at the chain carry a SRP of $3.50, while packs weighing between six and eight ounces have a SRP of $4.25.
Maintaining a consistent look is vital, he says, as is keeping the product mix relevant.
To stay on top of trends, the AMC team attends the SWEETS & SNACKS EXPO and other trade shows annually, and this year came back with a new chocolate item to add to its 2012 product mix. Product introductions, increased variety and brand extensions help drive trial and boost sales, he notes.
“Once you have laid the groundwork with the consumer, extensions and new flavors are a natural fit and in some cases expected. Just more of a good thing!”
