Film Journal January 2018

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CONCESSIONS TRENDS VALUE PROPOSITIONS Sizing Up Refillable Popcorn Tubs and Drink Cups by Larry Etter, Concessions Editor In an era of expanding concession items, heartier menus remain one of the biggest challenges to convincing theatre patrons that concession snacks are a good value. One means of creating a value proposition is offering refillable vessels. Some cinemas chains have toyed with the idea of creating a value proposition of annual refillable vessels, such as popcorn tubs. Purchase the large bucket for a higher price and receive unlimited refills for the remaining calendar year. The question is: How do theatre operators make this work? Is the aim to build higher per-capita sales? Is the aim to create a loyalty program that invites patrons back to the concession stand for added value? Is the promotion aimed at making the consumer visit the concession stand working? All of these considerations lead to the concept of value proposition. “I will spend more today, but my total concession purchases for the extended period of a year will be less” is the predominant viewpoint of the participants in these programs. Many theatre owners offer a refillable vessel, whether it be for beverages or popcorn, as an incentive to buy into the snack options at the concession stand. Nearly all proprietors that use this system tend to add the combo effect to this application. The overall intent is to meet or exceed customers’ expectations about the theatre experience. Some theatre circuits have implemented the ultimate value system by promoting the “annual popcorn tub purchase.” The customer is able to buy a popcorn tub at a higher price than a large popcorn and they get refills at a huge discount for the remaining visits thoughout the year. Example: Purchase the 170-oz. large plastic vessel for $20 and get it refilled on any return visit for $2. In comparison, a typical 170-oz. tub might sell for $8 on a single visit. The patron may see the first purchase as “sticker shock,” yet they believe that as a regular moviegoer and popcorn connoisseur this will make sense and make for a real savings with multiple visits to the theatre. Wally Helton, VP of merchandising and promotions for Cinemark USA, has extensive experience in this arena of value offerings and is considered by his peers an expert on the subject. “I started selling refillable popcorn containers and drink cups in 2000 at United Artists Theatre Circuit and have sold them at Cinemark since 2009,” he notes. “This was just an early version of a loyalty program. Once the guest buys the vessel at your theatre, they need to return to your theatre in order to use them. Then our guests enjoy a discounted price for the rest of the year.” This mechanism of refillable tubs serves a win/win proposition for guests and theatre operators. Neely Schiefelbein, VP of sales at Cinema Scene, reports that the success of the refillable tub has led to many more circuits employing this strategy. “We’ve seen many customers adopt the refillable tub concept. Some do it with 85-ounce or 130-ounce, while others use larger sizes like the 170-ounce and 190-ounce. While it’s been done in many different ways— standalone purchase, paired with combos, etc.—it’s proven successful at many circuits across the country. People like the idea of saving money on return visits. And loyal customers will buy into this type of promotion knowing they will be back to their favorite theatre with the incentive of a deal!” The theatre owner should proceed with caution, as there are outside complications to this promotion. First, after the initial sale of popcorn in what is typically a plastic tub, how sanitary is the vessel? Has the patron kept the tub in the trunk of their car and do they pull it out on their return visit to the theatre? Does the local health department require certain administration to insure sanitary conditions for repeat uses of the food vessels? While the idea of extra value by buying a refillable vessel has merit, is the theatre operator aware of the health risk that they will inherit when offering such promotions? In similar conditions, theatre owners are offering a collector cup for beverages. In many cases, these cups highlight a particular franchise film or even the company brand. These vessels are great— they commit the patron to the brand. Sometimes the drink vessel has a long-term refillable option—i.e., all-year refills at one dollar, or sometimes free refills on the day of purchase. Here is the issue: What if the patron buys the specialty drink cup on Tuesday, then returns on Saturday with the same cup and asks for a “free refill” when in fact he/she did not purchase anything that day on that visit? How does the concession cashier know the difference? That is why some suggest a limited-time-only “collector cup” selling out after 100 hours of operation; this way, the concessionaires know the vessel was not sold on that particular day. The other option that is emerging is the collectible popcorn tin. The graphics are incredible. The stability of a metal vessel is longer than the plastic competitor. The metal vessel also serves as a multi-use container for the purchaser after the consumption of the popcorn snack. Patrons can use the popcorn tins for their home use when popping microwave popcorn and watching TV sitcoms. The tins themselves are more expensive, yet theatre operators should understand this type of retail effect allows the movie lover to attach themselves to the franchise film. They can take ownership in the movie and it becomes a reminder of their movie experience, encouraging repeat visits to the cinema for more “take home” memories. Larry Etter is senior vice president at Malco Theatres and director of education at the National Association of Concessionaires. 12 FILMJOURNAL.COM / JANUARY <strong>2018</strong> 008-016.indd 12 12/19/17 4:10 PM
This month, we remember a legend of the concession industry, Frank Liberto. Frank passed away in early November from a lingering illness, and the concession industry lost “the King of Nachos.” Frank lived his life with zest and vigor. He was a great entrepreneur and a mentor to many of his colleagues and peers. Of Italian decent, he credited his father for his discipline and dedication to work. Everyone who met Frank has a story to tell, since he was always willing to give advice and consultation for the betterment of their lives. While his father, Enrico, and grandfather, Rosario, were the founders of the family business, Liberto Specialty Company, and gave him guidance and direction, no one could have taught Frank the devotion and keenness he had for the concession industry. Frank himself founded Ricos Products in 1977. He was a leader at NAC and served as a regional vice president of NAC for over 20 years, creating many a concession seminar and educational program for the people of Texas and the Southeast. He will always be remembered for wearing his yellow ascot cap with the red Ricos logo. Frank was a third-generation leader of Liberto Specialty Company. He is also credited with inventing concession nachos, which were unveiled at Texas Arlington Stadium in 1976. While the family business focused on distribution of food items and concession equipment, he had an entrepreneurial spirit that led him to add to the snack offerings at the concession stand. His first attempt was when he approached the stadium food and beverage manager at Arlington Baseball Stadium, suggesting he give nacho cheese with tortilla chips a chance. The manager was reluctant, but Frank would not take no for an answer and delivered 35 cases of canned cheese to the stadium anyway. Legend has it that the stadium sold all 35 cases in one day and the manager called Frank asking why he didn’t deliver more cases. Frank said he responded with an expletive, stating, “I told you it was a winner.” Nachos as we know them today were born from that “Never take no” attitude. That was Frank Liberto: strong, dogged and persistent until he got his way. “Our father, Frank Liberto was a man of integrity,” Ricos president and CEO Tony Liberto asserts. “He led our company with an entrepreneur spirit and a passion that had an impact on his employees, customers, business associates and friends.” Frank could hold an audience by telling stories and anecdotes about his early days in sales. He oftentimes had a raw way of discussing matters, but nevertheless you knew Frank was filled with ardor for the business. He was driven by a desire to succeed. A driving force of the National Association of Concessionaires, as president and board member, Frank never gave up on the idea of helping young prodigies in the industry. He often took the lead in creating educational forums that protected the integrity of the industry and assisted in networking efforts for young managers. He consistently sponsored NAC events, regional meetings and the national convention. He contributed countless dollars to offset the cost of scholastic programs. In 1997, he was awarded the Bert PEOPLE REMEMBERING FRANK LIBERTO A Look Back at the Life of ‘the King of Nachos’ Nathan Award by NAC, recognizing him for his contributions to the concession channel of business. He remains one of just three honorary lifetime board members at NAC. Liberto received many awards and accolades over the course of his life. He was charitable both at work and in the community. He was presented the 1988 Distinguished Alumni Award from St. Mary’s University and in 1994 was named one of the South Texas Entrepreneurs of the Year, while Ricos Products was named the Texas Family Business of the Year by the Hankamer School of Business at Baylor University. 2005 saw Ricos named a Top 20 private business in San Antonio, Texas by San Antonio Success magazine. Frank Liberto advocated for many local and national organizations in the fields of education, health and human services, the arts, the military and multiple political organizations as a donor and supporter. He served with the Knights of Columbus, the Oblate School of Theology and the Juvenile Diabetes Research Foundation, just to name a few. He truly gave back to society as much as society gave to him. Frank was the kind of guy you always wanted to meet, offering a huge smile, barrel laugh and great stories. If you worked for Frank, beware: He was driven, competitive and never accepted less than perfection. Yet nearly every person who was under his employ has gone on to excel in business. “Some of my fondest memories and lessons learned came from Frank Liberto,” states Charles Gomez, VP of specialty markets at Ricos. “Outside of my parents, he was the biggest influence in my life. He gave me a work home when I desperately needed one and was always supportive of my efforts. He was a pioneer in the concession industry and instilled in me the value of treating people well. Frank enjoyed life and we will all miss him.” Anita Watts Largent, an early hire in sales for Ricos, fondly recalls her relationship with Frank at Ricos and his personality that required everyone on his staff to have the same commitment and resolute attitude. “I was very lucky to work with Frank at the beginning of my career and he gave me an extraordinary opportunity to hang myself or fly, and I will always appreciate it. There were times when I could just strangle him, and other times when we would drink a scotch and I realized what an amazing life he had lived. In the end, we should all hope to have as much living in our story as Frank Liberto,” Anita recalls. The reality is that Frank Liberto treated everyone the same. He was not particular in his expectations, nor biased—he expected everyone to have the same dedication and devotion to the business, regardless of status, position or relationship. This is what made him a leader and a success. “That’s our Frank” was a common phrase among his peers. No one could deny his love for the concession business or his appreciation of what could be. Frank Liberto will always be remembered as the father of nachos, a global empire he built. Those of us who knew Frank intimately will remember him as a friend and symbol of the concession channel. A promoter, for better or worse, he loved his family, his business and his friends. —Larry Etter CONCESSIONS JANUARY <strong>2018</strong> / FILMJOURNAL.COM 13 008-016.indd 13 12/19/17 4:10 PM
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