SBJ/May 13-19, 2013/In Depth

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  • The everevolving menu

    Concessionaires continue to seek innovative ways to serve consumers at sports venues, but they do so with the familiar pressures on pricing. The successful strategy is one that balances that desire to improve the service and product mix while still paying close attention to price sensitivities. SportsBusiness Journal facilities writer Don Muret spoke with several leaders in the space about pricing, areas of their business that are experiencing growth, trends they’re watching, recent improvements they’ve made, and how they think the use of technology will evolve in their industry. The following are highlights of what they had to say:

    Where are you seeing growth in your company?




    MARTIN THORSON, Sodexo: Circuit of the Americas in Austin has been a great project for us. It’s not only built for F1 but to entertain all areas of the business. We do large catering and corporate hospitality, even in our media center, on a daily basis. There is every aspect of the industry at that venue, from the suites to the amphitheater to large event concessions and food courts. We opened with the equivalent of three Super Bowls; 265,000 attended the F1 race over three days. Just the size and scope of the 3.4-mile track and over 400 acres makes it a major venue.

    GREG FENDER, Centerplate: We have consistently shown growth over the last few years, weathered the economic storm pretty well. On the sports side, if you look at our [MLB] deals, we’ve been averaging 8 percent growth in revenue. In the NFL, we’ve averaged 5 percent growth. Despite in many venues not getting price increases, we’ve found creative ways to drive per caps and dollars spent.

    KEN YOUNG, Ovations Food Services: We picked up some new gaming operations in Phoenix and Green Bay. It took a while to completely understand the business but it’s been good for us. Every tribal community is different, so it’s certainly not cookie-cutter stuff. We do all forms of food service. One of the new ones we opened last year [includes] managing a hotel near Pocatello, Idaho. The other thing that’s so different is that you’re not necessarily going in there just to make money for the casino. What you’re really doing is going in to create a longer stay for the players, taking care of the VIPs. We do have a lot of complimentary things in there so it’s a different level of service than stadiums and arenas.

    MARC BRUNO, Aramark Sports and Entertainment: We have some great new partners [Cleveland Browns, Tampa Bay Buccaneers, New Jersey Devils]. In concessions, we’ve seen some nice growth as a result primarily of some of the programmatic elements that we’ve introduced in all leagues. We’re seeing slight to moderate growth in premium areas. We’ve got a general sense of fan spending being a little bit healthier than it was the past year. So when you add those all up, it’s promising for the future, particularly around the average fan and general economic trends that help this kind of business.

    DAN SMITH, Legends Hospitality: A recent deal was signing a lease at One World Observatory. We’re already in that business at Cowboys Stadium. Legends handles all the tour business … solicits groups and brings them to the stadium. We said, “Hey, here’s this iconic building in New York. Wouldn’t it be nice if we could use our skills and abilities to bring people worldwide into this building and give them a pleasurable experience?” It’s a total immersive experience in the history of building the [Freedom] Tower. We leased the top three floors and will operate a grab-and-go concept. Obviously there will be a big business for catered events, a cocktail lounge, merchandise outlets. We expect to open June 2015. It clearly positions us for what we call the attractions business.

    What trends are you watching?

    ALISON WEBER, Levy Restaurants: Certainly everybody is talking about what’s going on with big data — how do you learn more about your business and do something with it. For us it’s not about what the story was last night but what can the story line be in the next five years. That, in general, is going to be shaping the way we make food decisions, the way you make business decisions and service decisions. It’s really creating a different story line, doing something with it with enlightened information.

    THORSON: Everybody is looking for that “experience within the experience.” It’s no longer adequate to have a standard concession; you need a club atmosphere where people feel like they’re upgraded into a section with a different level of service … designed for the general admission attendee. It increases revenue and per caps because people get comfortable and want to interact rather than going up and getting one item, walking away and never returning. At Toyota Park, we enhanced the stadium club with small [portions] to make it affordable. Time and time again, they come back and buy. The consumer is too educated and wants an experience with everything they do at the venue and the teams are very vocal about creating that. They’re competing for every attendee, every dollar, and the return fan is a key piece for them.

    Sportservice has catered to the trend among younger patrons toward craft beers. This season the company debuted the Michigan Craft Beer stand at Comerica Park in Detroit.
    Photo by: Sportservice
    JOHN WENTZELL, Sportservice:
    I have two 20-something-year-old kids and [craft beers are] what they drink. It’s a trend of many of the younger demographic that are coming to our games and our events. That’s the type of beer they’re drinking outside the arena and the stadium. It’s not inexpensive compared to a domestic draft but there’s value to it for them and we have made a commitment. We debuted a craft beer operation, called Michigan Craft Beer, at Comerica Park in Detroit this season. It’s been terrific.

    FENDER: There was a craft cocktail we introduced at the Super Bowl [in New Orleans] called the Crown Royal Bayou Bootleg. We’re seeing a demand for more of that in our markets and are looking to introduce that concept into more of our venues, working with local mixologists with unique products. A lot of the trendy bars these days are featuring specialty cocktails. It’s not something we’ve traditionally done in our sporting environments. Our main bars get hit pretty hard at our peak times and we don’t want to put in too many of those items, but we’re looking to feature specialty ones that we can do very well and do quickly and give some signature items for the account.

    YOUNG: In spring training at Salt River Fields in Scottsdale, we had a stand set up with just beers of Colorado and Arizona with the Rockies and Diamondbacks there. If you compare the location with last year’s regular brands, it was up 15 to 20 percent.

    What improvements and upgrades have you made?

    LARRY WITTENBERG, Sportservice: We have a new concept called Tako Korean BBQ in Baltimore, a Korean beefsteak taco. Every year we hold a food and beverage summit in Buffalo and all of our subsidiaries and culinary people attend. We solicit creative ideas from the field in a competition-based format. They create the look, menu, uniform, design and the products. This [item] was the winner last year in our competition and we took that concept at Sportservice and put it into [Camden Yards] and it’s actually doing double the amount of business [the old stand] did the prior year.

    FENDER: What we’re focusing on this year is wine. As a percentage of our total sales, it’s about 3 percent, but there is
    A new Korean BBQ concept at Camden Yards in Baltimore came from a competition Sportservice held at its annual food and beverage summit.
    Photo by: Sportservice
    ever-increasing demand for high-quality wines. We have specialty wine carts but we haven’t been able to find a way to get these upgraded wines to the masses. We worked with Fetzer this offseason to create an option we’re using with baseball and the NFL. It’s a great package and we’ll see if we can drive that number. The way it’s packaged is going to allow us to put it in concession stands where we can pair it up with beer portables. We don’t need to create a separate location to feature the item. The price is $8 to $12. Six ounces. One of the complaints we hear an awful lot of, if they want a specialty wine, they have to seek it out. People want a quick fix and this product will be readily available.

    SMITH: At Cowboys Stadium we’re looking to see how we can add some more premium amenities. We have a vast footprint and a lot more upscale amenities and are looking more along the lines of sit-down restaurants. There are two main clubs and we are looking at an evolution of giving the fans that already have the premium amenities one more choice of a food offering. The good news is when they built the stadium we had the kitchens positioned adjacent to those rooms so it’s not a big expense to convert those to more upscale offerings.

    In Yankee Stadium we completely renovated spaces because the fans wanted a different environment. In the Jim Beam Suite right behind home plate … people felt confined because it was off the concourse and didn’t have a view to the field. They wanted to be outdoors so we expanded the footprint and created an outdoor lounge with cocktail bars and a sushi bar … even people not seated in the section want to be there — we have had tons of inquiries on how to upgrade their seats. They want an affordable premium amenity and are willing to buy up for it.

    ANDY SHIPE, Aramark: Pat LaFrieda’s filet mignon steak sandwich was a very popular item at Citi Field last year. Now we have expanded it to the Delta Club, which is now a premium offering. Changed up that concept a little bit from a white tablecloth into more of a look and feel of the items that he offers. Down at Turner Field, we have the H&F burger, a local phenomenon, and have seen some very high units sold. Then the extension with [local chef] Bryan Caswell at Minute Maid Park. One of the things we looked at is how do we re-create a hospitality environment partnering with chefs like that with new menu items across concessions as well as premium areas.

    Sensitivity over pricing is always an issue. How are you dealing with it with your clients?

    FENDER: For the last few years it’s been a challenge to get price increases. Many of our venues have held pricing. There’s been a little bit more flexibility this year. Certainly clients are being price conscious but our venues are thinking about it where they haven’t in the past.

    YOUNG: There is a lot of pressure on pricing, especially with [wholesale] beer [costs] going up every year significantly. You look at it and say something’s gotta give. You’ve got to work with your client. Obviously our costs go up. Either it has to get passed along or you rework an agreement some way so that you’re not serving $18 beers. There are ways around it. It comes down to saying, “OK, at what point are we hurting the overall experience?” We’re getting much more into the overall experience of the fan; it’s not just food service. How do we combine that potential all-inclusive with a ticket and what we do, and do we reduce that price a little bit to make that experience a little bit better for the fan? That’s really an important part of where I see the industry going.


    BRUNO:
    Pricing is always going to be an issue beyond food and beverage in the sports world. There’s a lot of talk about what it costs to attend a game, and food and retail plays a big role in that. Part of what we’re trying to do is to continue to work with teams to unlock the value that extends to food and beverage or utilizing it as a driver of creating additional value for the fans. Look, you can’t just raise prices year in and year out and expect people to continue to pay for that. You have to do it in the right way, continue to do it in a fashion … in conjunction with the teams to make sure that the pricing strategy works for the overall value equation for the park.

    SMITH: If you go into stadiums and buy a hot dog, you often compare that to a fast-food experience. But if you go into Yankee Stadium and look at some of the offerings, like the [$16] dry-aged steak sandwich, you are comparing the price point to a restaurant entree and there’s absolutely no sensitivity. You’re taking a guy out of a line that would spend X amount on a hot dog and complain about the price and you’re putting him in a line where he spends three times as much and walks away totally satisfied, thinking it was a great value proposition. We’re looking to get the fans to make the choice to migrate up based on more quality offerings. Every year we’ve enjoyed per capita increases because fans buy more.

    As far as technology goes, mobile ordering at sports facilities still seems to be hit and miss. Where does it stand with your company?

    FENDER: We’ve tried many of the systems out there with the mobile apps … but we’re just not seeing huge utilization. It’s as low as 2 to 3 percent. I’m not sure if it’s the nature of the venue where there are natural breaks in the game and you want to get up and stretch your legs and see what grabs you when you walk up to the stands. I still see it as a trend for the future. We’re working with the 49ers’ new building and, absolutely, tech is a major focus there. That building is designed to have the most flexibility to handle mobile ordering.

    YOUNG: Part of it has to do with what the public wants, and in some cases I think we’re five years ahead of the curve, and I say that as an industry. You get a few events that in-seat service is important but, for the most part, people still prefer to get up and get their food and drink. The more use something like that has, the more we probably need to change our operations around a little bit, because you need places to prep and pick up. There might be more with texting you can do. We’ve certainly tried that but it hasn’t taken off.

    BRUNO: While we have elements of mobile ordering pretty much across all our venues in one way, shape or form, we’ve seen the adoption rates pretty low from customers. That doesn’t mean it doesn’t work or isn’t attractive. I think it’s just a matter of time before it continues to evolve in a way that it plays a bigger role in the game-day experience with food and beverage.

    SMITH: I think the foundation is there and it’s here to stay. Delivery methods will improve over the next few years. The problem with those systems, the way they are designed today, is the adoption rate and fan usage. As smartphones become more sophisticated, you’re going to see the deployment of different types of technology overtake the technology in place today. When you walk up to a cash register, that system is going to know Dan Smith is within five feet and he likes this … it’s going to know all of my preferences and the transaction is going to be concluded without you taking anything out of your pocket. We’re starting to see that now.

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  • Concessionaire snapshots

    Aramark Sports and Entertainment
    Headquarters: Philadelphia
    Recent wins: Soldier Field (Chicago); FirstEnergy Stadium (Cleveland, premium only); Prudential Center (Newark, including merchandise); Raymond James Stadium (Tampa, including retail).
    Other: 11 MLB, 11 NFL and 12 NBA/NHL accounts; approximately 20 major college sports venues, including Dean E. Smith Center (University of North Carolina) and Bobby Bowden Field at Doak S. Campbell Stadium (Florida State); approximately two dozen minor league venues, including JetBlue Park (Boston Red Sox spring training facility, Fort Myers, Fla.)

    Centerplate
    Headquarters: Stamford, Conn.
    Recent wins: San Francisco 49ers’ new stadium in Santa Clara, Calif., scheduled to open in August 2014; Notre Dame Stadium
    Other: Nine NFL, three MLB and three MLS accounts; about 20 major college sports venues, including four SEC football stadiums; approximately 18 minor league venues including Durham (N.C.) Bulls Athletic Park; numerous horse racetracks including Aqueduct and Saratoga.
    Note: Centerplate officials completed a management-led buyout of the concessionaire in late 2012 in a partnership with investment firm Olympus Partners. The transaction was valued at $551 million. In April of this year, Centerplate acquired The Lindley Group, a leading U.K. sports caterer that has deals at 300 venues.

    Delaware North Cos. Sportservice
    Headquarters: Buffalo
    Recent wins: CenturyLink Field (Seattle); Lambeau Field (Green Bay); Singapore Sports Hub (scheduled to open next summer); extended contract with Melbourne Sports and Entertainment Precinct, the multisports venue that is home to the Australian Open and other events.
    Other: 10 MLB, eight NFL and six NHL deals; owns and operates the Boston Bruins and the team’s arena, TD Garden; holds food service contracts at approximately 10 minor league venues.

    Legends Hospitality
    Headquarters: New York
    Recent wins: FedEx Field (Landover, Md., suites only); FirstEnergy Stadium (Cleveland, merchandise only); Etihad Stadium, Manchester City.
    Other: Holds the food service contract at Yankee Stadium, Cowboys Stadium and FC Dallas Stadium; minor league ballparks in Camden, N.J., Lancaster, Pa., York, Pa., Scranton/Wilkes-Barre, Pa., and George M. Steinbrenner Field in Tampa.

    Levy Restaurants
    U.S. headquarters: Chicago (owned by U.K.-based Compass Group)
    Recent wins: BBVA Compass Stadium (Houston); Rose Garden (Portland); Ohio State sports facilities, Columbus; The Hydro arena, scheduled to open this summer in Glasgow, Scotland.
    Other: 23 NBA, seven MLB, five NFL accounts; Speedway Motorsports’ nine racetracks, including Charlotte, Las Vegas and Fort Worth; Billie Jean King National Tennis Center; Churchill Downs; several European venues including Stamford Bridge (Chelsea FC); operates in a handful of college and minor league facilities.

    Ovations Food Services
    Headquarters: Lutz, Fla.
    Recent wins: New BB&T Ballpark scheduled to open next spring as home to the Class AAA Charlotte Knights; XL Center and Rentschler Field (Hartford); and PPL Center, an arena under construction in Allentown, Pa., scheduled to open in Fall 2014.
    Other: Holds the food service contract at PPL Park (Chester, Pa.) and operates general concessions at EverBank Field (Jacksonville); about a dozen college sports venues, including Jones AT&T Stadium (Texas Tech); and approximately 30 minor league venues.

    Savor
    Headquarters: West Conshohocken, Pa.
    Recent wins: Pinnacle Bank Arena, Lincoln, Neb., opening in September; First Direct Arena, Leeds, U.K., opening in July.
    Other: The division of SMG holds contracts for Chesapeake Energy Arena (Oklahoma City), BOK Center (Tulsa) and Nassau Veterans Memorial Coliseum (Long Island), more than two dozen minor league sports venues, and a handful of European arenas.

    Sodexo
    U.S. headquarters: Gaithersburg, Md. (Global headquarters is in the Paris suburb of Issy-les-Moulineaux, France)
    Recent wins: Circuit of the Americas, Austin, Texas; Meadowlands (N.J.) Racetrack.
    Other: Holds the food service contract at Columbus Crew Stadium in Ohio and Toyota Park near Chicago; more than 100 major college sports venues, including Rose Bowl Stadium, Donald W. Reynolds Razorback Stadium (Arkansas); and 10 minor league venues.

    Note: As of May 6, 2013
    Source: SportsBusiness Journal research


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  • Chefs continue to spice things up

    Editor's note: This story is revised from the print edition.

    Sports concession deals with celebrity chefs are hotter than ever as teams, vendors and fans recognize the upgraded quality and brand recognition those deals bring to stadiums and arenas.

    The trend dates to 2000 when Levy Restaurants became one of the first sports food providers to get into that space, signing a deal with Wolfgang Puck to serve his line of gourmet pizzas in the suites at Dodger Stadium.

    Fast forward to 2013 and most big league food vendors across North America have deals in place with celebrity chefs to improve the fan experience and boost sales for a team’s second-most important revenue stream behind ticket sales.

    In general, fans drive the trend with increased expectations for how food should taste at sports events, according to concessionaires. In addition, the immense popularity of food shows on television has brought greater awareness to chefs and their signature recipes.

    Chef Andrew Zimmern (above) opened a portable cart at Target Field in Minnesota that sells his custom goat-and-lamb butter burger.
    Photo by: The Brooks Group
    “As food in general has become so mainstream in pop culture and part of the everyday experience of a community, we’ve seen this great opportunity to connect the fan experience to these chefs,” said Carl Mittleman, an Aramark regional vice president.

    Colleges are also embracing the trend. Last year, Fort Worth chef Tim Love, an “Iron Chef” winner on TV, signed a partnership with Sodexo to serve food in regular concessions and suites at TCU’s Amon G. Carter Stadium, which completed a $164 million renovation in 2012.

    “You saw this customized food program with chefs in small numbers 20 years ago when a local product would be featured at a ballpark,” said Andrew Zimmern, host of The Travel Channel’s “Bizarre Foods” show. “Now you can’t go to any sports venue without finding them.”

    Add Zimmern to the list. This season, Zimmern, a Minnesota resident, Twins season-ticket holder and a self-described “sports geek” who visits stadiums all over the world as part of his food show, opened a portable cart on the main concourse along the third-base line at Target Field that sells his custom goat-and-lamb butter burger. The meat is blended by New York butcher and food show personality Pat LaFrieda, Zimmern’s friend who has his own deals with Aramark, including a new chop house concept at Citi Field, home of the Mets.

    In Minneapolis, the AZ Canteen, a revenue share deal with Delaware North Sportservice, Target Field’s food provider, is an extension of Zimmern’s branded food truck that debuted at the 2012 Minnesota State Fair and now travels the streets of the Twin Cities.

    The partnership was driven in large part by the Twins and Sportservice. They both reached out to Zimmern on more than one occasion over the past few years to see if he was interested in doing something concessions-wise at the park, said Twins President Dave St. Peter. They both knew of Zimmern’s general distaste for sports food, which he has made known through his Twitter account. After striking out in 2012, Sportservice reached an agreement for Zimmern to put his mark on a menu already heavy on local flavors.

    “I was firmly convinced you could do really good food at a ballpark,” he said. “I think most of the offerings, not just at

    Target Field, but all over the country, are garbage foods and it doesn’t have to be that way. I was convinced as well that people would be happy to do whatever they could to access food like that.”

    To date, Sportservice, operator of the AZ Canteen, is selling about 200 burgers a game, a number St. Peter believes all parties involved can improve upon with more promotions as they continue to push the brand. The burger sells for $13 and got a thumbs-up from local food critics.

    “There is an entertainment element with Andrew Zimmern and his brand, which brings value from the client side to the fan,” said Larry Wittenberg, Sportservice’s chief operating officer. “It has to be Andrew’s flair, which means it has to be a little bit different. It is still a burger, not some crazy item. Fans want hamburgers and hot dogs, French fries, peanuts and popcorn. That’s still the main element of our business.”

    Keeping it simple is key for celebrity chefs as they bring fresh ideas to concessions menus. They recognize the challenges that traditional food vendors face in feeding tens of thousands of people within a three-hour window compared with the leisurely pace of a restaurant setting.

    “We’re not re-creating the wheel with the things we’re putting in stadiums,” said Bryan Caswell, a Houston chef and restaurateur in his third year of working with Aramark and the Astros at Minute Maid Park. “We’re trying to do things that are simple, tasty, fast and quick and make sense in the ballpark. I tell people all the time, I don’t know anywhere else where food is so ingrained in our nation’s mind historically as it is with baseball. They talk about peanuts and Cracker Jack in the song and we have to be careful not to tread on that history.”

    Caswell, showcasing his new Caz Grill burger concept in Houston, has seen his ballpark business double the first two seasons between concessions and suite catering. In concessions alone, his operation has grown from two small kiosks to four concession stands this year. Aramark has a professional services and consulting agreement with Caswell and pays him a fee in lieu of a revenue share, Mittleman said.

    Aramark initially contacted Caswell about doing a stadium deal a few years ago when Drayton McLane owned the team. Caswell, a lifelong Astros fan who attended Nolan Ryan’s fifth no-hitter in 1981, jumped on the idea. Recognized by the same orange Astros hat he’s worn since high school, Caswell can be seen high-fiving fans as he walks through the park.
    Running three restaurants in town, Caswell makes it to about 20 games a year but has staff members, who work with Aramark to ensure quality control, making regular visits to the park.

    This year, Aramark folded Caswell’s catering side into a new entity called Houston Astros Hospitality Group, part of the vendor’s effort to upgrade ballpark food under new team owner Jim Crane.

    “The focus on Bryan’s signature items is starting to change the food service experience at Minute Maid Park,” said Astros President George Postolos. “We can see the change in conversations with customers and in our surveys and focus groups.”

    Across Texas, Love, operator of steakhouses in the Dallas-Fort Worth Metroplex, saw an opportunity to get into the sports food business at TCU as part of the stadium’s renovation. After attending the first meeting where he was the little guy in the room with officials from Aramark, Legends Hospitality and Ovations Food Services, among others, Love teamed with Sodexo to submit a joint bid for the business. Sodexo already had the school’s campus dining deal, and together, they won a multiyear contract starting last year at the upgraded facility.

    “The first game was a little rough,” Love said. “The only elevator we had broke and we had to push all the food up the ramps. We lost electricity to a lot of places. From that point on, it got better and better. I enjoyed it and it’s been a great new challenge for me.”

    Love would not get into the details of his agreement with Sodexo but he did say he has more skin in the game than other celebrity chefs whose deals are tied to the vendors operating their branded food stands. His company runs the suites exclusively and helps Sodexo develop concession items such as the Big 12 Burger made with beef brisket and tenderloin.

    “The trend has been around for awhile but I think the hybrid that Sodexo and I have formed is much different,” Love said. “I’m actually there cooking; we’re not just handing out recipes. That’s not how we operate. It’s a vested interest, and we feel there is an opportunity to grow.”

    The Twins also see room for expanding the AZ Canteen concept at Target Field, especially with the ballpark playing host to the 2014 MLB All-Star Game, where they can leverage Zimmern’s national profile, St. Peter said. Zimmern is also targeting other markets.

    “Whether it’s the three to four [sports facilities] here or nationally, we’re aggressively looking for partners to take this concept out,” Zimmern said. “We’ve had incredible reaction from fans and the price point works.”


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