Twenty-two steps: That’s how far concession workers had to carry a container of chips last season to reach the only nacho cheese dispenser at one large food stand inside University of Phoenix Stadium.
It was a problem, to be sure, because the long walk slowed service, causing lines at the stand. But it was the kind of problem the Arizona Cardinals were accustomed to letting their concessionaire solve.
Not anymore, because now the Cardinals are their concessionaire. The organization’s Rojo Hospitality, its new in-house food company, took over the food service at the stadium in August. The contract is for two years with a series of one-year options, said Tom Sadler, president and CEO of the Arizona Sports and Tourism Authority, the stadium’s owner.
The decision to go in-house puts the Cardinals outside the norm in the NFL — they’re one of only three teams running their own food operations — but they found some compelling reasons to spend the money to develop Rojo Hospitality as well as Rojo Events, which will take responsibility for developing more events inside and outside the stadium. “Rojo” means “red” in Spanish.
ARIZONA CARDINALSThe Cardinals began operating food service at
University of Phoenix Stadium this season through
their Rojo Hospitality unit, which brought in
expertise from around the industry.
Ron Minegar, the club’s executive vice president and chief operating officer, would not disclose the exact investment, but he did confirm it is in the millions.
It began with a call from the Cardinals’ landlord. The recession has put the squeeze on hotel and rental car taxes, which the authority relies on to pay debt on the $455 million facility, and the group reached out to the Cardinals to see how their tenant might be able to help.
Team officials first talked to the authority about launching a food service firm in early 2009, when the Cardinals were in Florida for the Super Bowl. When the authority sought bids for food at the stadium, the Cardinals answered with Rojo and a commitment to provide the authority with $750,000 in extra revenue a year, starting with the 2010 season, to help shore up the group’s finances. When the contract was awarded in summer 2009, the team’s promise of additional cash helped it beat out traditional concessionaires Aramark and Centerplate, the incumbent.
“That was kind of the tipping point,” Sadler said. “We thought Rojo would put together a team of folks that could keep our service level where we need it and continue to drive revenues through our food and beverage contract, while at the same time supplementing the authority with additional revenue by thinking outside the box and utilizing their relationships with folks here in the community.”
But Rojo was more than a project to help the authority. The club conducts its own focus groups and had a strong sense of what its fans wanted from the food operation. The team has seen its guest satisfaction levels grow dramatically since the stadium opened in 2006, but the team was always searching to improve the game-day experience, Minegar said.
“This just seemed like an opportunity to — at the same time we’re having to address [the authority’s] economic issues — take a look at what could we do to further enhance the operation and grow those fan satisfaction levels higher for all customers,” he said. “Those were the two primary drivers.”
By continuing to upgrade the food experience for Cardinal Nation, the team should ultimately generate more revenue on top of improving guest satisfaction, Minegar said.
“Fans vote with their pocketbooks,” he said, “and with one regular-season game under our belts, we were way ahead on per caps.”
Running your own food operation in the NFL is no picnic. The Cardinals, New England Patriots and Dallas Cowboys are the only clubs among the 32 in the league that now do it. The Carolina Panthers went back to using a third party this season after running things in-house since 1998 (see story, Page 13).
A tremendous investment in time and money is required to get into the food business, but it’s the limited number of events at most NFL stadiums that leads clubs to hire a specialist, said industry consultant Chris Bigelow.
Those clubs that do go in-house with food see control and flexibility as the greatest benefits, said Bigelow, whom the authority hired to help select the best deal for the group.
“The ones that do it are the ones saying, ‘We need to use the stadium more often and make it more like an arena-type thing as far as number of events, and we want to control it,’” he said.
Cowboys Stadium is home to as many college football games and other events as NFL games, and food plays a critical role. Legends Hospitality, a Cowboys’ joint venture with the New York Yankees, operates food and retail at the stadium, including a 16,000-square-foot team store, extending its reach to virtually everyone coming through the door.
“I think what teams are coming to realize is that nobody touches the fans more than the food and beverage operator,” said Dan Smith, Legends’ chief operating officer. “There is more contact with those individuals than any other in-stadium service, and with the self-op model, the team maintains control over all aspects of that service.”
The Patriots enjoy maintaining control over price and quality and they can change menus on the fly without having to go through an extra layer of approval, said Jim Nolan, Gillette Stadium’s vice president of operations.
New England, for example, signed a deal with Davio’s, a restaurant at Patriot Place, the retail and entertainment district next to the stadium and controlled by the Patriots. Gillette Stadium’s food crew cooks and serves Davio’s signature Philly cheesesteak rolls in the general seating bowl.
ARIZONA CARDINALSRojo is responding to focus groups’ wishes with
soda cups that can be refilled for $1.
“Subcontractors have their own marching orders,” Nolan said. “The idea is we can implement these things with no red tape. There are things we can do to drive value and ultimately put a better product out there to the consumer.”
Rojo, responding to the Cardinals’ focus groups, reduced prices this season for beer, hot dogs, nachos and soft drinks, and is offering $1 refills for souvenir cup sodas and large tubs of popcorn. Providing greater value during the recession was one thing fans told the Cardinals they wanted to see, Minegar said.
A third-party concessionaire most likely would have pushed back, knowing it has to absorb the cost of goods and labor in addition to sharing revenue with the team, Smith said.
“If the team wants to do various promotions under the self-op model that help drive ticket revenues, it’s easier done when you have control over all that rather than go to a third party whose objectives are not aligned with yours,” he said.
Overall, Rojo’s goal is to boost food and drink per caps by 7 percent to 10 percent this season after those numbers were stagnant the past two years, in large part because of the economic downturn, Minegar said.
Rojo may be a rookie in the sports food world, but it’s full of veterans who know their way around the majors. The team hired 12 executives with a combined 180 years of experience. General manager Ken Wilson held the same position for eight years at Qualcomm Stadium in San Diego.
The Cardinals initially hired Wilson as a consultant in 2009 to observe what could be done to further improve food service at University of Phoenix Stadium. It was during that period he noticed fan congestion at the nacho cheese stand, Minegar said. (Rojo has since added more cheese dispensers.)
In addition, concessions manager Mike Stevenson, catering manager Denise Dewald, premium services manager Robert Valdez and human resources manager Jody Finzer all had worked for Centerplate at University of Phoenix Stadium since its opening.
Rojo’s assistant general manager, Greg Freed, and executive chef, Jason Choate, came from Aramark and had ties to Jobing.com Arena, across the street from the Cardinals’ stadium.
“I know some folks were concerned early on that Rojo itself didn’t have any venue experience, but it’s never really about the entity itself. It’s more about who are the people you’re bringing in to run it,” Minegar said.
All told, 1,124 people are employed by Rojo on NFL game days, a number that includes many of the same nonprofit representatives working Cardinals games the past four seasons, Minegar said.
On the events side, Rojo is working with stadium manager Global Spectrum to create more events in the club lounges and meeting rooms inside the building and outside in the parking lots and on the Great Lawn, the eight-acre patch of grass the Cardinals control through their lease with the authority. A microbrew, music and food fest on tap for December at the stadium is one new Rojo-planned event.
“We have some bandwidth down here in terms of sales and marketing and broadcast platforms and the property we own,” Minegar said.
There will be hiccups along the way, Minegar said, and he was right. Technical glitches during the Cardinals’ second home preseason game had some fans’ bank accounts charged twice as concession workers kept trying to scan their debit cards, according to local reports. But the early returns indicate Rojo is headed in the right direction, Minegar said.
“It doesn’t matter whether it’s people coming to our games, soccer matches, the Fiesta Bowl or the BCS national championship game, we are absolutely motivated to do it right,” he said.
