Falcons to slash some food, drink prices at new stadium
The Atlanta Falcons’ ownership group is driving a new concessions model at Mercedes-Benz Stadium that will draw attention from across professional sports, dropping prices to as low as $2 for food and drink.
AMB Sports & Entertainment, parent company of the Falcons and expansion MLS club Atlanta United, has created a value menu program as an extension of Fan First, an initiative to improve the fan experience. The menu covers more than a dozen items that will be served at concession stands on public concourses and most premium club spaces at the $1.4 billion stadium, scheduled to open in June 2017.
It’s a bold move for the organization but one that team officials think is needed in pro sports, where high-priced concessions have historically been a sore spot among fans.
Fan First is part of the organization’s strategy, a directive from Falcons and United owner Arthur Blank to reimagine how fans consume an event, whether it’s an NFL game, an MLS match or a special event at Mercedes-Benz Stadium.
“We need to make sure that when our fans leave the stadium, they have an experience that matches the incredible feeling of the stadium itself,” Blank said. “A big part of it is food. It’s called ‘street pricing.’ You won’t have to pay more inside the stadium than you do outside the stadium. Seventy-five to 80 percent of the [food] dollars that flow from the building will be priced like the items you see at a convenience store.”
Many big league teams have temporarily reduced prices during tough economic times, as well as given discounts for early birds and season-ticket holders. Other teams and concessions firms target specific menu items. Last season, for example, vendors for seven NFL teams offered $5 beers, according to data compiled by Team Marketing Report. At the Georgia Dome, a Levy Restaurants account along with the new stadium, the vendor sold bottomless popcorn and soft drinks for $7 apiece at 2015 Falcons home games.
Levy will charge $2 for a standard-size hot dog, $3 for a slice of pizza and $5 for a cheeseburger. A chicken finger basket with fries costs $6. For Coca-Cola products, Levy will offer free refills for small ($2) and large ($4) drink cups (see chart).
Rich McKay, the Falcons’ president and CEO, said a family of four shouldn’t have to think twice about stopping to eat before the game when they can feed everyone for $30 at the stadium.
Local restaurants serving their signature dishes as part of the concessions mix will match menu prices to those at their establishments, McKay said. AMB Sports has not yet disclosed those partnerships.
“When we compete to host the College Football Playoff, SEC championship, Final Four and Super Bowl, we put in those bids that for those events, these prices will remain intact,” he said. “Their customers are our customers. This is part of the building … for all people that come to the stadium.”
Mercedes-Benz Stadium will play host to the 2018 CFP title game and the 2020 Final Four. It has a 10-year deal in place for the SEC championship.
“The Final Four and SEC are always concerned that the venue operators are going to increase prices,” McKay said. “What we’ve told them is no, we’re not going to increase prices for parking or concessions.”
For the Super Bowl, the host stadium’s concessionaire typically works in tandem with the NFL to establish pricing for concessions, sources said, which often runs higher than during the regular season. McKay deferred further comment until after the owners’ vote.
Concessions is high on the list of things that NFL fans want teams to improve. As part of AMB Sports’ research on stadium development, officials took note of the NFL’s annual Voice of the Fan survey. Over the past several years, cumulative results show food service, including pricing, as the No. 1 complaint and the third-highest factor defining the fan experience.
“Across the league, that’s pretty much the same song you hear … it’s their biggest complaint and certainly for us it has been,” McKay said. “So that drove us back to Arthur to think about how could we relook at this. It changed how we interviewed concessionaires about economic models as we talked to them about what our hopes and aspirations were for the entire program. It led us to where we are now.”
Those discussions resulted in Levy signing a management fee to run the food at Mercedes-Benz Stadium, which effectively minimizes the vendor’s overall investment and reduces its financial risk from selling food and drink at reduced prices. The Falcons are paying for food service equipment, McKay said, typically a seven-figure investment.
It’s a more favorable agreement for Levy, which does not have to be as concerned about pricing as it would be under a split-revenue model, where it would share a percentage of sales with AMB Sports, food consultant Chris Bigelow said.
It was not clear how prices would be affected in the Falcons’ last season at the Georgia Dome this year.
Still, AMB Sports officials recognize they’re potentially leaving money on the table through the Fan First program, but Blank and McKay feel that by dropping prices they’ll make up the difference in volume by improving quality and value.
Bigelow questions whether that will be the case. “Reducing prices and selling more food … it’s been everybody’s theory for years, but nobody’s proven it to be true,” he said. “Year 2 is when we’ll find out if it sticks.”
Time will tell, Blank agreed, but the economics is secondary to doing the right thing, he said.
Said McKay: “We looked at this differently, through the fan’s eyes. In this instance, it’s not appropriate what’s gone on, in our minds, from a pricing and quality standpoint. This is an area where we can make a difference, so we should.”