It’s the age-old question: Sell more volume at a lower price or less volume at a higher price?
Atlanta’s NFL and MLS clubs, both owned by AMB Group, believe they have the answer after their first year in Mercedes-Benz Stadium. They drastically slashed the cost for food-and-beverage items across the board — what they called “fan first” pricing — and the results were unmistakable. While prices went down 50 percent, average spending per fan increased 16 percent.
The NFL Falcons and MLS United lowered prices but made more revenue. The clubs did not share specific numbers, only percentages compared to 2016 in the Georgia Dome.
“Fans say food and beverage is important, but consistently you see F&B [survey] scores are the lowest,” said Mike Gomes, who left Disney three years ago to join AMB Group as senior vice president, fan experience. “Well, that seems like an opportunity. We can’t keep going back to the same old F&B model if it’s broken. And it is clearly broken.”
When the teams first announced their new approach to pricing they cited that food-and-beverage prices were too high for the quality delivered. The approach was met with questions — and plenty of skepticism — in the industry. But fan response and the financial numbers seemed to support the effort.
AMB Group released NFL and MLS “Voice of the Fan” F&B satisfaction data last week and the Falcons scored the highest in the NFL, up from No. 18 a season ago, while the first-year United was tops in MLS.
Both clubs credited their “fan first” pricing, which included $2 hot dogs, $2 bottled water, $3 nachos and $5 domestic beer, for the surge in fan satisfaction. Fans judged the Falcons and United, both of whom work with Levy Restaurants in Mercedes-Benz Stadium, on four key food-and-beverage categories — quality, price, speed of service and variety. The Falcons earned a score of 8.2 on a scale of 10 for F&B satisfaction, well above the NFL average of 6.2. The United’s score of 8.7, likewise, was easily ahead of the 6.7 MLS average.
“It’s just a resounding validation from our fans on how much they embrace this approach,” AMB Group CEO Steve Cannon said. “The fan experience is changing and we feel we’re on the front end of this.”
While Falcons’ attendance was about the same year over year, the amount of food sold in 2017 was up 53 percent. The Falcons sold as much food and beverage by the end of the first quarter this past season as they did during a full game in 2016.
Falcons President Rich McKay began working with team owner Arthur Blank on a novel approach to F&B more than three years ago when Mercedes-Benz Stadium was in the design phase. McKay had to make sure the stadium had the infrastructure to accommodate the higher volume of sales associated with lower pricing. The club expected $2 hot dogs to sell rapidly, but they couldn’t run out or have such long lines that the fan experience would be compromised.
Priority was placed on extra storage, additional cooking capacity, chefs at each stand and a Levy representative at each point of sale run by an outside nonprofit.
For the local Atlanta eateries to operate in the stadium, they had to make two commitments: The food would be just as high quality and priced the same as in their restaurants.
McKay also led the process of selecting a concessionaire. The Falcons interviewed six candidates and McKay’s commitment to lower prices caused a lot of heartburn. He said he was surprised by some of the tactics suggested to drive revenue, like dynamic pricing on F&B. For example, when lines got really long, prices would creep up on the LED menus, hopefully without the fans noticing.
McKay eventually found a partner in Levy that bought in to the revamped pricing strategy and commitment to fan engagement, which is generating buzz throughout Levy’s other partnerships.
“Everyone is really interested in what we’re doing here and what the impact is to the fan base,” said Tom Crocker, Levy’s vice president of hospitality and strategy in Atlanta.
AMB Group maintains control of the menu and pricing, as well as employee training. Levy acts as the day-to-day business manager.
“We not only set out to change the game, we changed the game,” Gomes said. “It’s a model that is sustainable and that fans love.”
