Will Packers cut food prices like Falcons did?
Concessions at Mercedes-Benz Stadium see more sales, less profit, in trial’s first year
GREEN BAY – The Atlanta Falcons made headlines last season by offering food at unheard of low prices at the new Mercedes-Benz Stadium.
The Falcons said at season’s end that concession sales increased 53% with their “Fans First Menu Pricing” and fans on average spent 16% more than in 2016. The Falcons made a profit — there still were premium items on the menu, too — but not as much as the previous year.
Whether that’s the beginning of a trend remains to be seen. The Falcons say they’ve been contacted by a number of teams seeking information, but don’t expect a rush by the Green Bay Packers or other NFL teams to adopt that approach.
NFL teams are reluctant to leave money on the table, and equally reluctant to have other teams leave shared money on the table. Concessions income is among the revenue sources which NFL teams share with one another.
“The NFL and sports in general is an industry that often uses best practices,”
said Packers Public Affairs Director Aaron Popkey. “I think something like this will have teams take a look, along with other things that are examined each year.”
Popkey said the team aims to keep ticket prices just below average, while keeping the full cost of the game right at the average.
According to Team Marketing Report’s Fan Cost Index for 2016, the average cost of an NFL game is $502.84. That includes four average-price tickets, two small draft beers, four small soft drinks, four regular-size hot dogs, parking for one car and two adjustable caps.
The Packers ranked 14th out of 32 teams that year at $506.78.
Individually, the Packers were 13th in the league in 2016 for the price of beer ($8), 17th for soft drinks ($4.75) and third for hot dogs ($6). Eight other teams charge the same price for hot dogs. Beer and hot dogs were above the league average and soft drinks below.
Not all comparisons may be accurate because portion sizes vary by stadium.
Prices were about the same in 2017, Popkey said.
The Packers have what they call “value pricing” on some items, such as hot dogs, soft drinks, etc. Those items are available in about a dozen concession stands.
Lambeau Field has 575 points of sale (places to buy stuff) and 950 beer taps. Concessions stands, excluding mobile beer stands, have multiple points of sale.
Lower prices drew fans earlier
Atlanta’s pricing included bottles of water, popcorn, hot dogs, pretzels and unlimited Coca-Cola at $2; and waffle
“We look at what it costs to produce the items, pricing them in terms of where we would be across pro sports...We look at ticket price, concessions, parking. We look at the entire package. If you are heading to the game, what would it cost you on a typical game day?” Aaron Popkey Packers public affairs director
fries, pizza slices and nachos at $3. Prices included tax, which was among steps taken by the Falcons to speed transactions.
Other factors contributed to increased sales. Mercedes-Benz Stadium has 5,000 more seats than the Georgia Dome, which it replaced. The new stadium has 65% more places to buy stuff, at 673, and 1,264 more beer taps. It also has self-serve soda dispensers.
More places to buy means shorter, faster lines, which encourage fans to buy more before and during games.
Atlanta claims that because of the lower food prices, up to 6,000 people entered the stadium earlier than in past years, which also increased sales.
The Falcons were not entirely altruistic. According to a report by Yahoo Finance, personal seat licenses helped offset the cost.
Falcons representatives did not return a phone call seeking more information.
“Certainly that sent a shockwave through the industry when Atlanta decided to (lower food prices),” said Brad Foytik, vice president of PMI Entertainment Group, which manages the Resch Center in Ashwaubenon. “They have opportunities to make that up on many other things.”
Concessions contracts vary
Atlanta also has an unusual agreement with Levy Restaurants, which is contracted to operate concessions stands, but nothing more. The Falcons take on all the risk, supplying food, equipment and staff, and reaping the profit.
In most venues, the concessionaire is responsible for all aspects of the operation and teams use different models to get revenue. At Lambeau Field, Delaware North Sportservice handles concessions and the Packers get a share of the profits. The Packers set prices in collaboration with Delaware North.
“We look at what it costs to produce the items, pricing them in terms of where we would be across pro sports,” Popkey said. “We look at ticket price, concessions, parking. We look at the entire package. If you are heading to the game, what would it cost you on a typical game day?”
Setting concession prices is not simply a matter of cost plus the profit you want to make.
“Some facilities will claim there is a science behind it. It’s probably not as scientific as some think,” PMI’s Foytik said.
PMI’s starting point for setting prices is to find out what others around the Resch are charging as well as what products cost them. A general rule in the industry is to charge three times the cost, he said.
Concessions are among the top profit-generators for the company.
Like the Falcons, PMI controls all revenue streams at its events, so it has more flexibility than if it was paying a separate concessionaire.
Teams in other professional sports might follow Atlanta’s lead, even if most of the NFL teams do not. The Falcons say they got the idea from The Masters golf tournament in Augusta, Ga.
Atlanta is playing the long game. It believes that happier fans will come to games on a regular basis, which will attract more spending by sponsors. According to the Falcons, they were No. 1 in an internal league survey on food quality, price-value ratio, speed of service and variety.
Whether those changes are sustainable will be more apparent after a second season with lower prices.