A funny thing happened when the Falcons slashed concession prices this season
One of the most common and unpleasant aspects of the stadium experience is paying the kinds of concession prices that make movie theaters look like the dollar store. We’ve gotten used to $6 hot dogs and $10 cups of warm beer that could barely hold a can of Bud Light.
The Atlanta Falcons bucked that conventional wisdom this season at their new stadium, and a funny thing happened when they treated their fans as honored guests rather than walking suckers who only existed to be gouged for as much money as possible.
The Falcons actually made more money from concessions than they had under the previous pricing regime, ESPN’s Darren Rovell reports.
Prices were cut in half at Mercedes-Benz Stadium compared with those at the Georgia Dome. By all accounts, it looked like the team was leaving possibly millions of dollars on the table.
Except fans actually spent 16 percent more.
Which, doing a little back of the envelope math, suggests that fans bought 2.32 times as much food and drink as they had before.
The old saying “Make less on every sale then make it up in volume” was in full effect.
Steve Cannon, CEO of the AMB Group, the company set up by Falcons owner Arthur Blank to manage his business operations, gave those financial figures to ESPN, and he had a glowing opinion of his company’s decision.
“There’s a huge value in delighting your fan base, to make them as happy as they could possibly be,” Cannon said. “We started with one of the biggest pain points and it paid off.”
They call it “Fan First Menu Pricing,” where for just two bucks, fans could get a bottle of water, a hot dog, a pretzel or the coup de grace, an unlimited amount of a beverage so popular that Atlanta denizens use the term the way “soda” or “pop” is used elsewhere.
That’s right, the Coke machines are out in self-serve, free-refill style at the stadium the way they are at any fast food joint.
On top of that, for fans willing to open their wallets and spend a scandalous three whole dollars, they could get a slice of pizza, some nachos or waffle fries.
Here's a small snapshot of some of the concessions at the new Mercedes Benz Stadium Home of the Atlanta Falcons. Here's an owner with brains pic.twitter.com/IbH8zFRgvf
— jw (@jwpepper1) October 19, 2017
The Falcons also introduced 65 additional points of sale and 1,264 more beer taps than there were at the Georgia Dome, and those prices included all local sales taxes to expedite transactions by leaving coins out of it, making the giving of change easy.
The Falcons, unsurprisingly, ranked No. 1 in the NFL’s internal survey of food quality, price-to-value ratio, speed of service and variety.
"Our Fan-First approach to improving value, variety, speed of service and quality of service is our way of saying thank you to Atlanta for your passion and commitment to our teams"
– Arthur Blank || An Open Letter to Our Atlanta Sports Fans#MBStadium https://t.co/pWzSmDsGD3 pic.twitter.com/DmY42vpHBk
— Mercedes-Benz Stadium (@MBStadium) January 26, 2018
As if that weren’t great on its own, Cannon also noted a follow-on effect: With reasonable prices for food and drink, fans were coming through the stadium doors earlier; 6,000 more fans walked in two hours before the game, which meant more time for them to buy food and drink — and less of them rushing the concession stands during breaks in the game, their appetites satiated long before.
Cannon also sees this as having an upward pressure effect on ticket sales: Make the games more affordable for more fans, and you’ll have more of them coming in the gate instead of watching the game on TV.
Which may not be a problem these days with the Falcons as a frequent playoff team, but if they end up back in the doldrums of their 18-30 three-year run between 2013 and 2015, they’ll have a bunch of goodwill with fans as they rebuild toward the playoffs.
The rest of the league is certainly taking notice; when the Falcons announced their pricing model, beleaguered Seahawks fans, tired of paying the highway-robbery prices at CenturyLink Field, hoped for relief.
And the Falcons? They’d be happy to share the secret of their success with Seattle and every other team in the league.
Cannon, speaking of his boss, said, “Arthur wants other teams to do this. We are an open playbook. We’re happy to show anybody how we’ve done it.”
Part of it is that AMB Group owns the concessions and has a greater ability to control pricing as a result; it farms out the management to Levy, which then runs the game day operations.
Other teams may have to renegotiate contracts with big companies like Aramark, and some of them might not be able to do so until those contracts run up for renewal several years down the line. After all, concession companies tend to be willing to accept lower sales counts in exchange for higher margins; they have no dog in the fight as far as the overall fan experience goes since they don’t see a cut of the gate.
But Rome wasn’t built in a day. One by one, NFL teams — and teams in every sport — will be able to look toward the Falcons model, which oh by the way also saw an 88 percent increase in merchandise sales, and apply it to their own fans.
As business ideas go, this one’s a winner, and the numbers are in to prove it.
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