What Movie Theaters Are Learning From Restaurants

Sixty years ago, a peppy group of anthropomorphic junk food snacks sweetly held hands and took a rather bouncy stroll up the aisles of an old movie theater, singing “let’s all go to the lobby, to get ourselves a treat!” Little did they know (or perhaps they did) they were on the menu. Back then, popcorn and candy were bringing in lot of revenue for theaters, so exhibitors installed new counters and stations to present and sell them. The famous animation, now preserved by the Library of Congress in the National Film Registry, was commissioned to get customers to come by and check them out.

But just like the jingle, standard concession stands have become classic, but dated — a reality to which leaders at AMC Theatres, the largest movie exhibitor in the United States, are trying to adapt. “The exhibition industry has been popcorn, candy, and soda for 90 years,” says Nels Storm, senior director of culinary at AMC. And typical concessions are not enough to grab this generation’s attention. In the age of mobile devices, streaming, and on-demand movies, cinemas are not only competing with one another, they’re battling smartphones, home entertainment, and the Internet. One solution: lure customers with better food, and transform the traditional concession visit into something more upscale and restaurant-esque.

As interest in traditional cinema dwindles, evolution is imperative if theaters want to survive. According to data from the Motion Picture Association of America, despite an uptick in 2016, movie attendance among audiences under 40 has generally been in decline for at least the last five years. But there may be hope in food. At AMC, food and drink sales make up 30 percent of the company’s profits, and is increasing at a faster rate than ticket revenue, with higher margins. In response, the brand is trying to think less like a mere movie theater chain and more like a restaurant.

A push in this direction happened about nine years ago, with the introduction of the AMC Dine-In brand. Dine-In theaters double as restaurants, letting moviegoers order and eat fancy meals from their seats. It was an attempt to get into the dine-in theater business, by which smaller chains like Oregon-based McMenamins and Texas-based Alamo Drafthouse had made a name for themselves in some U.S. regions.

It was also the first time the company hired a full-time chef and culinary expert to carry the plan out, says Jennifer Douglass, the current VP of operations for the growing concept. “Eight years ago, we had one chef, and today we have four full-time chefs that all work on both sides of the culinary side of our business,” Douglass says.

But when Adam Aron, a former CEO and marketing executive for cruise ship companies, hotels, and resorts, took the helms at AMC in 2016, he wanted restaurant-style experiences in every AMC theater, and soon.

In April, the company announced it was upgrading its traditional concession snacks with “restaurant-quality” alternatives. Instead of the typical popcorn, nachos, and heated pizza, theaters are gearing to serve chicken and waffle sandwiches, sliders, and cheese plates with wine-infused salami. Popcorn will be upgraded to “gourmet” status featuring salted caramel, cheddar crunch, and mixed flavors. Pizzas will now be stone-fired flatbreads, and pretzels will be inflated to 1.5 pounds.

The planned menu upgrade is a separate initiative than AMC’s dine-in vertical. With more than 650 sites and thousands of screens, every AMC theater can’t become a part of the Dine-In brand. “Our joke is that it’s all the challenges of running a theater and all the challenges of running a restaurant,” Douglass says, “with none of the efficiencies of either.”

This gives the smaller guys a leg up in the dine-in market. Theater chains like Alamo Drafthouse and McMenamins that are built primarily around the concept manage much smaller portfolios, often isolated to specific regions. When Chicago-based Kerasotes Theatres sold almost all of its sites to AMC in 2010, the company, which had been in the cinema business since 1909, saw value in the dining concept and held onto its two Showplace Icon theaters, which feature intimate lounges, cocktails, and upscale dishes like Korean barbecue ribs and Caprese flatbread. The company still operates the sites, one in Chicago and one in Minnesota, along with only one other standard theater in New Jersey.

But even the small movie chain is not immune to changing moviegoer behavior. McMenamins opened its first theater pub in 1987 in Oregon, serving handcrafted beer and burgers to go with second-run films (movies that have already been shown in first-run cinemas). The food was a big draw. “We’ve always been more than popcorn and candy,” says Renee Ignacio, marketing director for McMenamins. But recently, the brand realized people could already stream many of the second-run shows McMenamins was screening.

“We now show first-run movies at five of our theaters,” Ignacio says. “The change to first-run movies really had to do with the changes of people’s habits and the ability for anyone to watch just about anything on their phone or tablet.”

Esra Erol

While the smaller food-first theaters try to survive the times by showing first-run movies, larger, first-run theaters, like AMC, are focusing on their menus. And while the chain is not overhauling it’s theaters by switching to a complete dine-in model, AMC’s menu revamp requires extensive changes — part of $700 million in total upgrades the company has planned for its theaters. Staff will have to be retrained and kitchens upgraded by Labor Day. All 400 theaters upgrading to the new menu will get new kitchen suites, where easy-to-use nacho cheese warmers, hot dog cookers, and popcorn machines will be upstaged by shiny, new fryers, ovens, and grills. Typically, employees working the concession station can easily grab customers’ orders quickly and individually, but the new equipment will possibly require a brigade system and assembly line to operate: Think of prep lines at McDonald’s or Subway.

“We’re operating more like a restaurant-style kitchen with a centralized space,” Storm says. “We’re doing some significant work in the space to accommodate it from an equipment standpoint as well as training our associates to think differently, think more like restaurant associates.” AMC is currently training employees in 27 locations as a beta test. From a customer standpoint, the ordering experience will be more or less the same, AMC reps say, but with new packaging and menu screens. Mobile ordering allowing audiences to order their snacks via their phones and pick them up at the concession stands is also expanding.

The fast-food workflow is new for AMC, but the company wouldn’t be the first major theater chain to think like a restaurant. About 50 percent of the 339 domestic Cinemark Theatres, the third-largest movie exhibitor in the United States, feature some sort of enhanced food option, says Phillip Couch, head of food and drinks at the company. In addition to operating 17 dine-in style theaters, the chain runs more than 40 Studio Eats concepts and branded cafes, aka spaces featuring separate dining areas and fast-food dishes. They’ve been in Cinemark theaters since 2000. On top of that, at least five theaters feature actual full-service restaurants, like the upcoming Cinemark Movie Bistro (formerly a Bogart’s Bar and Grille) at the chain’s Boca Raton location in Florida.

Similar to AMC, Cinemark also features upgraded menu items, but customized to each theater’s location. Cinemark guests in Florida may see mahi mahi on the menu, while folks in LA can find Baja-style fish tacos. It’s an attempt to evolve with consumers, Couch says.

“When you think about it, there are a lot of businesses that are no longer around because they failed to innovate and keep up with consumer trends,” Couch says. “So we’re just innovating and trying to give consumers what makes that movie-going experience that much better.”

But AMC will roll out its fast-food menu concept in almost every one of its traditional locations. And despite the grim reports about movie theater attendance, the chain reported better-than-expected revenue last quarter. The company’s culinary team has high hopes for how their plans will help theaters live on, even as changes and trends shake the industry.

“We wanted to think like a restaurant company,” Storm says, predicting more evolution in the concessions arena.” That’s exactly how restaurant companies think, just continuing to evolve and meet the guests’ needs and desires. The future is very bright, we’ll say.”

Vince Dixon is Eater’s data visualization reporter. Esra Erol is a social media manager at Eater.
Editor: Erin DeJesus