Determining what the fan wants is all about analytics in today’s sports and entertainment food service industry.
What used to be instinct and intuition is now data-driven and the key is interpreting that data correctly.
Legends, the newest player in the concessions industry in North America, uses two outside firms to help with the process. Dan Smith, president, Legends Hospitality, enlists IDEO, based in California, and The Word Doctors, a Frank Luntz company.
IDEO is a design innovation company and helps Legends with packaging. “It’s all centered around the research they do. They will tell you a fan walking into your venue turns left as opposed to right and they’ll tell you why. They study those processes,” Smith said.
At Cowboys Stadium in Dallas, Luntz told them the fans wanted more barbecue. They had barbecue, of course, but now it’s front and center, with a giant smoker in the parking lot and 10 stands serving barbecue as opposed to the four they started with. Where they have utilized analytics, sales increase anywhere from 20-60 percent, Smith said.
Delaware North Sportservice started using Turnkey to do customer research five years ago. Barry Freilicher, DNC VP business development, noted there are even more measurement tools going into 2013 and analytics will play a big role in determining what people want, what they are buying and how fast it’s being sold, shaping the service delivery model. It’s comparable to what Billy Beane did for baseball, applying metrics to decisions about play on the field.
The environment now offers more nimble and real-time data. Going into the new year, Sportservice is moving to the clouds, Freilicher added. “All of our servers and systems will be cloud-based,” he predicted, which makes it easier to integrate information. That has been a barrier in the industry – getting analytics and data to the clients on a real-time basis. The process is being beta tested in DNC’s airport division.
One vision in the longterm is using tablets with drawers as the cash register at every concessions stand, Freilicher said.
Centerplate has introduced handheld tablets at every concessions stand at the stadium at the University of South Carolina, Columbia, and increased sales 30 percent because they are serving fans faster at a fraction of the cost.
It all comes down to a different way of thinking about the business, said Des Hague, CEO, Centerplate. His firm is looking at what hotels, airlines and credit card companies are doing to employ more analytics of fan behavior and differentiate themselves in what is really the hospitality industry. “I don’t want to look at how we serve a hot dog or sandwich. I want to be respected by other phenomenal organizations outside our space. I want to bring in learnings from premium hotels, airlines, and car manufacturers.”
Hotels are measuring service all the way down to how quickly a bell person should greet a car on the sidewalk. “We look to create that level of service in our business,” added Bob Pascal, Centerplate chief marketing officer.
“What is important to a guest is pretty universal,” Hague said. “One thing you cannot get back that you need the most of is time. At an event, I have to get my food when I need my food. It’s really understanding the components of our consumer at a much more intimate level.”
But like several others, he cautioned that “just because I’m better connected doesn’t mean it’s a better experience for the fan. There are things we will have to weave out and weave in to drive the experience.”
In-seat ordering, for example, has a very slow adoption rate in stadiums. Centerplate and Aramark, both shifted that option into high gear by applying it to exhibitors at trade shows, who cannot leave their booths and immediately adapted to ordering online.
Especially for large public shows, a lot of exhibitors are looking for that,” said Marc Bruno, president, Aramark Sports & Entertainment. “We’ve been doing that for the past 12 months or so — it’s not system-wide yet. Some shows want it, some don’t, but it’s one way mobile can enhance their experience, that’s what it’s about.”
Every concessions company executive interviewed was bullish on business in 2013. Growth has come in new business, increased per caps and acquisitions. Most mentioned an attraction, like a museum or zoo, as a focus on the new business front.
Centerplate acquired the U.K.-based Lindley Group this year. In four years under Hague’s leadership, it has made two major acquisitions, the first being Boston Culinary Group. The company now has 300 accounts and is growing on average almost 10 percent a year, Hague said.
Ovations Food Services is probably one of the most diversified companies. Ken Young, president, said they serve 17 casinos, 40 stadiums and arenas; 18 convention centers, 10 fairgrounds, five racetracks, a number of performing arts centers and, now, they have a zoo.
The Lowery Park Zoo in Tampa is local business for the Florida firm, but it’s also nice business. “We’re looking closer at zoos,” Young said. “It can be some good business.”
SMG’s Savor added is the Miami Science Center, a 250,000-sq.-ft. facility on the Embarcadero in downtown South Beach. “The special event business will be a big attraction there,” said Shaun Beard, SVP, Savor. The firm also added the USS Iowa in San Pedro, Calif.
Culinaire picked up the Bush Presidential Center on the campus of Southern Methodist University in Dallas, which opened April 25. David Wood, director of marketing, said the center is expected to draw 500,000 a year the first two years and level off at 300,000 on the low side. It’s a $2-million piece of business for Culinaire.
Legends has added management of One World Observatory in New York City, which opens in 2015. Smith said it’s anticipated to draw 3.5 million tourists annually and Legends is managing the attraction, from food and merchandise to ticketing to marketing.
“It’s a transformative account for the company,” he said. “We definitely plan on growing our attractions business.”
The attractions business enhances the traditional sport and entertainment business for these firms, which reported good business going into 2013. Seven home games into the baseball season, per caps were up 20 percent at some ballparks for Ovations, Young said, and that’s occurred in some not-so-great weather.
“I think it’s a combination of menu and size selection, without significant price increases,” Young said. “Portions are big because that’s what people want.”
Analytics have shown Aramark what people want and have led to bundling items and limiting choices to speed service. Bruno noted: “If 83 percent of the people who come to this stand are getting a hot dog, beer and pretzel, maybe just serve those items?”
It isn’t always that extreme, but Aramark has been tailoring menus to 10 items, not 20, where it makes sense and then applying new menu board strategies to further drive service.
“We’ve found we can impact a customer’s purchase decision 87 percent of the time based on how we promote and use the center panels on a menu board,” Bruno said. For example, if the photo in the center of the board is promoting that hot dog, fountain drink and pretzel, people come up to the cashier and say, “I’ll take that.”
Culinary innovation is the other driver Bruno singled out. Aramark works extensively with celebrity chefs and local restaurants to give people authentic, local fare at the park. It started back in the 90s at Oriole Park in Baltimore, but the public has a much higher and more discriminatory taste today.
In the past three or four years, Aramark has expanded its partnerships. “The beauty of working with celebrity chefs and restaurant groups locally is they have the pulse of the trends in that locality. It’s not just a brand, it evolves… We usually see at least 20-25 percent growth and in some cases we’ve doubled sales on the same footprint [with celebrity chef partners].”
From customer research, Legends has determined the fan wants a quality menu offering, Smith said. Price is only one part of the value proposition. Legends added dry aged beef sandwiches at Yankee Stadium in 2009. This year, trepidatiously, they added a second outlet, and per caps were up 30 percent.
“The price we pay is high, so the margin is low but, at the end of the day, we make more money selling dry aged steak sandwiches than we do on the hot dogs and the fan is happier,” Smith said.
Delaware North Sportservice introduced Boomstick, a two-foot hot dog at the Texas Rangers ballpark, Freilicher said. Fans spent $1 million on those two-foot hot dogs. It helped that DNC marketed them extensively with eating contests and promotions. “It became a brand.”
The focus today in concessions stands is not stainless steel and shiny equipment, Smith said. “We’re going more toward a marketplace look to the stand where the focus is on looking at ingredients and knowing where the ingredients are coming from. That’s what we’ve learned through our customer research.”
Interviewed for this story: Dan Smith, (862) 902-5451; Barry Freilicher, (716) 858-5000; Des Hague and Bob Pascal, (203) 975-5900; Marc Bruno, (215) 238-3000; Ken Young, (813) 948-6900; Shaun Beard, (610) 729-7916; David Wood, (214) 754-1880