About a dozen items, including hot dogs and pretzels, are “street priced” at
Atlanta's Mercedes-Benz Stadium for every event in the building. (Getty Images)
The halo board and petal-like retractable roof generated buzz during the opening of Mercedes-Benz Stadium in downtown Atlanta last year, but so did a much more down-to-earth development: the nation’s first “fan-first” concession pricing.
The NFL’s Atlanta Falcons and Major League Soccer’s Atlanta United FC touted the model as a way to ease fans’ pain over concessions prices, offering more than a dozen items at what they called street pricing. The move was a hit in Atlanta — and not just at the new stadium — but it hasn’t yet created a national trend. Is the pricing model confined to the ATL, or have concession contracts simply encumbered the model’s growth?
In Mercedes-Benz Stadium, the pricing — about a dozen items at $5 or less, including $2 hot dogs and pretzels, $3 nachos and $5 cheeseburgers — occurs for every event in the building, from a Falcons game to the College Football Playoff championship game to the coming Super Bowl, and it has boosted both the Falcons and United to the top of their respective leagues’ food and beverage experience survey. Along with a drastic rise in fan satisfaction — from 18th in the NFL in food and beverage experience to first — the stadium also saw transactions rise 30 percent in 2017 versus 2016 in the Georgia Dome.
“We’ve seen almost 10 percent of our fans arriving earlier to games or matches and their spending increased by 16 percent,” said Greg Beadles, executive vice president and chief operating officer for AMB Sports + Entertainment, the firm operating the stadium for Falcons’ owner Arthur Blank. Levy runs concessions at the stadium.
Mercedes-Benz Stadium had the value concessions menu in place when it opened in 2017. (Getty Images)
“Fans appreciate the value proposition and quality being offered with our new food and beverage program, and it’s been great to see more families able to come to the stadium and enjoy themselves with the same prices they would pay outside the venue,” he said.
The model worked for the Falcons, so Atlanta’s State Farm Arena, the renovated home of the NBA’s Hawks, followed suit this year.
“Imitation is the sincerest form of flattery,” said Thad Sheely, chief operating officer of the Hawks and State Farm Arena. “When building a ($1.5 billion) building they spent a lot of time and effort rethinking every element of a fan’s experience at a game. Their pricing really did start a trend and set a benchmark for expectations in Atlanta.”
At the same time, Sheely said a renewed focus on operations, especially with a handful of former Disney executives in the fold, put customer experience at the forefront. “Two primary issues that were always the pain point for our fans were wireless connectivity and food,” he said. “It is not just cut your prices and let complaints go away, but you need to improve quality and improve the customer experience.”
In the Hawks’ first game of the regular season in October, Sheely said, volume was up 80 percent over last year’s home opener. “The early stats are great,” he said. “Not just in the fan-first pricing. It is really in the overall food and beverage experience.”
With a dozen items fitting the model, Sheely said, the pricing is a change in perspective. “Just because they are a captive audience, you don’t have the license to serve them anything less than a great-quality value meal,” he said. “We want to be a great night out for a cross-section of fans. You can’t be closed-minded that your customers are customers because they already bought a ticket. You want to be able to provide them a great option in quality and value.”
With the downtown Atlanta professional sports teams on board, is the trend just for Atlanta? NFL stadiums in Baltimore, Tennessee and Detroit and Oriole Park at Camden Yards in Baltimore have made similar moves, all starting some form of fan-friendly pricing, even if only for season-ticket members.
Mike Plutino, founder of the Food Service Matters consultancy, said he expects many other teams will follow the model as they go through their concessions contract renewal process, but not at amphitheaters or clubs that rely heavily on high food and beverage margins.
“It is already having an impact in several locations within our portfolio,” he said. “Clients with virtually every team we speak to are wanting to learn more about the potential impacts to their organization. Many teams are handcuffed by short-sighted, high-commission concession deals that have limited their editorial control over one of the most important aspects of their fan experience, second only to their team product. Other teams are simply not willing to consider a new way of doing business.”
Plutino said the Mercedes-Benz Stadium model has clearly demonstrated that fans will spend more with lower pricing and it “appears to be one of the surest and fastest way to accelerate fan satisfaction.”
Sheely said the most misunderstood aspect of food and beverage is the extent to which it is a fixed-cost business, with staffing being a high percentage of the cost. By figuring out how to efficiently manage the fixed cost, Sheely said, the model works. To make it happen in State Farm Arena, the Hawks rebuilt every concession stand to give the team the ability to handle the extra volume. “You have to understand those challenge and know what you are getting into,” he said.
The Hawks worked with concessionaire Levy to restructure their deal as a management fee and used the firm’s E15 analytics arm to find the right price, menu items and locations in order to “actually provide value to fans.”
Sheely noted that the changes come with some fan learning too. Not every item across the menu has a low price. The Hawks have 12 items under $5, but they also have Antico Pizza, Old Lady Gang crab cake sandwiches and plenty of other more expensive specialty items.
“We listened to our fans and they told us that they cared about food quality, prices, variety and speed of service,” AMB’s Beadles said. “So, we went about creating a new model that addressed all of these areas holistically, and that has been the key to our success.”
While the Falcons and the Hawks have led the effort — Sheely said there is a sense of “Southern hospitality” to Atlanta leading the way — and relatively few have followed thus far, will resistance to change or sticky concession contracts hold off the trend? Then again, the trend may just be starting.
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