my profile | my password | search | faq & rules | forum home

» Film-Tech Forum ARCHIVE   » Operations   » Ground Level   » "Price Of Movie Popcorn To Jump"

Author Topic: "Price Of Movie Popcorn To Jump" Jim Cassedy Phenomenal Film Handler Posts: 1661 From: San Francisco, CA Registered: Dec 2006 posted 03-18-2008 09:31 AM                     Oh Noooooo: "Movie Popcorn Prices To Jump" John Horn / Los Angeles Times Monday, March 17, 2008 LAS VEGAS -- Global warming has had a strange effect on Hollywood, such as stars trading in their sports cars for hybrids and Al Gore hoisting an Oscar. But its latest effect might also be its corniest. As a consequence of the booming demand for alternative fuels -- with farmers replanting acres of popcorn with more profitable crops that can be converted into ethanol and other biofuels -- the sellers of the nation's favorite movie snack say the salty tub soon will take a bigger bite out of your wallet when you're at the multiplex. "The consumer will probably see an increase in popcorn prices pretty soon," said Carlton Smith, the chairman of Iowa's Jolly Time popcorn brand. While the price hike probably will be modest, perhaps no more than 15 cents a serving, the rise is inevitable and necessary, according to the popcorn providers and theater owners gathered here for last week's ShoWest, the annual convention of the National Association of Theater Owners. Movie audiences have long complained that pricey concessions -- along with chatty moviegoers, in-theater advertising and the low quality of many new releases -- have made watching movies at home often more attractive than going to theaters. While box office grosses are rising because of higher ticket prices, with 2007's take totaling $9.6 billion, annual admissions are essentially flat, hovering around 1.4 billion tickets sold each year. But if audiences worry that movie snacks are too expensive, they need to know those $5 buckets of popcorn is what keeps the average national admission price around $7. "If we didn't charge as much for concessions as we did, the tickets to the movies would cost $20," said Mike Campbell, chairman and chief executive of Regal Entertainment Group, the nation's largest theater chain with 6,300 screens. Concession sales are a theater's lifeblood, accounting for as much as 45 percent of profits at the nation's largest chains. Popcorn offers one of the biggest returns on investment for exhibitors, because the unpopped kernels used to make an entire bucket of popcorn cost just a few pennies. But the price that the mostly Midwestern farmers are charging for raw popcorn has doubled in the past two years, and the wholesale fees popcorn providers are charging theaters is starting to climb almost as fast. Fans of microwave versions might notice a markup as well. A year ago, a theater operator buying a 35-pound bag of Orville Redenbacher's Gourmet Popping Corn paid $7.50. At the 2008 ShoWest convention, it has climbed to $10.17, said Mike Donahoe, a national sales manager for Minnesota's ConAgra Foods, the country's leading theater popcorn manufacturer. "And I don't see it getting any better." Despite the country's voracious appetite for popcorn -- Americans consume 4 billion gallons annually, or about 13 gallons a person, according to the Popcorn Board -- it is hardly one of the nation's biggest crops. Norm Krug, the chief executive of Nebraska's Preferred Popcorn, said about 240,000 American acres are planted with popcorn, while 77 million acres are planted with seed corn, which is generally a less fickle variety and consequently easier to grow. With the demand for seed corn rising, so has its price, which in turn drives up the price of popcorn. Two years ago, a farmer charged about $10 for 100 pounds of popcorn. Today it's about $20. "The farmers are in the driver's seat, definitely," said Jolly Time's Smith. Source: http://www.detnews.com/apps/pbcs.dll/article?AID=/20080317/ENT02/803170330  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 03-18-2008 12:20 PM                        quote: Jim Cassedy "If we didn't charge as much for concessions as we did, the tickets to the movies would cost $20," said Mike Campbell, chairman and chief executive of Regal Entertainment Group Don't you just love it when some guy in a suit makes a wild exaggeration and makes himself sound stupid? If he'd said, "the average movie ticket would cost $10 or $11 instead of around $7" it would be more true and maybe people wouldn't think he was just a greedy suit.  |  IP: Logged Lyle Romer Phenomenal Film Handler Posts: 1400 From: Davie, FL, USA Registered: May 2002 posted 03-18-2008 12:41 PM                     To make the same gross profit he is pretty close if you remove the concessions altogether. If the profit margin wasn't good enough it might make sense to do that because you'd save the labor cost of serving it and a lot of cost of cleaning. Let's say avg ticket price is $7 and avg film cost is 55% each ticket will yield gross profit of $3.15. No figure $3 per cap in concession and food cost of 25%. That gives $2.25 per person gross profit from concession. So you need to get an additional $2.25 out of each ticket so the avg ticket will have to be increased $5.00. So this example would take ticket prices up to $12 on average. If the matinee/child price was $6.00 and evening was $8.00 to get to the $7 average, when the price was increase you'd want to keep some savings on matinee/child and if you set those at $9.00 your evening would end up at $15.00. Some of the city regals are probably averaging $10.00 now so the increase would get the average up pretty close to $20.  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 03-18-2008 02:41 PM                        But Lyle, nobody ever said anything about removing the concessions altogether. That's stupid. He is saying, "Well, sure we sell a large popcorn for $7, but if we sold it for $4 we'd have to charge $20 for tickets." That's even dumber.  |  IP: Logged James Westbrook Phenomenal Film Handler Posts: 1133 From: Lubbock, Texas, Usa Registered: Mar 2006 posted 03-18-2008 02:48 PM                     The cost of EVERYTHING is going up. Economists can bicker and argue why forever. Fuel costs, slow economy, devalued dollar, yada yada yada. A lot of pricing at the theatre chains tends to be "What the market will bear" and thus as high as possible without chasing the brunt of the customers away. Everytime we've had a price increase, I wonder if it isn't too much but then the customers still buy concessions (and movie tickets) and not many grumble about it. I suspect the additional cost of seed is not impacting the profits that much. The first thing to go in some chains is the Free Refill. (Some chains never had that.) Maybe a surcharge for extra butter.  |  IP: Logged Monte L Fullmer Film God Posts: 8367 From: Nampa, Idaho, USA Registered: Nov 2004 posted 03-19-2008 01:46 AM                     When Cineplex Odeon was around, they did have the surcharge for extra butter..two free squirts and 25 cents thereafter on any size, plus would charge sales tax on top of the completed sale-not included in the sale as most theatres would do.. ...and it was a mandantory upsale speech from the concessionaire to ask the patron to suggest extra butter ... and this was all back in the late 80's til they went under ... Actually, Mr. Campbell of REG is dead right for the aggregated percentages of the film percentages that the studios take along with security deposits, plus the theatres are responsible for paying their own taxes which is taken out of the total tix price, there has to be a way to keep their business going in the limited selling time that theatres have-they're not like an Albertsons, or other huge grocery chain that can sell food items 24/7/365 a year, why they need to make at least a 20% profit each day to have an operating buffer.. This is why conc prices are high as they are since the theatres are in the business in showing movies, not in selling conc items. -Monte  |  IP: Logged Todd Shelskt Film Handler Posts: 26 From: Manchester, CT Registered: Feb 2008 posted 03-23-2008 06:09 AM                     Here's a thought: If theatres lowered the prices of concession items maybe they'd make more profit in the long run. Decrease the prices by 50% and maybe the ratio of purchases goes up over 2 to 1. As a side benefit, the stigma of theatres being the consummate ripoff would go away. A family of four wouldn't have to mortgage their home for popcorn and Raisinets.  |  IP: Logged Sean McKinnon Phenomenal Film Handler Posts: 1712 From: Peabody Massachusetts Registered: Sep 2000 posted 03-23-2008 10:23 AM                        I think one thing that Mr. Campbell is missing here is that if theatres didnt sell concessions you would lose a lot of your over head even if not totally eliminated some things could be drastically cut back like; Concession Staff, Usher Staff, Stock, Concession equipment, uniforms, cleaning supplies, overnight cleaners, managers, POS equipment, lobby square footage, im sure there are more things that I am missing Point is that while you would have to raise your ticket prices and while the studios do take a percentage of that you also lose a lot of operating costs maybe not enough to completely offset the extra money the studios are taking but probably enough to keep ticket prices lower than twenty dollars.  |  IP: Logged Darryl Spicer Film God Posts: 3250 From: Lexington, KY, USA Registered: Dec 2000 posted 03-23-2008 12:37 PM                    here is what is interesting. You take a theatre that plays discount movies for a $1.00 or $2.00 and compare the per cap for that theatre to a first run. As an example I have seen discount theatres do the same amount of attendance as a first run yet their per cap always seems to be a $1.00 or more less than the per cap of a first run location. I know you can say it's because people are looking for a cheap way out but they saved $6 or $7 dollars on each ticket. Oh well, it's just interesting that people spend all that money to get in yet still buy the large popcorn but if they pay a $1 or $2 they buy the small or nothing at all. One thing you have to understand too is that this whole idea of keeping track of the per cap has only been around in some areas for about 30 years. Used to it was get them in and get them out. No real intermissions, 10 mins. at the most. The big change happened when ticket sales started to flatten out and attendance started going down and the film companies started demanding more percentages of the grosses.. Keeping an eye on the other money being spent by the customer became more important.  |  IP: Logged James Westbrook Phenomenal Film Handler Posts: 1133 From: Lubbock, Texas, Usa Registered: Mar 2006 posted 03-23-2008 03:05 PM                     That is why a lot of concession stands in the older single-screen theatres were tiny. Concessions were just a source of additional revenue, not what ran the theatre. Then the ticket sales kept the theatre and owner financially afloat. The concessions revenue was what funded the owner's vacation to Hawaii.(And managers got a larger percentage of commission from the stand as well than what is offered now, if commission is available at all.)  |  IP: Logged

All times are Central (GMT -6:00)

Printer-friendly view of this topic

Hop To: Select a Forum: Category: Operations -------------------- Digital Cinema Forum Film Handlers' Forum Large Format Forum Ground Level Feature Info, Trailer Attachments & REAL Credit Offsets Category: Community -------------------- Film-Yak Film Handlers' Movie Reviews The Afterlife Bob Maar's Joke-A-Thon Category: Classified -------------------- Equipment and Supplies Wanted/For Sale Help Wanted/Seeking Employment Category: System -------------------- Software Beta Testing Forum

The Film-Tech Forums are designed for various members related to the cinema industry to express their opinions, viewpoints and testimonials on various products, services and events based upon speculation, personal knowledge and factual information through use, therefore all views represented here allow no liability upon the publishers of this web site and the owners of said views assume no liability for any ill will resulting from these postings. The posts made here are for educational as well as entertainment purposes and as such anyone viewing this portion of the website must accept these views as statements of the author of that opinion and agrees to release the authors from any and all liability.