When people go to the movies, they like to splurge–whether it’s on a premium format screening or a giant tub of popcorn. On the concessions side, many of cinemagoers’ favorite sweet and salty treats come from J&J Snack Foods, Vendor of the Year at this year’s Geneva Convention. With their flagship product, the ICEE, sold in the majority of U.S. theaters, J&J has become an essential part of the cinema experience for many a moviegoer–if not through ICEEs, though some of their other products, including SuperPretzel soft pretzels, ¡Hola! Churros, and–making inroads into the cinema market–Dippin’ Dots ice cream.
“Our tagline at J&J is ‘Fun served here,’” says President and CEO Dan Fachner–even if the ICEE has a not-particularly-fun secret: “If you go into a theater, the ICEE has probably the lowest calorie count of many of the things that are out there,” with a 12-ounce ICEE coming in at less than 100 calories. “We don’t advertise [it] that much, because people are looking for an indulgence.” In advance of the Geneva Convention, Boxoffice Pro spoke to Fachner about J&J’s evolution over the last few years and selling products that put smiles on people’s faces.
You’ve had a big year at J&J. In July, you opened your first owned distribution center, down in Terrell, Texas. What does that mean for your cinema partners?
Not only for our cinema partners, but for all of our partners, it puts us in a much better position to manage through the whole distribution triangle. We have 16, 17 different manufacturing plants. From those plants, we’ve moved them into 30-plus 3PL [third-party logistics] [facilities] today. As we open up these three new RDCs [Regional Distribution Center]—one in the east, one in the south, and one in the west—we’ll be able to move product out of 30 distribution centers into [fewer than] six, which will make us much more efficient and closer to the customers. We work with a couple of really large distributors, like Vistar, for the theater industry. We’re [now] able to get the right products to them more quickly. We’re really excited about it.
Last year, the conversations around F&B taking place at conventions like Geneva were about inflation, supply lines–the difficulty and expense of obtaining products. What’s the evolution of those issues been like for you over the past year?
They have gotten a lot better compared to the real problem months. There still are some high-commodity costs out there. A few things have come down, like wheat, but we still have some others that have gone up, like sugar. We’re still fighting through some of those pieces, but what we don’t have is a backlog in getting the core commodity items that we need to make our product. So we’re in a much better position today to be able to provide the theater industry with exactly what they need in a timely fashion.
Popcorn, soda, and candy are traditionally thought of as the “Big Three” in terms of movie theater concessions–but ICEEs are right there with them. They’ve really become associated with movie theaters. How did that come to be?
I would almost scoot ICEEs in front of candy. It really is a staple. Part of the reason for that: It’s a terrific treat while you’re in the movie theater, and it’s one of those items that you’re not really able to buy and have at home in your refrigerator. When you come to the theater, it’s an indulgent treat or a reward. A little bit like a soft-serve ice cream might be. It’s such a natural product with [to pair with] popcorn—a sweet and salty kind of thing.
We started in the theater industry about 35 years ago, and [the ICEE] was a hit almost from day one. We tested it in some theaters, and the big test was, will this cannibalize fountain [drinks]? Because there’s so much profit in fountain [drinks], like there is in popcorn. And it really didn’t. It’s a product that customers have grown to love and to expect when they come to the theater. It’s part of the moviegoing experience today. We’re really, really fortunate to have a product that has hit that level. If you go to a theater, you want to get an ICEE, right? You want a popcorn and an ICEE, or candy and a fountain drink.
I think what makes ICEE so special—other than the obvious things around being a great product, a great taste, and a unique feel—is that you can’t buy it and have it in your refrigerator at home. It’s a treat, like a movie theater is. It’s a treat to yourself. ICEE fits right in with that.
It’s the same with Dippin’ Dots–they’re not a product that you can typically get at home or out at the store. They’re a splurge.
It is. It’s funny you brought up Dippin’ Dots, because we bought that about a year ago. What I love about it is, growing up myself in the ICEE industry, Dippin’ Dots feel so similar. It is one of those things where everybody knows the brand. If you ask people, “Do you know what an ICEE is?” One, they know the brand. Two, it brings a smile to their face. And then the third [reaction] is, “Where can I get that? I know I can get it at movie theaters. Where else can I buy it?” Dippin’ Dots is very similar to that. Everybody knows the brand. In fact, Dippin’ Dots has a 92 percent awareness [rate]. If you ask your neighbor, they all know it, they all have a story about it. And then the question is: “Where can I get that?” Normally Dippin’ Dots is more associated with an amusement park or a ballpark or something like that. We are now trying to introduce it into theaters. It’s a treat or a reward, that ‘something special’ that you can easily eat while enjoying the movie.
It’s certainly not as messy as eating traditional ice cream in a dark room. You’re not going to get it all over yourself.
You’re not! Both [ICEE and Dippin’ Dots] have this uniqueness. If you work for [J&J], and you tell somebody who you work for—a neighbor, friend, [at the] grocery store, church, wherever—everybody has a story about those products. If you’re talking about ICEE, somebody will tell me the story, “I remember when I used to go here, and my dad always bought us this.” “I remember coming home from the baseball game.” “I remember going to a Target, and my mom said that if we were good, we’d get it as a reward.” “I remember going to the movie theaters and getting it with the popcorn.” And if the machine’s down, then it’s almost like, “Oh no, this isn’t going to be the same experience.” Everybody has a story. At the ballpark, at the concession stand. Dippin’ Dots is that same thing. Those brands are just so strong. Our tagline at J&J is, “Fun Served Here”, and [ICEE and Dippin’ Dots] really exemplify that. They’re hard to talk about without a smile.
One of the trends for cinema concessions over the past few years has been cinemas playing around with the size of their menus. A lot of chains went to a limited menu as they reopened in 2020, and then as time went on they reassessed what to add back in. Is that something you’ve been doing at J&J?
As it relates to the theater, I would just say—we at J&J feel really blessed in the fact that we serve ICEEs, Dippin’ Dots, pretzels, and churros, to the movie industry. As this period of time came about where they eliminated some SKUs and, like other industries around the world, struggled with being able to get enough [labor] to manage the business, what they looked for was niche items that were easy-to-serve, that were fun products with high margins. And, really, all of our products fit in with that. We have products that are easy to serve [and] quick to prepare—because you’ve got to get people through the line. They’re fun, niche products that people can’t get everywhere, and they’re all high margin items. ICEE or Dippin’ Dots or pretzels or churros: All of our products fit within [the cinema concessions industry’s requirements], so when they eliminated SKUs, ours didn’t get eliminated. It was a benefit to us, because people would order our products more often.
What’s your footprint in the cinema industry? How many chains do you work with?
We are really fortunate to be in the top three to five [chains], depending on how far and broad you want to go–we’re in the top five [largest chains] when you include Mexico, with Cinépolis and CMX. We are certainly in the top three [in North America], with AMC, Regal, and Cinemark. We’re fortunate beyond that to have a [presence] in the really large regional chains. In some cases, because they’re regional, you can watch them more closely and see that their volume per outlet is better [than the national chains]. Places like Santikos, Marcus, Harkins or Showcase. We’re really fortunate to be in 80, 85 percent of [cinema] locations with ICEEs. There are some great growth opportunities still to come with Dippin’ Dots, and we think there are still good opportunities to grow pretzels and churros. But we feel like we have a really nice, dominant position on the ICEE side.