Happy Hours: Alcohol Service Emerges as Hot Trend in U.S. Moviegoing

Alcohol service at the movies is becoming more common in North America, with a rising number of exhibitors navigating the legislation in their communities to incorporate adult beverages. A CinemaCon 2017 panel on the topic proved particularly informative for those in attendance, covering everything outside of legislation for exhibitors to get the most out of an in-theater bar.

The session began with an eye-opening statistic from moderator Shawn Sandt, director of sales at Proctor Companies, which specializes in designing and installing bar areas for exhibitors. Sandt noted that alcohol represents 60 percent of the approximately $350 billion a year beverage industry, presenting a very ROI-friendly incentive for exhibitors who decide to adopt the concept at their theaters. Craft beer in particular has experienced double-digit growth in that category over the past decade, according to Craig Maule, national accounts manager for New Belgium Brewery. Maule pointed out that craft beer represented close to $23 billion of the overall beer category in 2015, which hit a total of $105 billion that same year. The profits are enticing, but getting the right strategy in place is paramount once all the legal details are sorted.

“We’re a small independent operating in a market against some industry titans,” said William J. Barstow, owner of Main Street Theatres, which operates eight multiscreen locations with a circuit-wide total of 48 screens in Nebraska and Iowa. “We weren’t worried about it,” he said, referring to the addition of alcohol service to his offerings around the start of the decade. “We have a chip on our shoulder; we went out there to compete.” Main Street Theatres called on Proctor Companies to install the bar, committing themselves fully to the concept from the start. “We had to go all in.”

Rick Fogel, owner of Bar Starz, a company focused on providing and perfecting alcohol strategy for a range of clients, noted the importance of being fully committed to the concept when entering such an endeavor. “When you go into a full-service bar operation, you’re either full in or you’re not,” he said. “You can’t dabble in it and see what works; when you piecemeal it, it becomes really difficult. Focus on what the expectation is, and from there the most important part of the guest experience becomes consistency and quality. You get one chance to make an impression, and their expectation is that food and beverage is going to be great.”

For Fogel, that includes dedicating the proper amount of space in a bar area’s original design. “The number one error across the board is being underbuilt,” he said. “Some people have a tendency of having cold feet going into this, building small and limiting the investment. You need to determine what you want to serve, and build to serve it.”

Investing in a new design, however, doesn’t necessarily mean guaranteed success. “When we add something to our concessions menu, we don’t have to be experts,” said Main Street’s Barstow. “Just put it on the menu and sell it. But when you do something like this, you need to surround yourself with smart people. That means legal representation to understand your local liquor laws, how to staff employees to work in this area, somebody to explain to you what’s going to move and how to get the best yield out of it.”

That’s where developing a drink menu comes in. Done correctly, it’s much more than simply listing an inventory of wine, beer, and spirits; it has the potential to complement the moviegoing experience in a way that’s unique to a location. “We call it menu engineering,” said Fogel. “As you build your signature drink development, you’ll have core drinks that will be part of your menu and popular drinks that will be exclusive to your location. Then you get into a second tier, limited-time offers (LTOs), which allow you to build feature cocktails for specific movies coming up.” That strategy helps define a location’s character and can help transform a circuit’s brand identity. Merely offering alcohol isn’t enough; the secret is in promoting it as part of the experience.

That philosophy has been behind Studio Movie Grill’s approach to alcohol sales. “We start the design around our drinks by looking at the upcoming films and making the LTOs and beverage offerings an extension of each film,” said Brandon Jones, the circuit’s senior director of marketing. Studio Movie Grill operates 24 locations in nine states, and it views LTOs as an important part of its strategy. “For the movie Logan we designed a drink called the “X23”: Crown Royal, apple whiskey, fresh lime juice, agave nectar, ginger beer, and a basil leaf,” said Jones. “Our bartenders served that in a Logan glass, so when you come into the theater the whole design of the menu is around the film. The films really drive the business, and we want to leverage that as much as we can.”

Understanding an audience is essential to the success of an LTO; at the end of the day it’s a matter of demographics when pairing a drink with a movie. “If it’s an R or PG-13 rated film, it’s going to drive a certain audience,” explained Jones, using his circuit’s campaign for Bad Moms as an example. “That was a drink built for a specific film with a female audience. Now with Rough Night, Snatched, and Girls Trip coming up, it becomes a program we can continue to roll out for that audience.”

Studio Movie Grill does around 10 to 12 LTO campaigns throughout the year, allowing the circuit to test new drinks and offer exclusive glassware tied to specific films. The company has also developed LTOs around calendar events and charitable causes, as was the case in April when SMG designed a drink called “Light it Up Blue” for Autism Awareness Month—donating $1 of every purchase to the Autism Speaks Foundation.

As with every other aspect of the industry, the customer service element shouldn’t be overlooked. “From the very beginning, we did not want to bring outside servers that could bring a different mentality to our business model,” said Main Street’s Barstow. “To this day, we identify someone in our staff and groom and train them to become a bartender.” For Studio Movie Grill, staff training also brings an opportunity to highlight menu items and entice guests to try new offerings. “There is a lot of influence through suggestive selling,” said Jones.

Servers not only make up part of a circuit’s culture; when it comes to alcohol, there are strict guidelines on who can provide patrons alcoholic beverages. “Training is critical,” noted Jenny Jacobi, senior project manager at Alamo Drafthouse, a circuit that prefers to go above and beyond state regulations when training staff. Alamo has an age policy of 18 and up for patrons unaccompanied by an adult, which helps cut down on any potential unruly behavior Moreover, a strict zero-tolerance policy against talking, texting, or any kind of disruptive behavior helps ensure a stress-free moviegoing experience for patrons. “Typically, if you see somebody who is intoxicated, they’ll be violating that policy anyway,” said Jacobi. Alamo’s in-theater service model, which has servers taking and delivering orders inside the auditorium directly from customers, acts as an additional deterrent to potential issues—the theater staff is actively aware of the audience in every auditorium. Despite this structure, Jacobi pointed out that the circuit rarely has to deal with serious violations. “People are coming to our theaters first and foremost to see a movie; they aren’t coming to get wasted as they would at a bar. You have a time restriction, movies are getting a little longer now, but it still makes it difficult to consume a large amount of alcohol in that time.” Barstow echoed the same sentiment, noting that Main Street Theatres hasn’t had any significant issues with guest behavior, “I can count on one hand all the times we’ve had an alcohol-related problem in our theater.”

As outlined in the panel, the profit margins in alcohol sales are an obvious attraction for exhibitors considering adopting the concept. Before concluding the sessions, however, Barstow highlighted the positive effect alcohol service has had in increasing bookings for private and corporate events. “Don’t think of it as just adding an amenity to a good Friday night customer base,” he explained. “What you’re really doing is helping change your theater into an event venue.” Barstow said that his company has seen an increase in these bookings since bringing in alcohol service, “There is no week that goes by that we don’t add at least one organic or corporate event,” he said.