A publication of the National Association of Theatre Owners

Advertise in In Focus

©

Cinemartini!

Is Alcohol American Cinema’s Fastest Growing Concession Item?

by Ryan Stern

May I see a photo I.D., please?’ It’s Friday night and the cavernous lobby of Pacific Theatres’ Arclight Cinemas is buzzing with the energy of Los Angeles cinephiles eager to sample one of the many new releases screening that evening.

Carding is nothing new to moviehouses, of course, but I’m not digging out my driver’s license to prove I’m older than 17; I’m trying to establish that I’m at least 21. “Alfie” opened nationwide today, and if I want into today’s only “21-plus” screening of the Jude Law comedy-drama in California, I have to verify that I’m of drinking age.

As I get closer to the designated auditorium, I exchange my ticket for a blue wristband – a signal to the nearby bartender that I can, indeed, legitimately purchase the Amstel Light I’ve earmarked for my cupholder armrest.

Those in line ahead of me come away with chardonnay, Cosmopolitans and apple martinis.

If “Alfie” may underperform in most American cinemas, this over-21 screening of the film is a sell-out, packed wall-to-wall with blue-wristed grown-ups, almost all of them cradling some manner of libation alongside their popcorn, red vines or gourmet grinders.

To echo the on-screen protagonist, what’s it all about?

In August, the Arclight became the first first-run cinema in California licensed to permit alcoholic beverages into one of its auditoria, a landmark accomplishment in a state with, when it comes to movie theatres, a reputation for some of the nation’s least-permissive alcohol-licensing policies.

The Arclight’s popular “21-plus” screenings represent the crest of one of the fastest-growing trends in American exhibition. As recently as early 1990, no first-run cinema in the nation allowed alcohol in its auditoria. Research suggests that by early 1997, a total of 14 first-run auditoria permitted it. Today, more than 270 first-run auditoria nationwide allow alcohol, and the movement’s momentum shows little sign of abating.*

*Alcohol-friendly sub-run auditoria have been around a lot longer (at least since the 1970s in the United States) than their first-run cousins, but the first-run side of the market has grown much bigger, much faster. Note that there are currently fewer than 100 alcohol-friendly sub-run auditoria in the country, compared to more than 270 alcohol-friendly first-run.

DISTRIBUTION
BREWS DIFFICULTY
Why the boom in cinema libation?

Experts agree it largely comes down to how the major film distributors evolved their attitudes toward liquor over the last decade (See 15 Years of Libation in First-Run Auditoria).

“In a lot of states, some of the laws have shifted slightly, because the cinema-eatery broke the ground for some of us to come in and be able to serve alcohol in our theatres.” – Landmark Theatres exec Tearlach Hutcheson

Marco Theatres general manager Jim Campo, who operates the country’s 2nd-oldest first-run cinema-eatery, says exhibitors who wanted to serve alcohol in a first-run facility had to overcome the stigma of the cinema drafthouses of the 1970s, many of which, he says, nested in older, dilapidated cinemas that offered substandard picture and sound. “Back in the early ‘90s, that’s what everybody imagined a food theatre was like,” says Campo, who struggled for years before he was able to convince all the studios to book first-run movies into his Marco Island, Fla., quad. “We broke those barriers down.”

“The market for dinner and a drink has always existed, but the studios were hesitant, and had to be educated that this was a different business model,” agrees Alamo Drafthouse CEO Terrell Braly, whose Texas circuit operates 19 alcohol-friendly auditoria. The major distributors, says Braly, “want to make sure that their film product coming out is shown in the best environment possible. They don’t care if the beer is cold, all they care about is that the product is shown properly.”

Brian Schultz, whose Studio Movie Grill chain serves alcohol in all 13 of its first-run auditoria, tells much the same story, describing his efforts in the 1990s to gain access to first-run product as “a wearing-down process.” “We just asked them for a chance to show them what we can do.”

AGED
APPROPRIATELY
Specialty cinemas, catering mostly to adults and less reliant on major studios for first-run product, may also have played a role in alcohol’s sudden emergence at the concession counter.

Alcohol Served To Your Seat Alamo Lake Creek 8-plex, Austin, Texas Alamo Village quad, Austin, Texas Alamo West Oaks 6-plex, Houston, The American Theatre twin, Charleston, S.C. Carolina Theatre/Grill single, Elizabeth City, N.C. Chunky’s Cinema Pub 5-plex, Pelham, N.H. Chunky’s Cinema Pub twin, Haverhill, Mass. Cinema Grill Café, Carrollton, Texas The Commodore single, Portsmouth, Va. Hollywood Blvd. 5-plex, Woodridge, Ill. Marco Beach quad, Ft. Meyers Beach, Fla. Marco Theatre quad, Marco Island, Fla. Movie Tavern at Central Park 8-plex, Bedford, Texas Movie Tavern Green Oaks 8-plex, Arlington, Texas Movie Tavern Ridgemar 6-plex, Ft. Worth, Texas Smitty’s Sanford 6-plex, Sanford, Maine Smitty’s Tilton 6-plex, Tilton, N.H. Smitty’s Windham twin, Windham, Maine Studio Movie Grill Addison 5-plex, Dallas, Studio Movie Grill Plano 8-plex, Plano, Texas Warren Old Towne 5-plex, Witchita, Kan.

In 1993, when Cleveland Cinemas’ Cedar Lee quad became the first U.S. specialty house to allow alcohol into its auditoria, circuit chief Jonathan Forman saw selling wine and imported and draft beer as a natural extension of any concession stand serving grown-ups. “Adults may choose to go to a theatre that tends to cater more towards adults – and know that, in making that selection, they can enjoy a glass of wine,” he explains.

Specialty films, he reasoned, essentially dictate specialty concessions. “Generally speaking, people who go to see specialized film are not among the biggest consumers of junk food. So by introducing things like fresh foods, beer and wine, you have an opportunity for the same kinds of concessions sales figures as you would in the multiplex.”

“If we didn’t have alcohol [at the Cedar Lee],” says Sean Denny, the cinema’s general manager, concession sales “would be much lower.” Buoyed by success, the circuit in 2000 began selling alcoholic beverages at its Shaker Square Cinemas, a Cleveland 6-plex that programs mostly mainstream fare.

Drexel Theatres, another Cleveland-based circuit trafficking in specialty cinema, began offering alcoholic concessions in 1995, at its downtown Drexel East. Initially, they sought an alcohol license for special events they were planning, including a Tony Awards party and a “Casablanca” party. Only when the state of Ohio refused to grant the business a one-day liquor license did they pursue a full-time permit.

Alcohol sales rose after Drexel integrated a café adjacent to the site. “More and more, our patrons would come in, grab a sandwich or a salad and a glass of wine, and if it was near show time, they would take it in with them,” notes Drexel co-owner Kathy Frank. Although patrons were not served inside the auditoria, they were allowed to bring their purchased items inside for the show. According to Frank, only one distributor ever refused to book a film there because of the facility’s alcohol policies. In 2001, Drexel opened Columbus, Ohio’s Arena Grand 8-plex, which programs mainstream fare and carries a full liquor license.

MARTINI MARKET
Other arthouses have followed suit. In 1999, the Angelika Film Center circuit opened its Houston specialty 8-plex with a full bar area distinct from its concession counter. “The art theatre has a very smart clientele,” notes circuit director of operations Terri Moore. “They are very respectful of the product that is on the screen, and don’t normally stumble into these theatres by accident. There has not been one situation of abuse … no rowdiness or problems.

“When you find beer cans and alcohol bottles in the auditorium, you surmise the fact that there’s demand for the product. And then the next thing that dawns on you is, ‘Well, if they’re going to bring it in, I might as well be the one to sell it to them.’” – Emagine Entertainment owner Paul Glantz

Angelika has since opened two more specialty multis in Texas, a Dallas 8-plex launched in 2002 and a Plano 5-plex that debuted in 2004. Both have café/bars, but for the Plano site Angelika even went to the trouble of creating a unique champagne called Angelika Blue, so dubbed because its hue matches the chandeliered lobby’s lighting and decor. “There’s a huge over-21 moviegoing crowd, and it’s very profitable,” says Moore. “I don’t believe we would expand anywhere we couldn’t [sell alcohol] because it’s part of our concept.”

“In a lot of states, some of the laws have shifted slightly, because the cinema-eatery broke the ground for some of us to come in and be able to serve alcohol in our theatres,” notes Landmark Theatres operations exec Tearlach Hutcheson. Within the last two years, specialty exhibition giant Landmark has opened eight alcohol-friendly auditoria at two Dallas sites. The chain has been so successful with them, he says, Landmark would serve alcohol “in every theatre where it was a feasible option.”

“Concessions is an evolving thing. Movie theatres did not start out selling concessions. It just wasn’t part of the fare. It used to be a corner stand. Now, as theatres themselves are evolving, there is a lot of competition for different forms of entertainment out there.

“We have seen an increase in personal wealth in the U.S. People feel they are shopping in nicer shops, eating in nicer restaurants, and now we have to give them nicer theatre experiences … part of that is allowing them to take a drink in with them into the film, because that’s part of our experience as adults.”

MOLSONS, MILLER &
MAINSTREAM MOVIES
For all the inroads liquor has made into the specialty market, no chain operates more alcohol-friendly auditoria – 46 in all – than mainstream Michigan multiplexer Emagine Entertainment. Its first multi, in Flint, Mich., received its liquor license in 1998, a year after opening. Emagine’s two Detroit-area 18-plexes that followed in 2002 and 2004, were fully licensed to serve liquor from the get-go.

Tidying auditoria between shows early in his exhibition career brought home to Emagine owner Paul Glantz the potential of alcohol-friendly cinemas. “When you find beer cans and alcohol bottles in the auditorium, you surmise the fact that there’s demand for the product,” he says. “And then the next thing that dawns on you is, ‘Well, if they’re going to bring it in, I might as well be the one to sell it to them.’”

“We’ve had people write letters saying they will never come to our theatre,” says circuit operations VP Ruth Daniels. “But what we’ve found is that people come back and tell us that it was not what they thought it would be.”

To prevent alcohol-inspired mischief, Emagine enforces a 2-drink-per-movie maximum. Every auditorium is monitored by a surveillance camera, and patrons who are purchasing drinks must wear wristbands. All alcoholic beverages are served in clear plastic cups, which helps cameras spot any drink-passing.

“We had one of the highest grosses in the state with ‘ The Incredibles.’ ... So someone’s going to be hard-pressed to convince me that we’re deterring families.” – Emagine Entertainment owner Paul Glantz

“I have to harbor the belief that there’s opportunity for many, many operators in our industry and I defend the alternative,” says Glantz. “It does not deter families. In Novi, we had one of the highest grosses in the state with ‘The Incredibles.’ Talk about a family picture. And we were one of the top ten in the state. So someone’s going to be hard-pressed to convince me that we’re deterring families.”

Missouri’s Saint Louis Cinemas is another mainstream chain that operates only alcohol-friendly auditoria: Its Chase Park Plaza 5-plex received its license in 2001; its Galleria 6-plex followed the next year. Because the Galleria is located inside a mall, no one is allowed to take alcohol out of the theatre.

General manager Mike Durham notes that while it was harder to secure the licensing for the Galleria location, it would have been harder still had the Chase Park Plaza not proven so successful. “Even though at the Galleria we’re in more of a standard family setting, it’s been very smooth,” says Durham. “Quite frankly, there has not been a single incident relevant to our sale of beer and wine here, not a single one.”

The circuit was set to open its third St. Louis location in December, and set to serve wine and beer there as well.

WHEN TO
STOP POURING
While some of the nation’s largest chains have dabbled in alcohol-friendly auditoria, few have yet to embrace them as “the next big thing.

“Having managers on the wrong side of the curve with this product can put you in a world of hurt in a very short time.” – Emagine Entertainment owner Paul Glantz

When Missouri-based exhibition giant AMC Entertainment purchased General Cinemas in 2002, it came into ownership of three alcohol-friendly auditoria in the Boston and Washington, D.C. markets. AMC also allows alcohol in all auditoria of its Columbus, Ohio, 30-plex, but officials say there are no plans for the chain to expand alcohol sales elsewhere.

Another exhibition colossus, Dallas-based Cinemark USA, has one alcohol-friendly auditorium in a downtown Kansas City, Mo., specialty multi. “It’s not something we’re even seeing doing elsewhere,” says circuit marketing VP Terrell Falk. “Our circuit is really more family oriented, and [alcohol] is not going to be something that is very important to us.”

Alcohol Served Outside The Auditorium AMC Easton Towne Center 30-plex, Columbus, Ohio AMC Framingham 16-plex, Boston AMC Gallerie 7-plex, Washington, D.C. Angelika Film Center 5-plex, Plano, Texas Angelika Film Center 5-plex, Houston Angelika Film Center 8-plex, Dallas Cinemark Palace at the Plaza, Kansas City, Mo. Cleveland Cinemas Cedar Lee quad, Cleveland, Ohio Cleveland Cinemas Shaker Square 6-plex, Cleveland Drexel Theatre Drexel East triplex, Cleveland Drexel Theatres Arena Grand 8-plex, Cleveland Emagine Entertainment Birch Run 10-plex, Flint, Mich. Emagine Entertainment Canton 18-plex, Canton, Mich. Emagine Entertainment Novi 18-plex, Novi, Mich. Landmark Inwood Theatre triplex, Dallas Landmark Magnolia Theatre 5-plex, Dallas Metro/Rocky Mountain Cinemas Isis 5-plex, Aspen, Colo. Metro/Rocky Mountain Cinemas Ski Time twin, Ketchum, Idaho. Muvico Centro Ybor 20-plex, Tampa, Fla. Muvico Palace 20-plex, Boca Raton, Fla. Muvico Parisian 20-plex, West Palm Beach, Fla. Pacific Arclight Cinemas, Hollywood Saint Louis Cinema’s Chase Park Plaza 5-plex, St. Louis Saint Louis Cinema’s Galleria 6-plex, St. Louis Saint Louis Cinema’s Moolah, St. Louis Starz Film Center 6-plex, Denver

Though Emagine is currently the largest U.S. operator of alcohol-friendly auditoria, its owner is not certain a very large chain would be able to implement alcohol sales circuitwide without precipitating trouble. “I don’t think liquor is the ideal product for a large chain,” says Glantz. “If I were responsible for running 200 or 300 theatres, I would have to run them sort of like McDonalds. I would have to have an operating manual, and everything would be sort of scripted for your management team. And in the context of that, inevitably the large, large number results in a bell-curve of management talent. And sometimes – it’s just inevitable – you’re going to have managers on the wrong side of the curve. Well, having managers on the wrong side of the curve with this product can put you in a world of hurt in a very short time. So we think as entrepreneurs and folks who are crafting a product for each specific market that we serve. And being a relatively small organization, we can be very attentive to the quality of our theatre management, our operations management, so that we can control the product effectively. I think it would be a substantial challenge for those who, again, are trying to run a very, very large chain.”

TAP ANOTHER LEVEL
One major chain with big alcohol-friendly plans is Muvico Theatres, which has taken to segregating some multis into “family” and “adult” sections, with bars at the balcony level and minors restricted to the main floor.

Muvico marketing VP Jim Lee says circuit execs trace the inspiration to “club levels” at sports stadia. “The movie experience has always been one experience: one box office, one concession stand, one auditorium, one ticket price, the same thing for everybody. We took [the “Premier Experience” concept] and that became our club level.”

Muvico introduced the “Premiere Experience” at the Palace 20 in Boca Raton, Fla. in 2000, with six adult-only balconies overlooking six of the multi’s 20 auditoria. These balconies are connected to the Premiere Bistro & Bar, which takes up the balance of the complex’s second floor. For twice the ticket price, a Premiere guest gets free popcorn, a reserved seat, free valet parking and access to the over-21 level.

The design of the facility makes it virtually impossible for moviegoers to travel between the two levels, with Premiere guests utilizing a separate box office and entrance. “We don’t want parents to feel uncomfortable about dropping their kids off, thinking that they could get their hands on a drink. It’s a huge liability,” explains Muvico CEO Hamid Hashimi, who adds the circuit would “never” offer alcohol without the strict segregation.

“We’ve had tremendous success with the concept and we’re rolling out at this point,” adds Hashimi, noting that, since the Palace opening, his chain has implemented Premiere-level bars at its Tampa and West Palm Beach 20-plexes as well. A similar scheme is earmarked for the 26-plex Muvico is opening just west of Manhattan in early 2007.

GLASS HALF-FULL
If most liquor-dispensing exhibitors seem pleased with customer response, they also frequently acknowledge a disdain for the red tape alcohol typically precipitates.

Securing an alcohol license for the first time is often expensive and time-consuming, especially for a venue not traditionally associated with alcohol. Cinema owners have to make a case for their business, and usually present a formal request at a city council meeting, at which community members can voice support or dissent. A tentative community can be a sobering reality for an exhibitor interested in serving a more conservative area.

"We don’t want parents to feel uncomfortable about dropping their kids off, thinking that they could get their hands on a drink. It’s a huge liability." – Muvico Theatres CEO Hamid Hashimi

“I know there are folks who think this is sacrilege, but how do those folks feel about taking their kids to a baseball game?” says Emagine’s Glantz. “We’ve had occasional hate mail from a guest who will say that they will never come to our theatre again, and they think this is evil. And my response is, ‘Where do you buy your groceries?’”

Even after a liquor license is granted, maintaining it can require some effort. “You have to have your people do a training, same as if it was a bar, so that they understand the state liquor laws,” notes Metro/Rocky Mountain Cinemas exec Marshall Smith, who allows wine and beer in the auditoria of two resort cinemas.

In most states, there is usually a stipulation requiring an of-age employee to handle distribution of the product. Kathy Frank, of Drexel Theatres, points out the limitations this may entail. “I can see where the economics of payroll and employment in a large commercial theatre might make it difficult when the kids who work at the concession stands are not 21.” And because anyone trying to purchase alcohol who appears to be of questionable age must be carded, distributing alcohol in a traditional concessions line can hinder efficiency behind the counter.

There are more encouraging tales. Massachusetts’ Dedham Community Theatre is a downtown specialty twin competing with a nearby 12-plex. The venue attracts a mature clientele, and owner Paul McMurtry noticed his customers would often arrive early and ask where they could go have a drink before their movie. Although the town rarely grants liquor licenses, McMurtry credits overwhelming town support for helping him secure his.

It did not come without provisions, though. “For now, the town has asked us, just because of their conservative nature and their concern about underage drinking, to have people just consume in the lobby,” explains McMurtry. “I’m respecting their wishes for now, because it is a new license and a very, very rare occurrence.”

McMurtry hopes he’ll soon be licensed to allow alcohol inside his auditoria as well. “If guys like me and independents want to continue to exist, yeah, I would recommend creating an alternative, such as alcohol if it was appropriate. We have to find other ways to take care of the customer, to serve the customer something that can at least increase the profit of the concession stand.”