A few questions with Liza Cartmell

2 Jun

RECALIBRATION IN THE FUTURE FOR CONCESSIONS BUSINESS: LIZA CARTMELL, GROUP PRESIDENT, ARAMARK SPORTS & ENTERTAINMENT

Liza Cartmell

Venues Today discussed the state of the industry with Aramark’s Liza Cartmell, who is also one of our three 2010 Women of Influence, announced today. Following are some of her observations on changes and trends in food and drink concessions.

If you were going to predict what this business would be like in five years, what would be the major change?

I think you will see a lot more partnerships between concessionaires and owners of facilities and sports teams. It’s not so much about the margins as it is about being able to operate in an environment of shared interests. The expectations of the fans and the flexibility the team needs to adapt to what’s going on in the marketplace mean they need us to be more flexible. If they’ve put us in a box that says you’re vanilla, and the market is looking for chocolate, we can’t meet their needs. We’ve mutually agreed in a growing number of places to migrate to that.

What are the major changes in concessions this season for baseball?

There was a little more of a seismic shift last season because of the economy and there is more of a continuation now. We went very aggressively last year and continue this year into more packaging, value-oriented offerings. We continuously upgrade the core product because we find it’s not so much about people not being willing to spend. They want to make sure they’re getting value. We can get them to continue to spend by introducing more fresh hamburgers, higher quality sandwiches, and select specialty items like the gluten free. These are not big money makers, but they take care of a niche in the market excluded previously.

Is the all-inclusive ticket going to grow in this marketplace?

We continue to roll out the loaded ticket technology. Every team is at a different level as far as utilization of it as a marketing tool. It’s one of those things like nobody used to use credit cards in the facilities and it took about 10 years to really get the momentum of people even thinking of taking out their credit card at the game. Adults who went to sports always brought cash. The longest line in the building for the last 10 years wasn’t the bathroom; it was the ATM.

What about using your cellphone or some other kind of electronic wallet at the concessions stand? How far down the line is that?

The capability exists today, but the willingness and that pioneer group is a very small percentage. If you’re talking 40,000 people and it’s two percent, that’s 800 people; that’s just not a lot. We have that with loaded tickets, where the dollars and percentage are very, very small. We’ve had loaded tickets since we opened the Phillies six years ago. They’re the largest users, the most forward-thinking in introducing it and making it available, but it’s still under five percent dollarwise.

When will you see a return on investment?

ROI can be consumer satisfaction and the team’s capacity to offer a variety of packages for people. One of the big successes in loaded tickets for the Phillies has been in their premium areas; the ability for their premium ticket holders to provide as an amenity a complete experience. That the entrepreneur knows that’s a great value because they’re able to entertain yet they don’t have to go to 81 games is big. Do I get the value because I can eliminate my cash counting and my run to the bank? I’m never going to get the ROI on that. It’s a totally different ROI for different people if they use it in the right way.

Is it true major concessions companies work on two and three percent margins these days?

Pretty much. And it’s not sustainable. People need to make operating decisions that aren’t great and that’s not good for anybody. In the last couple of years, we’ve walked away from a number of deals because we were not willing to be in that environment where the only way we could not lose money was to do the wrong thing. We’ve lost some market share, but that’s okay.

Will there be a correction?

There’s one already underway. The economy is forcing people to think differently about what they need to do to succeed. I don’t think the suite model as it was configured will survive. The basic deal was to charge you a set fee, say $250,000, for the suite. Then you will go to 10 football games or 81 baseball games and I may or may not charge you extra for the concerts and, by the way, I’m going to charge you an arm and a leg to have food in the suites. You are going to be outraged at the prices you are going to have to pay in order to entertain properly in accordance with the suite environment you are trying to set. But you are going to have an administrative assistant to the president who will balk at the price and order popcorn and peanuts, hot dogs and a couple of beers. All of a sudden, the experience is nowhere near what it was designed to be.

How did it get there?

For a long time, people were willing to spend whatever price it took to be able to touch the sports world. It was a corporate item; that’s what it cost. Now people are looking at $300,000 and saying that’s big, I’m going to have to cut six people. And, by the way, at StubHub I can buy that suite for two big meetings and I’ll spend $40,000 and that’s all I care about; I’ll bring all my best customers. There’s this whole recalibration. People are bringing the analytical, disciplined part to the value proposition and not saying it’s sports, I’m going to buy it. — Linda Deckard

Interviewed for this story: Liza Cartmell, (215) 238-3000

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