"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.
Way to go Mike Campbell justifying the raping of the customers at the concession stand. I understand very well that theatres depend on the concession stand to make a profit but I think some of the prices a the large chains are way too high. Independants can sell popcorn for a dollar or two less and still make money. I think that the ticket price would obviously go up without selling concession but I would like to see the math behind charging $20.00 If your theatre has a 3 dollar percap then you would have to raise your ticket price by $3.00 to make the same money, so if yout ticket is 8.00 now it would be eleven dollars to make the same money. I realize that the studios take a percentage of the ticket price but you are erasing your costs of goods, cleaning costs, a large chunk of your payroll. If you dont sell food you dont have to clean theatres, so all you need is box office staff, maybe a ticket taker, and projectionist. I think the dramatic cut in overhead will even out with the studio percentages.
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