With Cinemas Struggling, AMC Gets Into The Popcorn Business – Quartz

While movie theaters are struggling, AMC Entertainment is looking to sell its popcorn outside of theaters.

The world’s largest movie theater chain said on Thursday it will begin selling its popcorn in malls, supermarkets and convenience stores across the US next year, both as a freshly popped option and in microwaveable packaging. With the pandemic changing consumer habits, the cinema company will also begin selling fresh popcorn for takeout, takeout and delivery — ways to pick up food that has boomed during the pandemic. The company says it plans to operate up to 15 stores in the US by the end of 2022 — and not all of them with an AMC theater location.

Entering the multibillion-dollar popcorn market “makes sense and makes sense” [for AMC], one wonders why the idea hasn’t been tried before,” said Adam Aron, AMC’s CEO, in a press release. The move will help the world’s largest cinema chain reach new audiences and diversify its revenue streams.

That comes as the pandemic continues to loom over movie theaters. During Labor Day weekend 2021, AMC saw the highest admissions for that weekend in the company’s history, suggesting movie theaters could recover to pre-pandemic numbers. Total movie ticket sales this year outpaced 2020 sales, but they are still nearly 70% behind 2019 revenue of $11.4 billion, CNBC reported.

Popcorn improves AMC’s profits

Although people don’t watch movies like they used to, AMC has used its popcorn as a timely reminder. In June, the owner of the movie theater, which typically sells up to 52 million bags of popcorn a year, offered shareholders free popcorn, in part to embrace its newfound fame as a meme stock, and to persuade retail investors to buy and hold stocks and to align with management during crisis situations.

This isn’t the first time popcorn has saved theaters. Until World War II, mainstream movie theaters didn’t serve popcorn; they wanted to attract a high level audience and didn’t want popcorn shit to scare the public and ruin the carpets. During the Great Depression, movie theaters began to go under, but the movie theaters that started serving popcorn and other snacks survived — with owners realizing that concessions were their tickets to higher profits. In 1945, more than half of all popcorn in the US was eaten in movie theaters.

Popcorn is big business for AMC. Food and drink sales generally account for a third of AMC’s annual turnover. In the first quarter of 2021, food and beverage revenue per customer soared to an all-time high of $7.37, up from $4.76 in the same period last year, the company said in its May first-quarter earnings call.

As moviegoers trickle back to the theaters, they’re linking their movie to food more than they used to. “What we’ve seen as people return to the movie theaters is that more and more people are going to the concession stand,” Aron told investors and analysts during the second-quarter earnings call in August. “They buy food and drink products because they want the whole experience.”

AMC reports its third quarter results after the market closes on Monday.

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