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Surround Sound? IMAX? Chardonnay? Movie Theaters Look to Alcoholic Beverages

Improved offerings of wine, beer and spirits as well as loosened regulations are making the silver screen a better experience
Photo by: Courtesy iPic
Cinema owners like iPic hope cushy recliners and good wines can tempt you to leave Netflix for a few hours.

Emma Balter
Posted: February 24, 2017

While millions of people will tune in to see who wins the Oscar for Best Picture this weekend, fewer and fewer are seeing those award-worthy movies in theaters. Industry data shows movie theater attendance has declined in the past five years, even as the economy has rebounded. Too many customers are binge-watching streaming services at home, rather than heading out to the cinema. But a group of theaters—both independents and chains—are taking note and raising the stakes with a simple incentive: alcoholic beverages, including wine.

Theaters have experimented with wine for nearly 20 years, but it's always been more of a novelty than a standard part of the experience. But as owners try to draw audiences back with bigger screens, better picture and sound quality and big recliner seats, some are seeing that wine, beer and cocktails are one way to make a night at the movies more tempting.

"The movie studios were not happy about it [at first], because they wanted the attention to be on the film, and were worried that it would be a distraction," said Patrick Corcoran, vice president and chief communications officer for the National Association of Theatre Owners. "You're seeing that that resistance has gone away." He estimates there are now roughly 700 cinemas nationwide that serve alcohol.

Offering wine and other alcoholic beverages is a major draw for potential movie-going crowds, as well as extra revenue for the theaters. Consider the biggest cliché of date night: dinner and a movie. "What was happening is that half of that revenue or more was going somewhere else, going across the mall or down the street," said Corcoran.

As some movie theaters become a one-stop shop for people's night out, they have fostered a certain loyalty. "I've heard a lot of our die-hard customers say sometimes [that] a movie will be released in Manhattan and other places before us, and they'll wait for us to get it," said Matthew Viragh, founder of Nitehawk Cinema in Brooklyn, N.Y. Nitehawk was one of the pioneers for food and beverage in-theater service in New York and continues to be a leader in this concept. They report that 30 percent of their annual revenue comes from beverage sales.

"Guests are becoming more discerning, so we wanted to make sure we offered guest service in the highest end of entertainment experience you can," said April Mendoza, vice president of sales and marketing at Cinépolis. Part of that is wine—selections at one of their California locations include Meiomi Pinot Noir, Clos du Bois Merlot and Francis Ford Coppola's Director's Cabernet Sauvignon.

Attracting a skilled staff is an added benefit to having a fully stocked bar at a movie theater. "You have people more focused on the customer experience, more focused on hospitality," said Mark Stowe, food and beverage director at Violet Crown, which now has three locations in Austin, Texas, Santa Fe, N.M., and Charlottesville, Va. According to Stowe, guests at Violet Crown regularly comment on that extra level of attentiveness and knowledge at their cinemas. "It's more natural for the staff to act like the staff in a nice restaurant or a nice bar."

Lobbying Politicians for Help

Of course, selling Pinot is more challenging than selling popcorn in one way—the repeal of Prohibition left a patchwork of complex alcohol laws that vary not only state by state, but often county by county. As theater owners look to wine, beer and cocktails, the industry has lobbied legislatures to loosen regulations with the main argument that it stimulates business. Washington and Tennessee have passed laws in recent years, and New York, Virginia and Vermont are currently exploring the idea.

Navigating existing regulations can be exceptionally difficult for movie theaters, especially those with multiple locations. The most common quandary is whether or not to allow alcohol into the auditoriums themselves, although there are many other regulations that can stifle cinemas' ability to exercise their business model.

For example, Mendoza reports that there's a drink limit at a few of Cinépolis' California locations, mandated by county laws. Violet Crown's Charlottesville, Va., location originally opened with a mixed beverage liquor license, but the state's Alcohol and Beverage Control (ABC) ended up prohibiting hard liquor entering the auditoriums. Stowe found that selling craft cocktails to someone eager to get to their seats before previews ended wasn't realistic. "People get stuck with a drink that ends up being a $12 shot! That's not the way I design my drinks." The location now serves only wine and beer.

Individual theaters can lobby for changes, however. According to Corcoran, the best way to do this is to present a clear plan for monitoring alcohol service. "There's a lot of care that goes into developing a plan to convince lawmakers or the ABC board," he said. As demand for premium experiences increases, legislatures have slowly been catching on.

Shortly after the Nitehawk opened in Brooklyn in 2010, and thanks to the owners' efforts, New York theaters were given permission to serve alcohol inside their auditoriums if they also had a dine-in component with a full kitchen attached.

Now, the state is looking to take it one step further. Last month in his 2017 budget proposal, Gov. Andrew Cuomo called on the State Liquor Authority to allow all theaters to serve wine and beer regardless of whether or not they serve food. Viragh feels hesitant about that idea, however: "It's a slippery slope when you just start dropping bars into a dark venue with just popcorn as a sustenance," he said.

Is Anyone Ordering Wine?

Wine has not always been first choice at movie theaters offering alcohol. But some theater owners report increased interest, particularly at the higher-end cinemas and in certain demographics.

Mendoza at Cinépolis has observed regional differences. In California, she says, everyone likes the big Cabernet Sauvignons. In Florida, people tend to order more white wines (and frozen drinks). Stowe also notices demographic trends at his three Violet Crown locations. When the audience skews younger, craft beer will beat any other beverage. However, wine sales go up with moviegoers who are going to see a romantic comedy or a drama.

Bill Norris, the beverage director at Alamo Drafthouse, reports that wine only accounts for between 5 to 9 percent of his food and beverage sales. He identifies a very specific challenge to creating wine lists in a dine-in cinema: "At least half of our guest-to-server interaction is silent. If there's a varietal that's unfamiliar to a guest, we don't have the opportunity to explain it the way you would in a more traditional concept," said Norris.

But some cinemas have seen success by paying attention to their wine offerings. Matt Walker, the beverage director at Nitehawk, has observed a shift as its Williamsburg neighborhood has matured: "Starting out, our sales were very beer and spirits heavy, but our wine category is something that's increased dramatically over the last three years."

The most growth for wine is still observed at the higher end of the industry, tying into overall "premium experiences" at luxury cinemas. "We sell a remarkable amount of wine in the theater," says iPic food and beverage director Adam Seger. "We find that our customers like to treat themselves; they like to be pampered and indulge." He says guests will order anything from white Burgundy, trophy California wine and grower Champagne.

And as movie theaters try to compete for customers' free nights, it's those theaters that offer a premium experience that may thrive.

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