Getting into an airport can be a great way to extend your brand. So how exactly do you get in?
When Cinnabon was seeking ways to expand beyond 100 locations 18 years ago, the now-756-unit international cinnamon roll specialist landed its first airport licensing deal. That break in 1991 in Wayne County Airport in Detroit with concessionaire HMSHost, led to today’s collection of 46 express bakeries in airports around the nation, plus 19 overseas.
Cinnabon leads Focus Brands’ growing airport ventures, which include 12 Carvel Ice Cream stands, seven Schlotzky’s Deli sandwich shops and three Moe’s Southwest Grill fast-casual restaurants. Focus has licensing agreements with most of the major airport foodservice concessionaires, including Aramark, Compass Group, Delaware North, HMSHost, Sodexo and SSP America.
Since airport security measures were heightened after 9/11, airport concourses have become even more desirable places for restaurants to open. Suggested two-or-three-hour pre-flight passenger arrivals, flight delays and less food being served on board have benefited airport restaurants, and not just during traditional meal times.
At the same time, the municipalities responsible for running airports are demanding that the foodservice mix include more local or regional restaurants that are icons in their towns. So, sprinkled among the national chains are smaller or express versions of The Berghoff at Chicago’s O’Hare Airport, Phillips Seafood at Baltimore/Washington International and Buena Vista Café, reputedly the birthplace of Irish Coffee, in San Francisco’s airport.
In many cases, local government officials suggest favorite brands to the airports’ concessionaire, which researches these ideas and others. Concepts wishing to get into airport foodservice can be proactive in making that interest known to airport and concession executives.
Leasing concession space is done through a request for proposal bidding process. For example, The Chicago Department of Aviation posts notices on its Web site when locations at its two airports become available, compiles a database of respondents and notifies applicants when an RFP relating to their services is issued, explains Karen Pride, department spokesperson.
“We promote store concepts, themes and products identified with Chicago to highlight our world-class city and to optimize concession revenues,” Pride notes.
Cinnabon snagged that first airport deal after executives attended a brand development exposition “to get the brand in front of decision-makers,” says Steve Corp, VP of franchise sales and development for Focus Brands. The company continues to attend conventions such as those held by the American Association of Airport Executives.
Having the right connections doesn’t hurt either, as witnessed by Rock Bottom Brewery’s sister concept, Denver Chop House & Brewery. None other than the mayor of Denver referred his favorite chop house, which was the site of high-profile events including the Super Bowl and Stanley Cup private parties, to the Denver International Airport concessionaire, notes John Hyduke, Rock Bottom’s VP for franchise license services.
Some local icons may not travel particularly well to airports outside their home base, but many do. Baltimore’s Phillips Seafood, which is regionally popular in the Mid-Atlantic, is now in seven airports, some of which have introduced Phillips to new markets, says spokeswoman Honey Konicoff. Wolfgang Puck Express, which now has close to 40 airport units, was considered a local brand when it secured its first licensing agreement at Los Angeles International.
A local company just taking flight, Bartolotta Restaurants of Milwaukee, Wisconsin, expects to debut its beachside burger-and-custard stand prototype, now called Northpoint Snack Bar, in Milwaukee’s General Mitchell International, where it opened its Nonna Bartolotta’s trattoria last spring with SSP America.
Patrick Carroll, SSP’s Sr. VP for business development, initially got a recommendation for Bartolotta from a friend in Milwaukee. “I shopped some of the local restaurants; we look for those boutique groups that deliver quality to our environment and are interested in that kind of growth,” he says.
“You have to be able to adapt your product to a venue like an airport without reducing your standards,” he adds. For example, speed of service is more crucial, sometimes requiring menu adaptations.
The fast-casual burger-and-custard stand “is easy to replicate,” says Joe Bartolotta, operating partner. SSP also sought out Milwaukee-based Alterra Coffee Roasters and operates three of those units at Mitchell.
“There is a certain amount of luck involved in being in the right place at the right time,” says Carroll, who constantly fields information from interested restaurant operators who contact SSP through its Web site.
Concessionaires pay much higher build-out and operating costs in airports, led by labor, than operators pay in typical non-airport locations. Many airports are unionized, and higher pay scales also compensate employees for transportation hassles of getting to and from work and reimburse for parking.
HMSHost, which operates in 76 airports, and other concessionaires pay for employee background/security checks, required in all airports. Host also offers health care and retirement plans.
“Employees are tougher to get because of transportation issues, security clearance, taking a train to the terminal. There’s more turnover because of these hassles,” says Corp of Focus Brands.
Host’s Bill Casey, VP of operations, disputes the turnover issue, saying that its rate of 50 to 60 percent is much lower than the average 100 percent rate on the street. He also claims that food costs, which can be higher due to increased delivery charges, are decreased by Host’s volume buying discounts. Plus, restaurants are allowed to charge more for their products than they would in non-airport locations—up to a certain percentage, set by the airport—to make up for increased operating costs.
The ability to sell food and beverages all day long also benefits airport restaurants. Many concepts have developed breakfast dayparts they didn’t previously have. Those that sell alcohol often are busy during normally slower between-meal times, says Jamie Parton, VP of operations for Gordon Biersch Brewery.
The grab-and-go business has grown for brands such as Wolfgang Puck, especially among passengers seeking food for their flights. “As waiting times have increased, it’s boosted a lot of sales across the board,” says Puck’s David Gallucci, director of licensed businesses.
“Wolfgang really wants to be able to reach people with his food,” he notes. “He can reach people from all over the world this way. It’s a good way to grow.”