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Tuesday, April 19, 2016

Pour Some Sugar On Me

Every comic or hobby game trade store worth its salt these days, lease not prohibiting, sells snacks and beverages in order to monetize the presence of gamers in the room during organized play.  Rather than exploring the theory of it, I thought this article would be a neat place to look at logistics.  I don't think I am necessarily "doing it right," but I am doing a lot of parts of it as optimally as my resources will allow.  And by "resources" this time I really just mean facility space, because the overall cost of concessions is trivial.  My full load of concessions on the premises is about $700 in cost at any given time.  Probably $500-$525 of that are beverages, while the remainder are snacks.

I bought a merchandiser refrigerator so we could store whatever we wanted in it.  Beverage vendors will provide a free merchandiser if you ask, but you have to meet minimum order requirements at their pricing, which is not always great, and you cannot store a competitor's drinks in their equipment.  In the early going, DSG had fully three refrigerators: one from Pepsico, storing Pepsi, Mountain Dew, Gatorade, Rockstar, and Starbucks; one from Hensley/Kalil, storing Monster, 7-Up, Dr Pepper, and not much else; and our own, storing Coca-Cola products, water, and miscellaneous.  The volume level to keep draining those refrigerators never materialized, and the utility bill socked it to us.  To this day I don't need more than our single fridge.  A larger one will probably be needed once I have enough physical space to run a lot more organized play.
The above photo is from last summer and is not significantly different from what we're doing now.  There has been some optimization of drink flavors, as you'll see below.
This spring you see the above in that space, and it is indeed very similar.  Here is the candy rack now:
 
The current candy rack is small, but sufficient.  Would I like a gigantic candy rack like at the Circle K?  Of course.  But I don't have that kind of floor available to devote to it, and the rack you see there is refillable by staff within the turn speed we typically observe.

Bottled water is, of course, the nut high.  Cost is minimal and it's good for 75 cents each time, and players want it more than any other beverage.  At least, that is fully true in sunny Arizona.  There might not be an amount of bottled water that is "enough" for a game store deployment.  Water and soda alike are mostly sourced through Sam's Club.  I am not a fan of Wal-Mart, but money talks, and time is money also.  I get good pricing, a resale sales tax waiver, and a mobile app that lets me place my order the night before and have it waiting at the dock for me when I get there.  They even take American Express, so I earn points.  My second source is Pepsico Direct, despite their poor pricing at my volume tier.  They do deliver, and they have a lot of exclusive flavors, such as special Mountain Dews and Kickstarts.  It's worth it.  One of the business partners goes the extra mile for other sourcing, roaming the town for special soda deals from Smart & Final, Restaurant Depot, Walgreens, and so forth, and loading up when he finds them.

Energy drinks are tremendously popular and sell briskly at $2.50 per.  The various flavors of Monster turned out to be too many.  Monster "green," the original flavor, outsells everything else by a lot.  Monster Lemon Citron is a limited-time flavor that doesn't hold much demand, so we phased it out in favor of the Orange Sunrise, not shown in that photo.  The orange soda flavor profile is a consistent winner, while lemonade is hit-and-miss.  I do still have a few cases left of Lemon Citron, but I won't replenish them.  The red and blue Monster are sold in a Neapolitan pack with Ultra Zero (white can) at Sam's Club, but Zero is also available solo, and is the best seller of the three anyway.  I discontinued red and blue.  There is a new Black Zero flavor out that we're trying, as you see in only the newer photo.  Customer feedback indicates it tastes like battery acid.  How they know this, I can only guess.

I am the only person who drinks Rockstar Recovery, so we moved the Orange to the employee fridge in the back room and discontinued the lemonade entirely.  I am post-bariatric so I don't drink anything carbonated.  RRO gives me that caffeine kick I unfortunately keep craving, while sparing me the stomach-stretching agonizing pain.  It appears that the rest of my customer base is under no such limitation, because aside from water and coffee, they have only ever consumed the bubbly liquids.  Rockstar Recovery Grape was the greatest beverage ever made, as this review will clearly explain, and has passed into history to the land of wind and ghosts.

I do carry Monster coffees now (Mean Bean and Loca Moca), but they sell poorly.  The Starbucks Doubleshots with Protein that you see on the ground floor were mostly popular with ownership and staff, so I only buy them now when I need to fill a Pepsico Direct minimum order.  Canned cold coffee is never going to hold a candle to a properly brewed mug, and maybe that's what will finally impel me to move into the coffee bar business down the road.  But it's a flavor profile that I have found you need to have at least one of.  The glass Starbucks bottles spoil too quickly as they are mostly milk.  I just buy whichever canned coffee Sam's Club has that month.  I also brought in AriZona Iced Tea, which is a consistent winner by virtue of cheap price and large volume.

Surge!  I buy this from Amazon when it's in stock in Prime Pantry, and mark it up not really keystone (given the Pantry shipping charge).  Despite this not being the most profitable drink to sell, it is popular and players love it, so I keep it around just for happiness value.  Five senses, five ways to make people love the business.  IKEA doesn't pump that vanilla spice through the air ducts by accident, people.  And if I'm the only place in the local orbit with Surge on the shelves, that forms a sensory and emotional association with DSG and having fun.  People crave that endorphin release.  I guess I'm a drug dealer of sorts after all.  Please don't hate me.

Twelve-ounce sodas, which I run at a dollar a can, start with Mountain Dew.  You need the green regular Dew in quantity, and you must never run out.  Diet Dew will sell modestly but consistently.  The rest?  Open season, try whatever you like and there are few ways to fail.  The special flavors, some of which are direct exclusive and others of which are found on store shelves like any other soda, are popular across the board and I stock as many as I can round up.  It looks like this photo was taken when Sam's had Code Red and the Kickstart main flavors, and distribution had Baja Blast, High Voltage, Pineapple, and Cranberry Whatever-that-was.  Oh, and the bottles of Game Fuel, always popular.  I also look for Throwback, Live Wire, White Out, and Pitch Black, when available.  Dewshine seemed like a good bet earlier this year, but I'm still sitting on cartons of it.  Kickstart Midnight Grape was fantastic but appears already to have disappeared from distribution.  I do have a little bit left, as you can see in the newer photo.  I also brought in Red Bull to serve its niche but consistent following.

The regular sodas are a little more pedestrian.  Diet Coke and Diet Pepsi are never both necessary; they sell slowly if at all, and we've stuck with zero to one rows of Diet Coke lately, mostly just in case Kelly Powers walks in.  Pepsi Throwback tastes about 73 times better than regular Pepsi (all figures approximate) so we roll with that.  Coca-cola and Coke Zero are mandatory flavors.  Never run out.  Just don't.  Same goes for Dr Pepper, the single best-selling soda beverage in the building.  Diet Dr Pepper outsells the diet colas and is almost on par with Diet Dew.

The Kool-Aid was an experiment that didn't go too well; it's gone.  The Gatorade sells like mad during the summer (which in Phoenix runs from March through October) and is not touched during the desert winter.  And tucked away on the far left is Mexican Coca-cola, which if you can drink it, is the superior cola beverage of all.  We've since returned to offering Mexican Fanta and Sprite, and all of them sell, but mostly the Coke.  The newer photo shows those as well as some bottled Sprite and Mt Dew, both of which we bought upon good opportunity.

Over on the snack rack, we've had trial-and-error for quite a while ongoing, and it's trickier because things spoil.  From the earlier photo I am seeing Hostess Twinkies and Cupcakes, both of which I only carry sporadically and only when they first appear at Sam's Club, because they expire faster than I thought and that spoilage means loss.  (Even though we all know the Twinkies are probably safe to eat a century later.)  The memory of dumpstering six or seven cases of Twinkies burns brightly, and stays my hand when I consider doing more with them.

I also dropped chips (Fritos, Doritos, Ruffles, etc) because they take up too much space for what they earn, they rack messily, and they sell slowly.  You'd think there would be more demand for savory snacks, but apparently not.  On the non-chocolate candy side, I've had various Skittles flavors from time to time, and they don't go bad for eternity, but their sales aren't the best.  I'll still bring them back once space is available.  For now I offer Skittles, Hot Tamales, Jelly Belly, and Mike & Ike in the candy machine, as the newer photo shows.

The photo has us out of Snickers, which I always carry.  Must have been a replenishment week.  (The newer photo has them all the way at the bottom barely shown in the frame, but I assure you, they are there.)  M&Ms are also a perpetual winner, as are Twix and Reese's Cups.  All other chocolate has failed to gain any traction, so I shed it from the line-up, and only include it now when we are able to procure some at a really great price.  Special M&Ms flavors like peanut butter and mint chocolate are also good sellers when you can get them.

Oatmeal Creme Pies are a spoilage risk but one I think is worth it, as their turn is fast and I can't remember any recent disposal necessary.  The opposite happened with Grandma's Cookies, which failed to sell through.  The Sam's Club Donuts (chocolate or crunch only, you don't want powdered sugar all over cards and merchandise) are so popular we've never had any spoil.  You can't eat them all though, they are like 480 calories per pack.  No wonder gamers struggle to maintain weight.  Finally, the Nabisco cookie and cracker snacks are solid sellers, except for the Ritz Bits, which move slowly and get spoiled out periodically.  Mentos are practically currency.  And ye gads, don't even think about gum.

One thing you may notice I don't carry is healthy fare.  I tried moving even slightly in that direction with muffins, granola bars, energy bars, etc, and gained no traction.  This might be a place where a focused store could do better; I don't doubt that being in a plaza with a huge grocery store and multiple restaurants has had some impact on whether anyone is going to seek non-sugary refreshment in-house.  There would also be the constant disposal of produce if I went that way, though by itself that's not a deal killer in my mind.  Fresh food generally did not move.  Cupcakes, cookies, and so forth.  Straight from my wife's oven to the snack counter, mmm-mm good.  For whatever reason, buying that stuff simply did not happen.  That was very early in our tenure, though, and we might have greater confidence from customers today.  Especially if the coffee bar thing eventually proceeds.

Whatever you do with edible concessions, I hope you are able to gain some notes and ideas from the foregoing.  I am always on the lookout for the next special thing I can bring in that will get a player interested.  It is completely legitimate to stick to the old standbys if your sourcing is limited: Coca-cola, Pepsi, Dr Pepper, Mountain Dew, Monster, Gatorade, and whatever coffee drink you are feasibly able to procure.  Snickers, cookies, donuts, and one candy flavor that appeals to you.  You're off and running, and likely to turn good revenue.  But making your concessions offering something special, that gives your brand extra reach, and it's not that difficult to add some flavors and expand just a bit off the beaten path.  On the other side of the coin, if you are in a position to go full-on coffee bar and serve prepared edibles, it is absolutely worth considering, as the profit margins are healthy and the ongoing costs tend to be minor once you've recovered from the expense of the initial capitalization.  Plus, that mug of cappuccino probably tastes a lot better.

3 comments:

  1. Chips do really well for us with proper merchandising - we found (somewhere...I honestly have no idea where they came from anymore) 4' tall clip racks that hold 60+ bags of chips...threw it on a lazy susan and bam, rotating effective chip display. We source our chips at Sam's and sell em for $1.00 after tax all day every day.

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  2. The shop I played at in college was a part coffee shop. Called the Imagination Shoppe, it opened as coffee shop/Internet cafe with a focus on offering high end gaming PCs and pay-to-play console games. Shortly after opening, the owner discovered the treasure trove of income that was Magic. Plus it was a college town and there were no other places, at the time, that offered FNM.

    From what I understood, the coffee never took off. Too many college students already had a favorite or if not, the coffee on campus was cheap and convenient. Likewise, the PC stuff never did much. The area for them slowly downsized.

    Magic proved to be great for the shop at first. They offered packs at $3.50, below the only other place in town that sold them. And bein sanctioned FNM beat out the club on campus that did unofficial stuff.

    However, they played with fire. The other nerd shop I town, which sold all kinds of other nerd stuff, quickly dropped their pack prices to $3 and signed up to offer FNM. The Imagination Shoppe lasted the year but when the students left for the summer, their revenue dried up and they were closed before the next school year started.

    So it goes, I guess.

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  3. Thank you for writing this out. I found it strangely compelling.

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