Since the beginning of the pandemic, AMC has pursued a number of unorthodox business strategies that have drawn the attention of the public. These have included accepting payments in cryptocurrencies such as Dogecoin, buying a stake in a gold mining company in Nevada, and partnering with Walmart to sell AMC-branded popcorn in their stores. While these initiatives have kept AMC in the news, the business rationale behind them has been less clear.
This week, AMC announced its next innovation, the launch of an AMC-branded line of candy and concessions that it will sell to patrons at its theatres. Unlike some of the earlier innovations, this one cuts closer to home.
It’s no secret that movie theatres generate a significant profit portion of their profits from concessions sales, and AMC should be able to realize higher margins on their own branded products. It follows the same reason why grocery store chains sell their own in-house branded products… lower costs from suppliers, lower prices to the consumer, and more profit for the business.
In the post-pandemic period, moviegoers have substantially increased their spending on candy and concessions when visiting the theatre. At the same time, candy makers have increased their wholesale prices by as much as 33%. AMC’s Adam Aron said that this got him “thinking very hard about our candy.
And we realized that we could manufacture a private-label brand of candy to very high-quality standards. Price it less expensively than our current candy is priced and have a higher profit margin.” AMC’s sweets and other concessions items are scheduled to arrive in theatres early next year.
See also: AMC Has A Sweet Way To Fix Its Concession Stands (And Margins) (The Street)