Popcorn popped at home never tastes quite as buttery as the theater variety while the lap-burning box of nachos or Malteasers paired with savory snacks are for some people an inextricable part of going to the movies.
While these associations and food cravings are often artificially created, they both help get people through to go out at a time of endless streaming content and provide a steady stream of income for the theaters — popcorn, in particular, is sold at a markup that in some places can reach over 1,000%.
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In his company's May 8 earnings call, AMC Entertainment (AMC) CEO Adam Aron said that the movie theater chain would be significantly reworking its candy aisle with this profitability in mind.
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AMC Is 'Thinking Very Hard About Candy'
The biggest change will take the form of the new AMC private-label candy that will soon be sold alongside popular brand names like Reese's and Sour Patch Kids. After some of their candy suppliers started charging AMC up to 33% more in the last year due to inflation, the movie theater chain decided to beat them at their own game and start making the candy themselves.
"That got us thinking very hard about our candy," AMC Theatres Aron told investors in the call of the price increases. "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 because our cost to manufacture the private-label brand is so much less than the normal brands that you've seen in our previous three years."
That, Aron said, will allow the chain to "offer [the candy] to a consumer at a lower price" and reap more of the profits by eliminating the supplier.
As first reported by food site The Takeout, the chain is currently hard at work creating the candy and could have the first bags on the shelves as early as the end of 2023.
Aron did not go so far as to say what type of candies AMC would make, but they would mimic some of the types most commonly found in the theater snack counter. The brand-name versions would still be sold alongside the private label for those willing to pay more for a particular favorite.
Amid the rise of streaming platforms and a slow post-pandemic return to theaters, profitability is increasingly important for many chains — while AMC shares are up nearly 36% since the start of 2023, they are still 52% lower than they were last year.
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A cheaper candy option will, Aron and the chain hope, improve sales by luring in those who skip buying it entirely due to high prices.
In March 2023, AMC also partnered with Walmart (WMT) for an exclusive line of microwave and ready-to-eat popcorn. Each cost a respective $4.98 and $3.98 plus tax and has already been seeing some success for those theater snack fans who want to enjoy them without shelling out $15 for a ticket and trekking to the theater.
Many Walmart stores, according to Aron, have already "sold out of their initial supply."
"We think that our home popcorn is going to turn into a substantial business for AMC," he said during the same earnings call.
