Why do cinemas sell popcorn?
For almost a century popcorn has undoubtedly held its position as the king of all cinema snacks. To many, the rich buttery smell and faint trail of white crumbs on carpeted floors are synonymous with the big-screen experience. But how did popcorn rise to this prominence, and how has it maintained its position for so long?
The art of popping corn was first perfected in South America where maize is, of course, a common staple. Interestingly, the popped kernels were historically also used as decorative headdresses, as discovered in an ancient Mexican drawing dating back to 300 A.D. Early colonialists developed a liking to the snack and helped spread it through the Americas. Appearing in stores and concession stands throughout the region, popcorn quickly became one of the most popular snacks of our time.
Popcorn to the People
Things really took off when Chicago inventor Charles Cretors patented his mobile popcorn machine in 1893, which could be easily wheeled to circuses, picnic grounds, political rallies and other any location that promised good business. Cretors’ steam-powered invention allowed popcorn to be reliably mass-produced without much skill required from its operator. It’s transparent window allowed early patrons to marvel at the excitingly satisfying show of corn popping — a brilliant marketing move and a 19th century Instagram moment.
In his book Popped Culture: A Social History of Popcorn in America, Andrew Smith explains that early cinemas wanted nothing to do with cheap-snack popcorn, instead trying to promote the plusher upper-class feel of theatres. Pressure grew in 1927, however when Warner Bros. released The Jazz Singer, the first full-length feature sound film with synchronised speech. This lead to an explosion in cinema attendance, which reached 90 million per week in the US by 1930. Movies now became accessible to a much wider audience as literacy was no longer required to follow the narrative. Popcorn vendors armed with Cretors’ mobile carts quickly responded to this hockey-stick growth by parking themselves outside cinemas to catch the stampede.
As is always the case in human history, many cinemas were initially reluctant to popping corn, with some even requiring that the snack be checked-in with guests’ coats. During the Great Depression, however, when popcorn further sealed its position as an affordable luxury, cinemas were forced to move with the times; first by licensing popcorn vendors to sell in cinema lobbies and eventually by starting to sell the white gold themselves.
Popcorn Economics
Financial investor Guy Hands puts it best by describing today’s cinema “not as a film business, but rather a popcorn-selling business”. By 1945, cinemas were responsible for over half the popcorn sold in the US — forever changing the economics of the business itself. Enterprising cinema operators started to widely expand their offerings of sweets and snacks and marketed them heavily as a quintessential part of the movie experience. Today, the average cinema is estimated to make around 40–50% of its profits off of concession sales. On average, popcorn is estimated to be sold with an 85% profit margin, which explains how US cinemas can afford to provide endless refills by the bucketload.
Today, the average cinema is estimated to make around 40–50% of its profits off of concession sales. On average, popcorn is estimated to be sold with an 85% profit margin.
In a true act of “taking one for the team”, Michigan moviegoer Joshua Thompson filed a class action lawsuit against AMC Cinemas in 2009 on the basis that he was charged $8 for a pack of sweets and a Coke, which would have cost him $2.73 at a regular store. While understandably frustrating, there is actually an economic justification for this seemingly cannibalising markup. Charging excessively high prices for popcorn and sugar water to those who are willing and able to pay, helps to keep ticket prices low and accessible to a larger portion of the public (Source). Put simply, if popcorn was sold cheaper, cinema tickets would become more expensive.
Sorry folks, it looks like we will be stuck with expensive cinema popcorn for the foreseeable future. However, with margins like these, maybe it’s time to consider getting into the business.
