EMERGING Fund

Business Eatertainment booms as result of perfect storm…..

From cricket to curling, and ping pong to pickleball, restaurant concepts that combine eating and drinking with fun and games are booming.   Shut people at home for a while and it’s inevitable they will eventually want to come out to play.

That’s what has fueled a post-pandemic boom in eatertainment concepts over the past two years that is resulting in a growing array of eating-and-drinking venues with a heavy emphasis on fun.

Some call it the experience economy. There are longtime favorite activities, like bowling, shuffleboard, mini golf, and arcades. But this new wave of eatertainment is also bringing a host of new games to the table, such as cricket, surfing and even curling.

Investors, like the new Chicago-based EMERGING Fund launched by veteran operators like Randy DeWitt of FB Society and Adam Breeden of Puttshack and Flight Club, also see an opportunity. The fund is looking to invest in small, experiential brands, like Breeden’s F1 Arcade, which features auto-racing simulators, and another baseball-themed concept not yet revealed.

Ron Shaich, the former CEO of Panera Bread who now chairs Act III Holdings LLC,  is also high on eatertainment. Among Shaich’s investments is the new Level 99 in Boston, a destination for “challenge-based entertainment” that involves working your way through various art installation/puzzles.

Shaich, in a recent episode of A Deeper Dive, described it as a powerful concept with lots of potential.

“It’s 40,000-square-feet in an old Sears. It’s got these 40 challenges. It’s got a farm-to-table restaurant. It’s got a brewery in the middle of it,” he said.

Since the second half of 2022, interest in eatertainment concepts has swelled compared with other segments in terms of visits year-over-year, according to traffic tracker Placer.ai.

Visits to eatertainment concepts in January 2023, for example, were up more than 20%, while other segments struggled to see traffic growth over 5% that month, Placer.ai found.

In a recent report, the research firm highlighted Dave & Buster’s and Main Event Entertainment, which merged last year, as brands to watch. Both have seen elevated traffic over the past year through February, compared with 2019.

Both Bowlero (a bowling concept) and Topgolf are two other eatertainment brands that have seen traffic growth over the past three years, indicating hunger for these concepts is strong, Placer.ai said. Bowlero’s traffic was up nearly 20% in February, compared with 2019, and Topgolf was up more than 22%.

Pickleball, which is said to be the fastest-growing sport in America currently, has shown particular promise in gathering consumers of all ages together from dawn until well past dusk for playtime and socializing with food and drink, generating all-day revenue.

Chicken N Pickle was one of the first to debut in 2015 in Kansas City, and in 2022 the chain saw systemwide sales of $21 million with seven units, up more than 51% compared with the prior year.

Now new pickleball-and-dining concepts seem to be opening daily, with many snapping up big box real estate left empty by failed retail chains like Bed Bath & Beyond.

And technology brings an updated twist to many activities. The ping pong-centric Spin, for example, recently opened a glamorous venue in Midtown Manhattan, which features a robotic arm called “Spinny” that is said to be the first AI-driven ping pong opponent.

Golf has been made new again by concepts like Puttshack, which pairs modern technology with somewhat crazy courses. Puttery, which expects to reach 50 units by 2024, offers an “immersive mini-golf experience” with cocktails themed for each course. Tiger Woods is reportedly behind the putting-focused concept Popstroke, which launched in 2018 and now has eight units with two more planned this year.

A former Topgolf executive, meanwhile, is reportedly placing bets on surfing with the new GoodSurf, which features wave pool surfing and a restaurantand beer garden in Dallas, scheduled to open next year.

Larks Entertainment, created by Altitude Trampoline Park founder Curt Skallerup, is a franchise concept offering “a la carte” options for active family entertainment, including shuffleboard, putting, obstacle courses and more.

Robert Thompson, founder of the break-the-mold eatertainment concept of the pre-pandemic era Punch Bowl Social, is now growing both the pickleball-focused Camp Pickle (scheduled to debut in Colorado next year) and Jaguar Bolera, a duckpins concept that will also have pickleball, karaoke and other games. The latter is scheduled to debut in Raleigh, N.C. next year, and Thompson says there are more of both in the pipeline for development.

Thompson, an eatertainment specialist, said the boomlet within the niche is in part the result of post-Covid wage and inflationary pressures, which have been “steadily rising like a bathtub you forgot was turned on.

“Eatertainment labor costs are lower and the amusement side is 80% profit,” he said. “When you combine casual dining’s intense cost pressures with what is now more than a decade of consistent psychographic data stating modern generations have an appetite for experiences and will spend more to dine with them, it’s created an eatertainment perfect storm.”

Still, development costs are higher for an eatertainment venue, compared with casual dining, he notes. But that creates a competitive moat around the niche that can be an advantage.

“If you can capitalize an eatertainment venue, statistically you have a superior chance for success versus casual dining success rates,” he said.

*iPhoto courtesy of Spin

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