It’s the middle of the afternoon on a workday — not quite peak lunch hour, yet the new, massive Topgolf in Louisville, Ky., is packed. Nearly all of the hitting bays throughout the three-floor facility are filled with consumers across demographics who are either there to celebrate something, or just because.
The building and driving range are flanked by two huge parking lots, and there’s a pro shop immediately upon entry next to the check-in counter. The first-floor bays are located through automated doors straight ahead, while a bar/seating area is tucked out of the way, but not out of sight. Music plays loud enough to tap along, but not too loud to compromise conversations. Topgolf is all about socializing, after all.
Helping to facilitate that social environment is a menu filled with appetizers and shareable plates, plus an extensive drink list. Some locations even have specialty drink menus. In Louisville, that’s a bourbon menu with options such as Maker’s Tipsy Palmer, a cookie butter old fashioned and a peach whiskey tea. The menu changes three times a year to reflect seasonality and makes up 50% of the concept’s sales.
At this particular Topgolf, the food is created in a second-floor kitchen and delivered to the 102 golf bays by about 130 servers per shift. The draw for this crowd is both the activity — a driving range and some other digital games — and the menu, and the concept simply wouldn’t be the same without either. They are yin and yang.
That’s not just the case at Topgolf, but across the entire eatertainment category — a category hit harder than most by the onset of Covid, but one that’s more than proving its resiliency three years later.
Driving the resiliency: demand and Gen Z
Of course, the eatertainment category is nothing new. Chuck E. Cheese first opened in 1977. Dave & Buster’s opened five years later.
But the space is particularly hot today — and becoming quite crowded.
Driving much of this growth is simple pent-up consumer demand. As it turns out, two years is far too long for the American consumer to go without consistent access to experiences. Even in a historic inflationary period, consumers are proving how badly they want to get out and socialize and play and eat together.
“The biggest opportunities always present themselves through great moments of upheaval,” said Robert Thompson, the CEO of Angevin & Co. who founded Punch Bowl Social in 2010 on the heels of the Great Recession. Thompson stepped down as Punch Bowl’s CEO in late 2020 and is now eyeing a new eatertainment concept: Camp Pickle, a pickleball brand set to open its first location in 2024, with 10 other units planned to open shortly thereafter.
Thompson calls the eatertainment category “the most disruptive force in the industry since the launch of fast casual” and believes it is now poised for significant growth after those Covid-related challenges, which drove Punch Bowl Social to bankruptcy in late 2020. Driving that growth? Younger, experience-craved consumers. A recent YouGov survey finds that over 70% of Gen Z consumers want a tailored experience, for instance, and preferably one that is enhanced by digital components.
“We’re in a moment where Gen Z is putting its stamp on this category and we’re trying to forecast that the same way we were doing with millennials in 2010,” Thompson said. “From their perspective, things like design-forward, scratch cooking — that’s baseline. There’s a new baseline: They want self-service and technology. They don’t want to flag down a waiter to get what they want. We’re in the middle of a new iteration of this category.”
According to Datassential, this new iteration could make 2023 a very big year for the category. The company notes, “humans are social creatures and need a third place — a place beyond home and work — more than ever. A new generation of restaurant, retail and eatertainment concepts can fulfill that need for a place to get work done, go on dates, engage with the community, and have a meal with friends and family. … After a few sobering, serious years, it's time to get a little weird and playful again.”
To do that, Camp Pickle is moving toward counter service (lowering its labor costs in the process) and developing “pour walls,” with 40 draft beers, 16 wines and up to 15 craft cocktails available from self-pour stations. It is also offering the fastest-growing sport in the U.S. in pickleball, as well as other activations like private karaoke rooms and a dart lounge.
These types of activations not only satisfy a demand for experiences, but they also feed the social media beast, which is why concepts have evolved their activations well beyond arcade games and Skee-ball to golf, pickleball, ping pong, bowling, and even ax throwing.
Activations have been a draw for Puttshack, a tech-infused mini golf concept with holes that include life-size beer pongs, air hockey, roulette and more. Puttshack CMO Susan Walmesley notes that the brand’s objective is to attract a younger demographic with these courses, and its design-centric atmosphere and curated playlists are meant to inspire TikTok and Instagram posts.
Games are just part of the equation, however; tailored experiences also include elevated levels of service. Hollie Patierno, director of operations at Topgolf, said her concept is wildly popular for birthday parties and corporate events, but the facility doesn’t just offer the space — staff members, from servers to managers, are tasked with checking into each bay as they’re able to.
“This is a differentiator for us. We want to connect with people. We want to celebrate with you. Everybody signs your birthday card. There are balloons and megaphones,” she said. “We want to make sure you’re going to remember this experience and that it’s more than what you’d get just going to a restaurant. As long as we continue to focus on service and hospitality and delivering memorable experiences, we’ll stand out in the crowd.”
If you want to attract experience-hungry, younger consumers, having an Instagram-worthy environment with tailored service and popular activities like golf and pickleball is a good place to start. A recent Morning Consult survey found that 54% of Gen Z consumers spend at least four hours a day on social media.
The menu becomes a bigger priority
While exciting and inclusive activities may drive consumers in the door, the menu helps to keep them there. The combination of both is the sweet spot for the category’s latest iteration as it quietly takes market share away from the casual-dining segment, according to M Science data.
Consider Dave & Buster’s, for example. The concept, which recently acquired fellow eatertainment concept Main Event, created a new menu that has helped drive business back to pre-pandemic levels. During the company’s third-quarter call, CEO Chris Morris said there is strength in the business across all demographics, including an especially challenged lower-end consumer.
Matthew Goodman, an analyst at M Science, believes more consumers are spending their dollars at eatertainment concepts versus, for example, movie theaters because of the successful marriage between food and fun.
“From a sales perspective, our data shows concepts like Dave & Buster’s and Topgolf have been outperforming the broader casual-dining segment,” Goodman said. “While eatertainment is likely to be pressured by any additional financial pressures on the consumer or a worsening macroeconomic backdrop, we also think these concepts could benefit from some trade-down within the broader entertainment space. A night at Dave & Buster’s is likely less expensive than other options, such as sporting events or live music, and less consumer spending at movie theaters could also be freeing up dollars for eatertainment concepts.”
Thompson’s experience running eatertainment concepts supports this belief. He said Punch Bowl Social generated 89% of its sales from food and beverage during his tenure, yet that side of the business isn’t as profitable as the activity piece, so it has historically been deprioritized. That is changing as consumers become more sophisticated about menu offerings and more discerning about where they’re spending their money.
“I’m still just developing restaurant and bar concepts and using entertainment as mouse trap,” Thompson said. “If you don’t lean into the food and beverage piece, don’t expect to expand your average unit volumes. You can make 50% profit on $2 million with the activations, or 23% on $7.5 million. I’ll take the latter, and that’s what we get by leaning into the menu.”
Thompson adds that he’s a restaurateur at heart and will translate that experience to Camp Pickle with a menu that features wood-fired cooking with Mexican influences. It’s worth noting that Camp Pickle won’t be the only concept in the pickleball/eatertainment space, and it certainly won’t be the only one with a sharpened focus on the food and beverage side of the business. Chicken N Pickle is now open in six locations, with six more in the works for 2023, while Electric Pickle is open in Miami with a handful of locations under development and Smash Park has two locations open with two on the way. Each concept features extensive scratch-made menus on their websites.
Meanwhile, Puttshack touts its “tech-infused mini golf experience” alongside its “world-class cuisine,” with options like wood-fired Thai octopus, Mediterranean lamb skewers and chorizo and cheese empanadas. There are also signature cocktails, like the ultimate top shelf margarita and the cold brew espresso martini. Like Topgolf, about 50% of the concept’s revenue comes from food and beverage.
Punch Bowl Social offers an arcade, duckpin bowling, karaoke, foosball and more. At its core, however, it is a restaurant that uses gaming and activities to drive food and beverage sales, with offerings like boozy brunch drinks, housemade naan bread, cauliflower nachos, steak frites and cocoa dusted carnitas. The recent launch of its first Agave Room, located in Rancho Cucamonga, Calif., will lean even harder into the brand’s “scratch and craft DNA,” according to a spokesperson. More such locations are in the works with an objective of elevating the food and beverage experience inside existing Punch Bowl Social locations.
With due respect to the category pioneers and their pizza and pub-grub menus, it’s clear this current iteration of concepts is placing a greater emphasis on the “eat” part of eatertainment.
What’s next for eatertainment?
It’s hard to predict what comes next with this iteration, however, particularly as the macroeconomic environment remains uncertain. For now, one can tell there will be more concepts popping up, and eventually there could be a shakeout.
But in the near-term, the category appears positioned for robust growth and those that continue to innovate and differentiate and focus on the entertainment alongside the food will be positioned favorably.
Topgolf, for example, has just over 80 locations with about 10 in the pipeline for 2023 and plans to open 10 each year over the long term. Puttshack first opened in 2018 and recently raised $150 million in capital to fuel growth, with plans to grow from five U.S. locations to about 17 in 2023. Walmesley hinted that the team is also working on a “never-before-seen gaming experience” that will debut in Texas in 2023.
Punch Bowl Social is also expected to return to growth in 2023, following its pandemic-induced bankruptcy in late 2020. And it plans to introduce a “variety of entertainment options to enhance the social aspect of the Punch Bowl Experience.”
These plans come despite predictions of an economic downturn and pressured consumers. Goodman believes that could impact discretionary spending at such venues, but the operators themselves feel far more optimistic.
“Even in difficult economic environments, consumers continue to seek out quality entertainment experiences with a potentially greater emphasis on value,” said Punch Bowl co-CEO Robert Cornog Jr. “By providing a variety of high-quality experiences and presenting them in an ‘a la carte,’ consumer-centric manner, Punch Bowl can be a ‘value’ option for consumers across a variety of price points.”
Thompson also believes that the definition of value has tilted in eatertainment’s favor.
“I’ve been through a number of recessions in the past 25 years in the eatertainment space, and the one thing I’ve seen is that even during downturns, the consumer always leans into spending a little more on experiences — getting food and beverage and fun at the same time and doing it at a lower cost than a vacation,” he said. “It just becomes a transmutation of dollars, and they end up splurging more at one of these venues.”
Contact Alicia Kelso at [email protected]