Newport Beach-based leisure parks operator Palace Entertainment Inc. has doubled food and beverage sales in seven years, the company said.
The Business Journal estimates that the company has hit $70 million in such sales, or just less than 25% of an estimated $300 million in annual revenue.
Albert Cabuco, Palace’s vice president of Food and Beverage, said he credits the increase to national suppliers, better quality, and “centralized everything.”
When he joined Palace in November 2007, the company had several suppliers each for chicken and hamburgers.
“At one point, we were making our own pizza dough,” he said.
Three Steps
So Cabuco signed national suppliers that include Hebrew National for hot dogs, Tyson Foods Inc. for chicken, and Breyers for ice cream.
A second step came when Palace began signing as a franchisee of restaurant chains that include Aliso Viejo-based Johnny Rockets Inc., Carpinteria-based Carl’s Jr. Restaurants LLC, and Hollywood-based Pink’s Hot Dogs.
The third phase will come in refining food and beverage processes, bringing parks that Palace buys into its national programs, and identifying specific parks for market-based changes.
Such efforts bring more than 50% of the division’s revenue to its bottom line, Cabuco said.
“It’s a complete transformation of food and beverage operations and administration.”
Quality, Distinction Aim
Palace runs 23 amusement parks in 10 states, including water parks, animal parks and family entertainment centers.
Parks nearest Orange County are Raging Waters in San Dimas, Castle Park in Riverside and a Boomers entertainment center in Vista.
It had 38 sites prior to its September sale of 15 entertainment centers to Aliso Viejo-based Apex Parks Group, which is run by former Palace Chief Executive Al Weber.
Palace said the sale would help it focus on the higher-echelon offering of gated parks. The company also operates historic parks—some more than a century old—and regional sites that command top spots in their markets.
Its focus on distinction also translates to the food—Cabuco said he aims for quality without losing on price.
“With 150,000 pounds of hamburger, you get the best product and still get a good deal on volume,” he said.
He points to the Hebrew National and Breyers contracts as examples of a quality focus.
Cabuco said that even the cooking oil for French fries is top-of-the-line: a “zero trans-fat” option by Wesson.
Next Deal
He said he expects his next deal to be with Georgia Pacific for paper, everything from napkins to popcorn boxes.
Palace tests suppliers at one location for two weeks, then for a full season in a high-volume park, before going national.
Cabuco will also swap suppliers.
The Coca-Cola Co. had been the sole soft drink maker at its parks until about 18 months ago, but negotiations broke down, and Palace brought in Pepsi-Cola products.
Contracts usually run three to five years.
‘Acquisition Mode’
Palace began to open franchised restaurants in its parks about six years ago. They now include Carl’s Jr. in San Dimas; Pink’s in Bristol, Conn.; and Subway in San Jose and Lancaster, Pa.; as well as other restaurants.
The new Carl’s Jr. in San Dimas doubled sales over the previous restaurant, Cabuco said.
A Johnny Rockets at a water park on Long Island expanded twice, eventually tripling sales in the spot and upping foot traffic to that part of the park.
Each year the company adds one or two franchised restaurants at its parks.
Palace now turns its attention to tweaking its system and adding options at some parks.
Its water park in Hawaii expanded a luau from two nights a week to four, and the event now contributes to half of the park’s food and beverage revenues.
Cabuco plans a full-service restaurant and banquet hall with catering for up to 2,000 at a Palace park in Miami.
Palace also plans to continue to buy amusement parks and bring those parks into its system, he said.
“We are in acquisition mode.”
The company has about 15,000 employees, 5,000 of them in food and beverage, he said.
The parks collectively attract more than 13 million visitors annually, according to the company.
Palace is run by Chief Executive Fernando Eiroa and owned by Madrid, Spain-based Parques Reunidos SA, which bought it in 2007 for $330 million.
Parques operates 72 sites around the world that collectively get about 26.2 million visitors each year, according to its website. It is owned by Arle Capital Partners Ltd. in London.
