IN THE BANK: M&T Bank Stadium, shown here during the AFC championship game in January, has a new food provider, Levy, which will invest substantial capital to upgrade concessions spaces. (Getty Images)

Levy, Aramark take over in Baltimore, Bay Area

The cyclical game of musical chairs in sports concessions picks up steam this time of year as teams jockey for position to find the best deal and the right fit for their facilities. The first quarter of 2024 is no different, but in two cases, the Baltimore Ravens and San Francisco Giants terminated agreements with food providers that had multiple years remaining on their contracts, in favor of signing deals with new vendors at their stadiums.

Today, the Ravens and Giants officially announced Levy and Aramark as their new concessionaires, respectively, starting with the 2024 seasons.

Levy replaces Aramark, which ran the food at M&T Bank Stadium for 20-plus years. The Chicago company already runs the food at Oriole Park at Camden Yards and has also added the Baltimore Convention Center, where its 10-year contract was approved by local officials on Wednesday.

Aramark, despite taking the hit in Baltimore, takes over the food at Oracle Park, which typically ranks among the best foodie ballparks in Major League Baseball. They replace Bon Appetit, which ran the premium at the Giants’ venue since it opened in 2000 before taking over concessions as well in 2018.

Consultants and industry experts stopped short of calling the early exits a trend and say it’s more of a coincidence over food service at those venues. At the same time, it shines a spotlight on the strategy behind cutting deals short for general concessions and premium dining, key revenue streams for teams and the half-dozen companies that compete for that piece of business at the highest level of sports.

The two cases have sparked discussion in concessions circles, considering the costs and legal ramifications tied to escape clauses, in which teams are required to make the vendors whole for early termination, depending on the situation. In some markets, where those agreements are with public bodies such as a sports authority, they’re often iron-clad and required to run through their term, even if a vendor is losing money, sources said.

“People have talked about it; I don’t know the details of either one and can’t say what’s happening, but it is unusual,” consultant Chris Bigelow said.

“It looks like we’re seeing a little bit of a pattern here,” said consultant Mike Plutino, founder and CEO of Food Service Matters. “Overall, we’re seeing more incumbents not retain the business than we have in a long time. What does that mean, who knows? But it’s starting to rack up, with the Ravens, Bills, Orioles, Titans, Indian Wells (and Indianapolis Motor Speedway) all changing vendors over the past six months. Hundreds of millions of dollars have moved over (in those transitions). We’re seeing more ‘vote for change.'”

In Baltimore, the Ravens control the stadium’s food operation apart from their lease with the Maryland Stadium Authority, their landlord. The two parties extended the lease for another 15 years through 2037, in exchange for the MSA funding $430 million in renovations. The Ravens ultimately terminated Aramark’s deal four years early as part of finding a new partner to elevate the level of service as part of the transformation.

RAVENS ROOF: The Gatehouse Roof Deck, shown here in a rendering, is among the new spaces Levy will operate at M&T Bank Stadium. (Courtesy Gensler)

The Ravens would not comment on the legal ramifications for early termination, but sources said they must have felt confident there was nothing in their contract with Aramark that prohibited them from taking action.

Most of the upgrades to M&T Bank Stadium revolve around food service with new premium spaces coming online over the next few years and reconfigured plazas and terraces for general admission fans. The Ravens issued a request for proposal, which required a capital investment to help pay for renovating existing spaces, paired with the state money covering the cost to build new suites and clubs, said Chris Inouye, the team’s senior director of retail, who’s involved on the food side after working in concessions for 10 years.

The Ravens would not disclose the amount of the investment and whether it was the highest offer on the table, but most likely, it runs in the seven figures based on other big league food deals. As of this week, the contract terms were still in flux, but the Ravens’ goal is to match Levy’s deal with the team’s lease extension, said Rich Tamayo, the team’s vice president of stadium operations.

“Their investment lined up with our thoughts on the extension,” Tamayo said. “It was a rigorous process, drawn out in a good way; we didn’t leave any stones unturned. Levy’s philosophy and creativity, love and passion for food and the service to match it is what put them over the top. To put an RFP out is for that reason — to get a partner who aligns with your visions currently and in the future — and they did both.”

Inouye said a group of eight to 10 team executives was involved in making the decision to go with Levy. As a whole, they’ve visited every NFL stadium, including Levy accounts.

“Every fan will be affected by these upgrades and we wanted to make sure we were moving forward with the right partner,” he said. “Levy was willing to make an investment into the stadium. It’s important to note that in the NFL Voice of the Fan survey, as it relates to food and beverage, Levy has the top two buildings, Mercedes-Benz Stadium and Allegiant Stadium. That caught our attention. They’re creative and incorporate a lot of local partners. We thought all of those things would be an upgrade over our existing provider.”

DOG EAT DOG: Oracle Park, shown here during a San Francisco Giants game in 2021, has Aramark as its new food provider. (AP Photo)

In the Bay Area, it’s a much different situation, where sources said Bon Appetit had at least 10 years remaining on its deal at Oracle Park, but struggled to make things work financially in a tough local market.

The Giants own the ballpark and decided to make a change late in the game, assisted by consultant Jonathan Harris. The last-minute switch in vendors was the result of several factors, including Aramark’s financial commitment to help upgrade Oracle Park’s food operation at a building that turns 25 years old next season, said Alfonso Felder, the Giants’ executive vice president of administration.

“We’ve got a lot of pride in what we created together with Bon Appetit, but sometimes you have to make a change to where you want to be,” Felder said. “The reality is, it’s not just one thing.”

Aramark, unlike Levy, had one month to prepare for the coming season at Oracle Park after signing a long-term deal in early February, said Aramark President Alison Birdwell. All told, it’s a 20-year agreement, she said. Aramark has branded its operation as Diamond 58, named for the year 1958, the Giants’ first season in San Francisco after relocating from New York.

“We generally get involved longer than the month before baseball season starts, but in this case, we decided to live a little closer to the edge,” Birdwell said with a laugh. “We got in the building on March 1 and served our first event, fan fest, on March 9, so basically, we had eight days of prep. The real test is the regular season. There’s a lot to get done.”

It helps that Aramark has a major presence in the market, serving food and drink at Oakland Coliseum, SAP Center in San Jose and Mission Bay Conference Center in San Francisco, with the ability to ramp up quickly at Oracle Park. In addition, the Giants have helped Aramark’s effort to retain existing staff at the ballpark and Bob Appetit has provided assistance as well, Birdwell said.

Plus, Bill Greathouse, who’s overseen the food program at Oracle Park since it opened for multiple vendors and is recognized as one of the best operators in the industry, remains intact at the stadium after moving over to Aramark. In doing so, Greathouse helps new general manager Mat Drain, previously at Minute Maid Park in Houston, get his feet wet in San Francisco.

BUSINESS BY THE BAY: Oracle Park, shown here on Opening Day 2023. The Bay Area has some of the nation’s highest labor costs, which makes it difficult for concessionaires to turn a profit. (Getty Images)

Overall, labor costs in the Bay Area, some of the highest in the nation, make it difficult to turn a profit, consultants said. Labor fees can run north of 50% of a vendor’s budget in the union town, which can play havoc with a concessionaire’s financial model and make it difficult to turn a profit, they said.

“We’re well aware of that and we have a good relationship with the union who represents those employees,” Birdwell said. “We have a pretty good understanding of how to do business there and have factored that into our deal structure to ensure that we can deliver.”

Last year, Bon Appetit signed a new agreement with the local union in San Francisco, which approved raises for part-time concessions workers that added up to an increase of $7 an hour, in addition to improvements to their healthcare and pension plans, reported. Their base pay had been $20.75 an hour, with a threat to strike if a new agreement wasn’t signed.

Aramark has assumed the current terms of that agreement as part of its deal with the Giants, Birdwell said.

The high cost of doing business in the Bay Area hasn’t stopped the ballpark from serving some of the best food fare in baseball, regardless of the vendor. Now, it’s Aramark’s turn to keep serving the signature garlic fries and  Crazy Crab sandwiches at a high level.

“Those two items are things that we’ve got to get right, and hopefully, deliver better than ever before,” Birdwell said. “We have a variety of new menu items and changes for the style of service to allow fans more ease in getting what they want. We will unveil those things on an evolving schedule as we get into the season. We’re focused on opening up and getting the core items right.”

Editor’s Note: This story has been updated.