Multiconcept Operators: Anton Airfood's Ground Control

Anton Airfood uses a mix of original concepts, local brands and national franchises to upgrade airport dining.

By Margaret Littman, Contributing Editor -- Chain Leader, 10/1/2005

Former Boise residents, or even travelers who haven’t been through Boise Airport (BOI) in a while, are shocked when they see the changes over the last five years. In the old days, the airport was so small you could run from your parking spot out front to the gate, shout at a flight attendant to hold the door and still make your plane.

But after a $14.4 million overhaul, the airport now has a parking garage, three concourses, lines at security, and several outposts of Moxie Java, a beloved local coffee shop, a Maui Tacos unit, a Hyde Park Market and Deli, and a pizzeria.

Passengers stuck at BOI during a long layover, or even just those who want to take a lunch on their flight, have William C. Anton and his wife, Patricia Miller Anton, to thank for the new dining options at their disposal. He is chairman and founder of Anton Airfood Inc.; she serves as president and CEO of the Washington, D.C.-based firm, which operates 151 restaurants in 20 U.S. airports.

For the BOI project, as they do before they bid on any new airport contract, the Antons spent an extraordinary amount of time researching the local market before submitting a proposal. They spent three-and-a-half years learning the ins and outs of the Boise dining scene, determining which dishes and brands were crucial to that market.

“Depending on the market, we may carry five or six kinds of barbecue. In Rhode Island you have to have coffee milk. When you do your homework, you know the cultural aspects that are important to the people making the decision [about to whom to award the contract],” Patricia Anton says.

“They were among the first to take that much time upfront and include recognizable brands as part of their proposal. They kind of pioneered the aspects that changed the industry from the $7 hot dog,” says industry analyst Pauline Ambrust of Palm Beach Gardens, Fla.-based Ambrust Aviation Group.

Taking Off
Being pioneers was not their intention. In 1989 the Antons—who were not then yet married—owned a nightclub and a fine-dining restaurant in Washington, D.C. Over the years the club had booked such names as Mel Torme and Kool and the Gang, and the restaurant, called Anton’s, was the toast of Capitol Hill. Despite their successes, business was competitive. So when they were offered a deal to open a second restaurant at what was then Washington’s National Airport, they grabbed it.

“I had the misguided idea that we could promote the downtown restaurant in the airport,” William Anton says.

That didn’t happen: Most people who ate in the airport were passing through and not visiting the city. But the couple soon experienced the law of unintended consequences. The National Airport Anton’s outlet was less than 2,000 square feet and had a fairly limited menu, but in an era when most airports were serving “cold hot dogs and warm beer,” it stood out. It was immediately profitable, generating $1.4 million in sales in its first year.

“From the very beginning, it was a slot machine,” William Anton says.

By 1991 they closed both the downtown restaurant and the nightclub. Although they each brought in $2.5 million in revenues, they weren’t profitable. The Antons opted instead to open five more Anton’s restaurants in Washington National and one in LaGuardia because airport foodservice was profitable from the beginning.

Anton Airfood easily won those early contracts, awarded by airport authorities simply looking to improve their foodservice offerings. However, over the years, the process became more competitive, often requiring a long bid process such as the one that netted the contract at BOI. So the company adapted by bringing appropriate branded offerings to airports and helping foodservice fit larger transportation and city-planning objectives.

Changing Planes
Part of the Antons’ success can be attributed to being in the right place at the right time, and part to their ability to navigate their way through an industry littered with even more barriers to entry than traditional foodservice.

Each airport deal is different. In many cases, a board of commissioners evaluates proposals for companies to come in and manage all retail foodservice. Once a contract is awarded, the operator makes the capital investment in the new units—anywhere from $3 million to $20 million. Because the airport authority owns the physical space, the operator pays it a percentage of sales ranging from 8 percent to 20 percent for a contract of five to 15 years. That structure made it difficult in early years for Anton Airfood to get traditional financing because the existing units could not be used as collateral.

Anton Airfood refuses to pay 20 percent of sales to the airport authority. Yet it has won contracts from competitors offering such numbers because the company’s revenue per enplaned passenger, the figure airport restaurants use rather than average unit volume, is above the industry average of $2.61: between $3 and $4. (Unit volume varies dramatically, because Anton’s concepts are varied. Anthony’s Seafood in Seattle, which brings in $29,500 daily, is one of the top performers.)

“Others might bid with 15 percent of revenues, and we’ll bid 12 percent, but our higher revenue per enplaned passenger gives them the higher gross,” William Anton explains. Over the years, the company has only lost three contracts for which it has bid and has opted not to bid on a similar number.

Analyst Ambrust says Anton Airfood yields higher revenues per passenger because of its extensive city research. For the past nine years, Anton has won industry awards Ambrust Aviation Group issues, including best overall operator and best customer service, beating out better-known names. Ambrust estimates that there are just five national players in airport foodservice, all vying for contracts at the largest 150 U.S. airports.

“This is a small industry, so word gets around,” Ambrust says. “Airport people don’t know nearly as much about foodservice as they should, so they are now willing to listen to [leaders like the Antons.]”

Portfolio Management
Sixteen years since its founding, Anton operates 83 national brands, ranging from Starbucks to Golden Corral to T.G.I. Friday’s, 16 local brands like Moxie Java, and 52 original concepts in 20 airports including JFK International Airport, Minneapolis-St. Paul International Airport and Norfolk International Airport. To achieve that portfolio—and projected 20 percent annual growth next year—the company has had to balance the contracts it would accept. Unlike other franchised situations, airports rarely change their brands once they have been opened.

The business is not the same as opening a franchise location in a mall or at a street corner, the executives say. As a concessionaire, Anton Airfood is particular about which concepts it pairs with its terminals. According to the Antons, great concepts like Baja Fresh need too much back-of-the-house space and on-site prep to work in an airport environment. Labor issues that all restaurant businesses face are exacerbated in airports. Employees must pass a 10-year FBI background check before they can be hired, which eliminates many candidates. Lack of public transportation to many smaller airports makes the jobs inaccessible to some prospective employees.

Once a franchise concept and staff is chosen, other oddities crop up. One casual-dining franchisor required all its units to have a 2 p.m. daily staff meeting, Patricia Anton remembers.

“We cannot do that because we do not have standard meal times. We cannot just stop and close the kitchen. Someone will come in and order a hot dog because his time zones are screwed up,” she says.

Despite all the airport eccentricities, the Antons are almost amazed by the company’s success. William Anton says, “We sometimes have to pinch ourselves. We’re close to ending our five-year plan, and we’re on target to make $200 million by 2008.” That’s a big difference from the nightclub and fine-dining restaurant of the 1980s, which were not profitable. “We refer to that as our ‘patron of the arts period,’” he says.