PVR Inox: Popcorn And Pepsi Sales Surpass Box Office Revenue

India's top multiplex chain, PVR Inox, is making headlines not just for its blockbuster movies but also for its sizzling food and beverage (F&B) business. In a surprising twist, the revenue from F&B sales has surpassed that of movie ticket sales, marking a significant shift in the entertainment landscape.

In the fiscal year 2023-24, PVR Inox witnessed a remarkable 21 percent growth in F&B revenue, soaring to Rs 1,958.4 crore compared to Rs 1,618 crore the previous year. Meanwhile, movie ticket sales climbed by 19 percent, reaching Rs 3,279.9 crore from Rs 2,751.4 crore in the previous fiscal year.

Nitin Sood, Group CFO of PVR Inox, highlighted the trend, stating, "Unfortunately, box office has been a mixed bag, as a result of which F&B revenue growth has outpaced box-office revenue growth rate. And F&B will do better than ticket revenue."

The box-office revenue for PVR Inox surged by 19 percent in FY24, totaling Rs 3,915.8 crore compared to Rs 3,295.2 crore in FY23.

However, the company noted significant volatility in box-office collections throughout the year.

PVR Inox's F&B business has become a formidable force, nearly rivalling that of leading quick-service restaurant (QSR) chains. With close to Rs 2,000 crore in F&B revenue, it stands as the second-largest contributor to the company's overall revenue.

In comparison, renowned QSR chains like Westlife Foodworld, Devyani International, Sapphire Foods India, and Jubilant FoodWorks Limited reported varying revenues in the fiscal year 2023-24.

Devyani International, for instance, recorded a consolidated revenue from operations of Rs 3,556.32 crore, while Jubilant FoodWorks Limited reported a revenue of Rs 4,010 crore.

Taking a strategic leap, PVR Inox announced a joint venture with Devyani International to open food courts in shopping malls.

This move underscores the company's ambition to expand its F&B business and diversify its revenue streams.

"We are happy to announce this strategic association with Devyani International Limited (DIL), a partner we truly admire. Through this opportunity, PVR INOX will be able to pivot into a pre-ticketed F&B revenue stream as opposed to the current post-ticketed F&B revenue that's very movie line-up dependent. It is the first of the many steps we intend to take to further expand our F&B business. Also, our ability to copromote both movies and food to a 150 million audience would be the USP of this collaboration," Ajay Bijli, Managing Director of PVR Inox, said in a statement.

The average spend per head (SPH) witnessed a commendable increase of over 10 percent, rising from Rs 120 in FY23 to Rs 132 in FY24.

PVR Inox implemented various strategies to enhance the customer experience, including offering free refills for popcorn and Pepsi, slashing the prices of snacks, and introducing special offers on select food items.

Moreover, the company undertook efforts to synchronise the product portfolio across both PVR and Inox chains. Sood revealed, "All the Inox cinemas where we had to launch a non-vegetarian menu have been done, which is approximately 70 percent of Inox sites. The rest of the sites will stick to a vegetarian menu because of the catchment they are situated in."

As the entertainment landscape evolves, PVR Inox's foray into the F&B sector signals a paradigm shift in consumer preferences and revenue dynamics. With a winning formula of blockbuster movies and mouth-watering snacks, PVR Inox is poised to continue its ascent as a leading entertainment and culinary destination in India.