Inox, PVR make every fourth rupee selling food, drinks
Inox Leisure’s revenue from food and beverage (F&B) sales was Rs 306 crore during 2017-18 while F&B cost was only about Rs 74.4 crore, translating into an operating profit of about 400% on F&B sales
New Delhi: You must have said this, or heard someone else ranting, “Rs 150 for a movie ticket and Rs 200 for popcorn!” Not surprisingly, food and beverages (F&B) sales contribute about 25% of the revenue at two of India’s leading multiplex chains, Inox and PVR.
In the first quarter of 2018-19, PVR earned Rs 202.71 crore from F&B sales, a jump of 23% from the corresponding quarter of the previous financial year. This high-margin segment constitutes about 30% of PVR’s total quarterly revenue of Rs 684.36 crore.
The story is no different at Inox, where the F&B segment contributed 26.8% of total revenue in the last quarter. After box office collections, food and beverages is the second biggest source of revenue for multiplex chains.
In its latest investor presentation released in May 2018, Inox Leisure says its revenue from F&B was Rs 306 crore during 2017-18 while F&B cost was only about Rs 74.4 crore. Inox is, therefore, making an operating profit of about 400% on F&B sales.
On a per screen basis, Inox earns Rs 77.8 crore from F&B sales on average while its corresponding expenditure is Rs 20.4 crore.
The Indian multiplex industry has been growing at a compounded annual rate of 14% over the last three years, but revenue from ancillary segments like F&B and advertisement have grown faster at 21%, according to Inox.
Average spend on popcorn, burger, soft drinks at multiplexes
At Inox, which has about 500 screens in India, an average movie-goer spends around Rs 66 during one visit on F&B products. The average ticket price is Rs 193, according to data from the company’s annual report.
For PVR, the average spending per person on F&B increased by 12% in 2016-17.
Multiplexes competing with restaurants
Realising the huge potential from the sale of food and beverages inside theatres, multiplex chains are trying their best to woo moviegoers with a varied menu.
Going beyond the usual popcorn and drink, multiplexes now have live kitchen counters, gourmet menus, celebrity chefs and even a butler on call.
Ordering food has been made easier with a rise in point-of-sales distribution to all over the premises and even pre-booking through mobile apps.
PVR says food made with organic, fresh and healthy ingredients, and served baked or steamed, has emerged as a popular snack option for health-conscious customers.
Also read: The limits of popcorn pricing at multiplexes