F&B Brands for Blockbuster Performance

The film industry is not the sole gainer from this trend. Another segment that is enjoying prolific growth is the food & beverages industry. Most of the food brands sell at a premium price which is more than double the normal retail rates, and over four to five times the production cost. The picture is brighter on the F&B front; with margins at around 65 per cent, most of the profits of big multiplexes are what they earn as margins in F&B as well as through advertising.

Talking about the distinctive price range, Arpan Dutta, COO, Cinemax explains that the menu mix does form an important part of the movie watching experience at a multiplex and it is no longer restricted to the traditional food that are associated with movies like popcorn, samosa, etc. The foods served at multiplexes are now a lot more diversified including different cuisines and also involves incorporating the local cuisine and adapting to the local palate. Dutta further adds, “Though the revenue per week still largely depends on the movie releasing, F&B contributes to roughly 20-25% of the total revenue.”   

In expansion mode

Rahul Singh, Senior Vice-President-Operations, PVR Ltd informs, “F&B plays the major role in attracting and retaining customers in multiplexes.  It is an obvious behaviour of customers that when they go for a movie, they love to munch in and indulge themselves in food and beverages, thus making F&B as an important factor. PVR has gone beyond serving popcorn and cola to movie buffs and is successful in providing unique and innovative F& B options to its customers ranging from fusion food to kebabs and freshly made sandwiches to gourmet finger food.” 

In India where over a 1000 movies release in year, the number of screens per million ratio is very low, only 10 screens per million people versus 120 screens per million people in the US. There is a lot of growth opportunity for all; each can work-up to carve its own niche. The present multiplexes count in India is around 900 screens, and The Multiplex Association of India predicts it to touch a count of 1,500 screens by end of next year. Leading players who have already set successfully a quality benchmark are PVR Ltd, Inox Leisure Ltd and Cinemax to name a few. Cinepolis, a Mexican company, started operations in India, is focusing on tier II & III in India only, with plans to add up to 500 screens by 2016.

Promoting F&B

Keeping in mind the value driven Indian consumers, multiplexes and F & B companies have aggressively promoted combo-offers.  While PVR claims to have pioneered and brought about the “Pepsi + Popcorn” combo for cinema-goers with its own separate communication developed by the brands, Cinemax is leveraging technology to come up with “order via Wi-fi”, that will help patrons beat the queue and order faster. Dutta reveals, “We have already started the ‘Order via Wi-fi’ facility At Cinemax- Malad. Here the patron can use the free wi-fi, view the food menu and fill in their screen and seat number and the food is delivered to their seat.” 

Singh of PVR elaborates, “We were the first among competitors who started service on seats in all our cinemas. We offer both the services to a patron – taking order from candy bar area and delivering it on seats and taking order directly from seat as well.   During the festive seasons we have also launched special menus to provide the best deal to our customers. All these formats have extremely been well received with our patrons.”

Brewing beverages tie-up

The multiplexes are also hot grounds for food and beverages exclusivity tie-ups and deals. Expansion is also lending multiplexes with some bargaining clout over film distributors, food and beverage (F&B) suppliers, and mall developers. And most recently they are turning into the new found war zones for the legendary Coke and Pepsi battle. If Cinemax has a Coca-Cola as its beverage partner, everything from water to juices, cold drinks and hot beverages will be from the parent company, thus restricting any other beverage company from selling within the multiplex premises.

Recently, PepsiCo India renewed its partnership with PVR Ltd for another five years. Over the last 15 years, the partnership has evolved from a traditional supplier relationship, acquiring new scale and dimension with the launch of integrated marketing programmes. As part of this renewed partnership, PepsiCo India will continue being the official ‘Pouring Partner’ for carbonated soft drinks, health drinks and juice based drinks, beverages, packaged juices and water at all 166 PVR screens spread over 22 cities across India. According to Praveen Someshwar, CEO, India Beverages, PepsiCo India, “Our association with PVR has only grown manifold over the last 15 years. With more than 25 million footfalls in 2011-12 and an increasing pan-India presence, this association further consolidates our presence across the organised multiplex category. PVR is a valued strategic partner and will play a pivotal role in building scale, visibility and greater consumer engagement opportunities for our beverage brands.”

Loyalty runs for premium patrons

As per ticket sales tracker BoxofficeIndia.com, multiplexes account for sixty-five per cent of the box-office collections for the top grossing films. This only proves that multiplexes have established their patronage and acquired loyalty with their customers, and their journey from here on will only take them on an upward graph.

While most multiplex companies shy away from commenting on the service of alcoholic beverages, PVR has gone all out to give preferential treatment to its gold glass patrons. “As per the regulation, we are serving liquor wherever it is permissible, ie, at PVR Ambience (Gurgaon) & PVR Indore. We only serve liquor at the lounge area not inside the auditorium which is not legalised,” says Singh. Also, he explains how at PVR Director’s Cut the menu offers a wide variety of cuisine and world class beverages at the call of the customers. Since the Gold Class caters to the most discerning patrons, there is a lounge where you can relax in, grab a snack from the elaborate menu or just chill before or after the movie. With such luxurious treatment just a ticket away, the multiplexes are only going to enjoy more blockbuster performances.          

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