PVR Inox to expand F&B pie, plans to open 5-6 food courts with Devyani International

PVR Inox to expand F&B business by opening food courts in malls.

India's largest multiplex operator PVR Inox is expanding its food and beverage (F&B) business by venturing into pre-ticketed food business, which means the company wants a share of consumers' wallets before they buy a movie ticket.

While one of the biggest contributors to the company's overall revenue is the F&B segment, bulk of the revenue is from post-ticketed F&B business. To grow its pre-ticketed F&B segment, the exhibitor under a joint venture (JV) with QSR (quick service restaurant) chain Devyani International will open five to six food courts in the first year of launching the new entity.

"We will set up a JV in which Devyani will own 51 percent (share) and PVR Inox will own the remaining. The idea is to open food courts in shopping malls all over the country. Priority will be to open in present large shopping malls," Nitin Sood, Group CFO (Chief Financial Officer), PVR Inox, told Moneycontrol.

Currently online food sales of products, like its gourmet popcorn brand 4700BC which comes under the pre-ticketed segment, has a small contribution in the overall F&B revenue of the company.

"It (online sales) is a small percentage, less than 1 percent. Most of the F&B sales are in cinemas. Online segment hasn't done well for us. I think we need to redo that business model. We are reworking that model," Sood said.

The multiplex operator is looking to pivot from being only an exhibition company to being an F&B player as well, said PVR Inox's Managing Director Ajay Bijli during Q4 FY24 earnings call.

What will be on the menu? Sood said that the contribution in terms of food menu will be limited from PVR Inox and it will be largely driven by Devyani International's brands.

"New brands can also come in and join exclusively for the food court business. The idea is that Devyani brings food brands to the table and we bring real estate. There is an opportunity in this space for an organised player to operate."

Sood said that opening food courts is one of the initiatives that the exhibitor is taking in the overall scheme of expanding pre-ticketed F&B. "Post ticketed F&B is large at around Rs 2,000 crore. This (opening food court) will be a small fraction of that and it will take time to build up," the CFO added.

Bijli said that they were keen to pivot to pre-ticketed F&B especially with Devyani International bringing in brands like KFC, Pizza Hut, Costa Coffee.

"We have a long term relationship with them (Devyani International) as they have been our suppliers for Pepsi in most of our circuits for a long time. We see a lot of opportunities with this JV because most of the malls do not have branded food courts and in existing malls food courts are not managed well. Food courts and cinema are the two anchors in every mall that generate the maximum footfalls. Having a play in this with Devyani is a good strategic pivot for the company (PVR Inox)," the MD said.

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