PVR Cinemas/Costa Coffee: A movie over a coffee

In a recent development, India’s first multiplex chain PVR Cinemas and British Coffeehouse Company’s Costa Coffee have joined hands to offer gourmet coffee and other beverages to visitors at PVR theatres.

The idea to offer gourmet coffee came from consumer feedback that PVR Cinemas studied for the past five years. Pramod Arora, group president & CEO, PVR Ltd, says, “We decided we would be focusing on the eatables. Till now, everything was in-house and gourmet coffee was missing at PVR Cinemas. We had many options to choose from, but Costa Coffee emerged as the strongest brand. Consumers want coffee from Costa. Among other things, only Costa has double-layered cups that don’t let you feel the heat.”

But why did Costa choose PVR Cinemas? Santhosh Unni, CEO, Costa Coffee, India, says, “We are present in IT Parks, malls, high-streets, airports and hospitality centres. However, after the 2011 ICC World Cup and the Indian Premier League season-4, we thought this is the right time to focus on this format.”

Costa Coffee is locked in a serious battle for market share with global market leader Starbucks in a number of fast-growing markets, including China, Russia, Central Europe, and West Asia, besides India. Adds Unni, “We are not chasing quantity rather we want quality. The multiplex channel is still dominated by popcorn. We spent around three months to understand this culture.”

The last three to four years have seen the number of multiplexes grow in leaps and bounds. Some quick numbers. BIG Cinemas has 248 screens, PVR Cinemas has 148, Essel Group’s Fun Cinemas 140, and Cinemax India has 105 screens. PVR Cinemas is also looking at quick expansion. “We will come up with 54 screens this year. Of these, four will be operational in Udaipur by mid-June. Next in the line are Pune, Bangalore, Ludhiana, Surat and Jalandhar.”

Costa has made some changes in its offerings to suit the format. “While there are three sizes in the beverages category across our regular stores, we have only one size at the PVR Cinemas. Multiple sizes will lead to confusion, as viewers will have only a 10-minute break during a movie to choose from,” says Unni. The pricing strategy is quite simple — one price point for hot beverages (hot coffee costs Rs 50) and one price point for cold beverages (Rs 60 for an ice tea/cold coffee and Rs 90 for a fruit cooler, a premium-end product). The pricing for a Costa beverage will be 20 per cent less than its regular stores. Next in line are more combo offers, which we will introduce soon,” adds Unni.