Chinese consumerspreference for instant noodles seems to have returned to their original feelings - the latest statistics show that 28.75 instant noodles per capita are consumed annually in China.
Recently, a report on instant noodles has made instant noodles a hot topic again. According to a report released by consulting firm Rees, instant noodle sales worldwide reached 103.6 billion in 2018, while the Chinese market accounted for 40.25 billion copies, accounting for 38.85% of global instant noodle sales, ranking first. From the per capita point of view, Chinas consumption level is also unwilling to show weakness, 28.75 data are far higher than the worlds per capita consumption of instant noodles 13.6.
The negative trend of the instant noodle market has damaged the instant noodle enterprises, especially the instant noodle Shuangxiong Kangshifu Holdings (00322.HK) and the unified enterprise China (00220.HK, hereinafter referred to as unification). Last year, both of them achieved considerable growth. What makes instant noodles enterprises more excited is that the growth of instant noodles market is not only in quantity, but also in quality. Specifically, it is reflected in the popularity of high-end products.
On the one hand, the demographic dividend is declining and the general health trend is surrounded. On the other hand, takeout and quick-freezing are squeezed by two rivals. How can the convenience of retreating turn the tables against the trend? Is this a flash in the pan or a perfect second blossom?
In Yokohama, Japan, workers are sorting out instant noodle shelves. Information Map of Xinhua News Agency
From defeat to rise against the tide
Its often not your opponent who beats you. This is especially true in the instant noodles industry in the past few years. While Master Kang and the two giants of Unification are fighting for the first time in the Chinese market, nobody ever thought that the takeaway APP in the Internet industry would hit the instant noodles industry hard.
Statistics from the World Instant Noodle Association also confirm that the Chinese market has rebounded rapidly.
The recession in the industry is also reflected in the performance of instant noodles enterprises. At the lowest sales in 2016, the domestic instant noodle veteran Master Kang has declined for three consecutive years, while the net profit has declined for four consecutive years. In 2016, net profit of US$177 million (about 1.2 billion RMB) fell 31% year-on-year.
As the instant noodle industry farewell outlet, Master Kangs market value has also fallen horribly. In 2011, the total market value of Master Kang in its heyday was over HK$140 billion, but as of September 2017, the total market value of Master Kang was only HK$62.6 billion. In six years or so, the total market value of Master Kang has evaporated nearly HK$80 billion (about 70 billion RMB).
Unified performance has also been declining, and even the news of layoffs has come out. The unified 2017 semi-annual report shows that as of June 30, 2017, the total number of unified employees was about 29.081 million, compared with 328.82 million in the same period last year, which means that the number of employees in unified enterprises in China has decreased by nearly 4,000 in one year.
By 2017, the performance of instant noodle duo-xiong began to recover, and rose strongly in 2018. According to the performance data of Master Kang in 2018, the revenue of Master Kang reached 60.686 billion yuan in 2018, an increase of 2.94% over the previous year, and the net profit was 2.463 billion yuan, an increase of 35.42% over the previous year. Master Kangs sales accounted for 43.3% of the market and 48.2% of the total market share. The revival of its performance also represents the revival of the whole market.
According to Rees Consulting, the sales of instant noodles in China have rebounded significantly since 2018, and the sales of instant noodles in China are expected to rebound to the level of 2014 in 2019.
Failure means health and success means health
In this regard, Zhao Xiaoma, Executive Director of Insight Consulting, gave a number of reasons for the analysis to First Finance and Economics. First of all, from the consumer level, the growth rate of online takeaway platform market slowed down, instant noodles regained consumer favor.
Nevertheless, the takeout market has gradually entered the mature stage of Oligarchy Competition recently, and itsburn money subsidymodel is unsustainable. The average price of takeout is also rising. It has gradually withdrawn from the market of 10-20 yuan, and the growth rate of the online takeout market has slowed down gradually. In addition, the food safety of takeout platform has gradually been exposed in the past two years. Problem, cheap, fast, rich variety, better taste, industrialized production of mature instant noodles, naturally become the first choice to fill the gap in takeout market, and regain the favor of consumers.
From the point of view of instant noodle enterprises, the key to the rise of instant noodle enterprises is to upgrade their products in an all-round way and to sell high-end products well. Overall growth of instant noodles business in the past two years has largely benefited from sales of container noodles and high-priced bags. The core reason is the innovation of instant noodle enterprises. Instant noodle manufacturers continue to introduce innovative products with both nutrition and delicacy, minimizing the industrial flavor and returning products to tradition and nature. More and more varieties, better taste, more and more emphasis on nutrition and health, not only attracted young people working overtime, many elderly people and children also like instant noodles. Zhao Xiaoma said.
In addition, the hot sales of middle and high-end instant noodles directly stimulated the growth of instant noodles business. For example, the proportion of uniform instant noodles over 5 yuan increased from 21% in 2017 to 26% in 2018. The sales of high-end products Tongda people increased by 30% year on year in 2018, and the revenue scale exceeded 1.9 billion yuan. Sales increased by 10.6% year on year, while sales of low-priced crisp noodles fell by 24% year on year.
Supermarket instant noodles counter. Information map
Thus, the revival of instant noodles industry benefits from the promotion of sales of high-end products.
Master Kang responded to First Finance and Economics: The recovery of instant noodle market depends on the whole industry seizing the opportunity to upgrade consumption, constantly improving product structure, products are becoming healthier, tastier and personalized. The instant noodle industry has transited from the incremental stage to the value promotion stage through the supply side. The efforts of high-end transformation in the industry in recent two years have effectively promoted the growth of the market. It can be said that the revival of instant noodle market is the result of continuous innovation and upgrading on the industrial side by the consumer side.
Ju Danpeng, an analyst in Chinas food industry, doesnt seem to be a problem with the declining demographic dividend and taking-out of instant noodles. Chinas market is very large, population growth has slowed down, but the huge base of nearly 1.4 billion people is still increasing. As long as enterprises provide good products, they can still achieve great development.
Zhu Danpeng believes that the healthy transformation of instant noodles enterprises has greatly weakened the concept that instant noodles are not healthy enough in consumersminds. At the same time, compared with takeaway, the standardization and branding of instant noodles make them better in food safety. In most cases, many consumers do not know where the takeaway is made, where the food is taken from and whether the processing is hygienic. But instant noodles are produced by large enterprises, endorsed by brands and standardized processes, so they are often more trusted by consumers. It also gives instant noodles a chance to turn over.
Although the instant noodle market has temporarily recovered, it is still uncertain whether it can sustain its growth momentum. Like the sudden onset of takeout, the crisis may come not only from within the industry, but also from outside.
With the younger generation of consumers represented by the post-90s and post-00s becoming the mainstream consumers, their consumption demand is becoming more diversified and individualized, and the acceptance of fresh food is very high, so net red food emerges in an endless stream. In recent years, more convenient products, such as pop-red snail powder and small hot pot, have been popular. These products have higher unit price and still get more fans. It is not easy for traditional instant noodles to continue to win the favor of new consumers.
Zhao Xiaoma believes that in the face of the ever-changing market environment, instant noodle enterprises need to make efforts in both channels and products. Channels need to innovate marketing methods and launch a global layout, including sponsoring well-known network or television programs by name, enhancing network exposure, and using live, VR and other emerging media to trigger hot marketing to cater to the life and entertainment habits of young consumers. In addition, we can actively explore overseas markets. For example, nowadays Mailang has launched the old Fanjia noodles in Japan and Korea, and the market has responded well. Master Kang has also launched Express Express Express instant noodles in Switzerland.
In terms of products, we should continue to expand the high-end market and increase innovation in category. In the future, Chinas instant noodles market will continue to warm up, and there will be a polarization trend: in the mass market, consumers will continue to pursue more affordable products; in the high-end market, consumersawareness has been upgraded, no longer satisfied with the taste changes of instant noodles, but began to put forward the taste and quality of instant noodles. Higher requirements.
In the future, instant noodles will usher in the era of dinner. Instant noodle manufacturers should pay attention to the rise of the middle class and the continuous upgrading of consumption, gradually laying out high-end and super-high-end markets, in order to lead the upgrading of the industry. Zhao Xiaoma told First Financial Express.
Source: First Financial Responsibility Editor: Guo Chenqi_NBJ9931