China’s declining instant noodles industry looks to diversify by introducing product lines for health-conscious consumers
By Tan Xingyu
Celebrations of the Chinese New Year usher in the world’s largest annual human migration. According to official estimates, 2.98 billion passenger trips occurred across the country during the 2017 Spring Festival holiday. Either by flying, taking a train, driving a car or riding a ship, tens of millions of Chinese return to their hometowns in any way they can to celebrate the country’s most important festival with family members.
Because of China’s vast territory, trains have become the main choice for long distance travel. Chinese media covered the migration extensively, with many shots of crowded train carriages and passengers pouring hot water into bowls of instant noodles for a simple on-train meal.
A Necessity of Life
Instant noodles are the brainchild of Momofuku Ando, founder of the Japanese company Nissin Foods. On Aug. 25, 1958, Ando launched Chicken Ramen, the world’s first packaged instant noodle, which soon became a global sensation for its convenience and delicious taste.
The product debuted in China in 1986, and over the past few decades, it has become immensely popular across the country as a “national delicacy”, enjoying a dominant market share. In 2014, Chinese consumed 44.4 billion packs of instant noodles, almost half of the world’s total. Silhouettes of people eating instant noodles can be found everywhere from offices to dormitories, construction sites and railway stations, as well as a multitude of other places. For 18 years running, China’s instant noodles industry has registered 20 percent year-on-year growth.
According to a comparison study on nutrition of instant staple foods conducted by the Tianjin University of Science and Technology, there is very little difference between instant noodles and other staple foods in terms of nutritional content, and the only dark side of eating instant noodles is inadequate nutritional intake. In this sense, the “food for all” is still an optimal choice when it comes to filling an empty stomach.
So far, a diverse variety of instant noodles have been developed to cater to the varying tastes of Chinese consumers. Master Kong, one of China’s leading food and beverage manufacturers, occupies more than half of the instant China’s declining instant noodles industry looks to diversify by introducing product lines for health-conscious consumers noodle market share in China. It produces over 150 kinds of instant noodles, of which the Pickled Cabbage Flavor Noodles and Braised Beef Noodles have garnered particular popularity for their strong flavor.
“Link the world with instant noodles,” reads a slogan found on the website of the World Instant Noodles Association. In China at least, instant noodles have become an integral part of people’s lives.
An Industry in Crisis
Things, though, are changing. According to Master Kong’s 2016 mid-year performance report, the company’s revenue earned from instant noodles in the first half of 2016 dropped by 13.95 percent over the same period of the previous year, an unexpected figure that shocked the industry.
This decline has been attributed by some to the emergence of food takeout and delivery services in China. In 2015, the Chinese food delivery market was valued at US$6.43 billion, posing a challenge to the sales of instant noodles. As their pockets swell, Chinese consumers’ demand for healthier food products grows. The online food ordering service’s aggressive grabbing of market share has marginalized instant noodles from a kind of staple food to a supplementary snack. In addition, with a wide variety of instant foods lining the shelves at supermarkets and various prepared meals and snacks made available at convenience stores, the instant noodle is losing its competitive edge.
In 2011, the Chinese government launched a program of nutrition improvement for rural students receiving compulsory education. By 2016, the program had been implemented at 137,000 schools (more than half of the total number of schools across the country) in 29 provincial-level regions, benefiting some 33.6 million students (nearly onefourth of the nation’s total). Thanks to the program, almost none of the students in China’s rural areas now go to school on an empty stomach. Their average heights and weights have increased, and their physical fitness has improved. Such efforts have been recognized by international organizations including the World Bank and the United Nations World Food Programme.
In recent years, the Chinese people’s increasing pursuit of a healthier lifestyle has brought a greater challenge to China’s instant noodles industry. Traditionally, instant noodles tend to contain high oil and salt content, resulting in high calorie content, which goes against the rising trend of eating healthy. Meanwhile, as China further opens to the outside world, imported instant noodle products provide more options for domestic consumers. Mama Shrimp Creamy Tom Yum Flavor Oriental Style Instant Noodles from Thailand, Indomie Goreng fried noodles from Indonesia, Prima Taste Laksa La Mian from Singapore and others have proved pleasant surprises for nutrition-conscious Chinese consumers who seek savory flavors.