--- title: "A Big Ship Can Turn: The Food Safety and Science Popularization Dream Behind Master Kong's Steady Growth in the First Half of the Year" description: "Recently, an article titled \"I Work in Food at a Fortune 500 Company, and I Was Cheated by a Short Video App Selling Roasted Shrimp\" went viral on social media. The author, a user of a short video app who works in food at a Fortune 500 company, bought a pack of \"quality-assured\" roasted shrimp on the platform, only to find the shrimp meat was dry, tasteless, and had no production date or manufacturer information printed on the package. This sparked widespread public outcry and discussion about the lack of quality assurance in live-stream e-commerce." author: "快消君" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2019-08-31" categories: "Management & Methods" language: "en" canonical: "https://xinjignxiao.com/en/articles/a-big-ship-can-turn-the-food-safety-and-science-popularization-dream-beh-49e929ad/" markdown: "https://xinjignxiao.com/en/articles/a-big-ship-can-turn-the-food-safety-and-science-popularization-dream-beh-49e929ad.md" original_source: "https://mp.weixin.qq.com/s/JDMM56tfsZZEmtTKgenV0A" translation: "https://xinjignxiao.com/zh/articles/%E8%88%B9%E5%A4%A7%E8%83%BD%E8%B0%83%E5%A4%B4-%E5%BA%B7%E5%B8%88%E5%82%85%E4%B8%8A%E5%8D%8A%E5%B9%B4%E7%A8%B3%E5%81%A5%E5%A2%9E%E9%95%BF%E8%83%8C%E5%90%8E%E7%9A%84%E9%A3%9F%E5%AE%89%E4%B8%8E%E7%A7%91%E6%99%AE%E6%A2%A6-49e929ad.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/a-big-ship-can-turn-the-food-safety-and-science-popularization-dream-beh-49e929ad/" citation: "快消君. “A Big Ship Can Turn: The Food Safety and Science Popularization Dream Behind Master Kong's Steady Growth in the First Half of the Year.” New Distribution, 2019-08-31. https://xinjignxiao.com/en/articles/a-big-ship-can-turn-the-food-safety-and-science-popularization-dream-beh-49e929ad/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # A Big Ship Can Turn: The Food Safety and Science Popularization Dream Behind Master Kong's Steady Growth in the First Half of the Year > Recently, an article titled "I Work in Food at a Fortune 500 Company, and I Was Cheated by a Short Video App Selling Roasted Shrimp" went viral on social media. The author, a user of a short video app who works in food at a Fortune 500 company, bought a pack of "quality-assured" roasted shrimp on the platform, only to find the shrimp meat was dry, tasteless, and had no production date or manufacturer information printed on the package. This sparked widespread public outcry and discussion about the lack of quality assurance in live-stream e-commerce. Recently, an article titled "I Work in Food at a Fortune 500 Company, and I Was Cheated by a Short Video App Selling Roasted Shrimp" went viral on social media. The author, a user of a short video app who works in food at a Fortune 500 company, bought a pack of "quality-assured" roasted shrimp on the platform, only to find the shrimp meat was dry, tasteless, and had no production date or manufacturer information printed on the package. This sparked widespread public outcry and discussion about the lack of quality assurance in live-stream e-commerce. As a leading enterprise that has been deeply rooted in the Chinese market for 30 years, with a single quality inspection equipment set costing as much as the entire assets of some "three-no" manufacturers, Master Kong's investment in food safety is substantial. In the first half of 2019, Master Kong welcomed its own little "spring." **Instant Noodles Strong Recovery** Recently, Master Kong announced its interim results for the first half of 2019. During the reporting period, Master Kong achieved revenue of RMB 30.495 billion (RMB, same below), a year-on-year decrease of 1.62%; but net profit increased significantly, up 15.05% year-on-year to RMB 1.503 billion; in addition, gross margin increased by 0.7 percentage points to 31.93%. The company stated that although prices of major raw materials such as flour and PET pellets remained high, gross margin increased due to lower prices of cartons, sugar, and palm oil, as well as product mix optimization, product upgrades, and national tax reduction policies. At the same time, thanks to the increase in gross margin, financial and administrative expenses decreased, other operating expenses decreased year-on-year, and profit attributable to shareholders increased year-on-year. In the instant noodles business, Master Kong achieved revenue of RMB 11.544 billion in the first half, up 3.68% year-on-year; net profit increased significantly by 31.24% year-on-year. In the financial report, Master Kong divided its instant noodle products into three tiers: "mid-priced noodles/crispy noodles," "high-priced and premium noodles," and "ultra-premium noodles." Among them, mid-priced noodles aim to meet the affordable consumption needs of lower-tier towns and rural areas. In terms of sales share, high-priced bagged noodles accounted for as much as 40%, while mid-priced bagged noodles and crispy noodles together accounted for only 10%. According to Nielsen data, in the first half of 2019, the overall Chinese instant noodle market sales volume increased by 1.4% year-on-year, and sales value increased by 7.5% year-on-year. During the period, Master Kong's market share by volume was 42.9%, and by sales value was 46.6%, ranking first in the market. In addition, Master Kong's premium instant noodles accounted for over 70% of the market share for instant noodles priced above RMB 10. In summary, Master Kong's instant noodle business is back on the fast track of growth, which also refutes the claim that "food delivery defeated instant noodles." Master Kong also stated that during the first half, its instant noodle business adhered to a multi-price-band strategy, focusing on consolidating the high-priced and premium market while laying out the ultra-premium market. By increasing advertising investment and multimedia marketing, continuing IP collaborations to create diverse consumption scenarios, and offering multiple specifications and flavors to meet these scenarios, it attracted young families and young consumers. For example, the Red Roast Beef Noodles and Simmered Broth Noodles strengthened the travel dining scenario through collaboration with the parent-child variety show "Take Me to the Distance"; the Sauerkraut Beef Noodles continued IP collaboration with "Kung Fu Panda" to rejuvenate the brand image; the Sichuan Pepper Beef Noodles collaborated with the anime "Douluo Dalu" and combined with offline family experience stores to attract urban fashion consumers; the Fresh Vegetable Noodles strengthened online marketing through social media such as Weibo and Douyin to increase brand exposure. **Product and Channel Evolution** In recent years, Master Kong has gradually consolidated the mass consumer market and explored the high-end market. Since the instant noodle business initiated reforms earlier than the beverage business, it has entered a stable growth period after the initial turbulence, while the beverage business is still in the process of structural adjustment but has begun to recover gradually. In 2011, at its peak, Master Kong's total market value exceeded HK$140 billion. In September 2016, after 20 years of listing, Master Kong was removed from the Hang Seng Index. This situation did not reverse until the end of 2018 when its market value returned to over HK$100 billion. To avoid the awkward situation of "a big ship being hard to turn," as early as 2016, Master Kong began a comprehensive upgrade of its instant noodle products, continuously consolidating high-priced noodles and developing premium noodles to align with consumption upgrades and consumers' health needs. It increased the exposure of simmered broth products such as pork bone, golden soup, and pepper flavors, which gained market favor. The "ultimate upgrade" of Master Kong products occurred at the end of 2018. At that time, Master Kong officially launched the premium instant noodle product "Suda Noodle House" with an average price of over RMB 20, available in four flavors: Red Roast Beef, Scallion Braised Pork Chop, Sichuan Pepper Beef, and Spicy Beef. It is understood that Master Kong's "Suda Noodle House" adopts three production technologies: FD technology (vacuum freeze-drying), broth simmering and extraction technology, and aerospace RP technology. Master Kong built a large-scale FD freeze-drying factory and developed an industry-leading instant noodle frying process control system, significantly exceeding national standards. At the same time, Master Kong has not forgotten to meet the high cost-performance needs of lower-tier cities, and has vigorously promoted large-portion products (large bucket/bag) and double-share buckets to solve the pain point of "one portion is not enough," which has been widely praised by consumers. In fact, in recent years, Master Kong has not only made achievements in product development but also maintained and built harmonious and win-win relationships with distributors, with "stability" as the priority. At the end of 2018, when "Suda Noodle House" was launched, Master Kong made a major adjustment to its channel profit policy: it increased the gross profit for distributors on Master Kong instant noodles from RMB 2.5 per box to RMB 4.5 per box, a direct increase of RMB 2, an 80% increase, maintaining reasonable channel profits and thereby continuing to enhance the brand's market competitiveness. When the market is declining and consumption habits are changing, inflation still exists, and retailers and distributors face rigid cost pressures. At this moment, Master Kong, as an industry leader, resolutely took responsibility by proactively giving up profits to distributors, helping them overcome difficulties and gain an advantage in future development. **Food Safety and Science Popularization in Parallel** Food safety is closely related to consumer rights and health. Master Kong regards food safety as the foundation of its business, and its investment in food safety management is long-term oriented, considering food safety management over a longer time span. This gives Master Kong a more strategic perspective on food safety, viewing it as an important support for building long-term corporate value. It is understood that Master Kong has invested a total of RMB 500 million in recent years to establish an international-level food safety testing center; its food safety management team of over 3,000 people conducts more than 3.5 million tests on related raw materials and final products each year. In 2018, Master Kong further invested over RMB 90 million in food safety and quality control, achieving a 100% certification rate of food safety management systems in regular operating factories and a 100% coverage rate of supplier food safety management audits. In fact, Master Kong has adopted a "zero tolerance" attitude towards food safety issues for decades, strictly controlling source safety, firmly grasping the upstream supply chain, implementing strict management of raw materials and suppliers, guarding every line of defense from farm to table, and establishing a full-process traceability management system to ensure monitoring of the entire industry chain. In addition, Master Kong has continuously strengthened cooperation with universities and professional research institutions in professional fields. In 2016, Master Kong partnered with four top domestic food science institutions, including China Agricultural University, to conduct research on food science and engineering, instant food nutrition, and food safety. For Master Kong at present, food safety is certainly the foundation of the enterprise, but it is not enough to just work on products; marketing channels also need to be upgraded and innovated. It is understood that Master Kong's "Aerospace Instant Food Joint Laboratory" was officially inaugurated in Shanghai recently. The new laboratory will focus on the development of nutritionally enhanced and functional instant noodles. This also means that Master Kong has taken a solid step forward in aligning with aerospace standards, and its aerospace strategy has officially deepened into the level of quality upgrading. Industry insiders believe that this event is a milestone for driving quality upgrades across the entire industry. In fact, Master Kong joined the China Aerospace Industry Partners camp as early as 2017. Through cooperation with aerospace-related institutions, it benchmarks aerospace food technology and high standards to achieve innovation and upgrading of Master Kong products. To enhance public food safety literacy and disseminate food safety science knowledge, Master Kong has also carried out food safety science education activities for many consecutive years, including public welfare activities such as "Aerospace Spirit China Tour and Food Safety Science Exhibition" and "Aerospace Science into Schools." The Dream Exploration Parks in Hangzhou and Tianjin are food safety science education bases created by Master Kong, allowing consumers to truly experience the importance of food safety. It is also Master Kong's support for the development of China's aerospace industry that has made Master Kong not only attract attention in the food field but also capture the public's eye in the technology field. When we often use "a big ship is hard to turn" to describe traditional food giants, isn't it a blessing for the industry that such a leading enterprise can still "dance like a giant elephant"? Tips will be paid 400-2000 yuan once adopted. **China FMCG + Internet Professional New Media** **Committed to FMCG manufacturer transformation and upgrading and channel digital solutions** --- ## Citation metadata - Publisher: New Distribution - Author: 快消君 - Published: 2019-08-31 - Canonical: https://xinjignxiao.com/en/articles/a-big-ship-can-turn-the-food-safety-and-science-popularization-dream-beh-49e929ad/ - Original source: https://mp.weixin.qq.com/s/JDMM56tfsZZEmtTKgenV0A ## Copyright and AI use This article is sourced from New Distribution. 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