“Instant noodle supplies in our Xuzhou region have recently become tight, and distributors' warehouses are basically empty,” a distributor reader reported to New Distribution on January 26. New Distribution quickly conducted a market survey covering distributors and brand sales managers in Beijing, Hebei, Jiangsu, Shaanxi, and other regions. The survey found that instant noodle supply in multiple regional markets experienced a certain degree of shortage at the channel level. Many distributors in various regions saw their warehouses empty, but new stock was hard to order or still in transit. However, from the frontline market perspective, there is currently no impact on the consumer end, and many brands are still running holiday promotions. What exactly is causing the temporary shortage in some regions? Is the popularity of instant noodles a flash in the pan, or will it become an overall trend in 2021? What will the market trend be for instant food, including instant noodles, during this year's Spring Festival? -01- Why Are Instant Noodles Suddenly in Short Supply in Multiple Regions? What is causing the tight supply of instant noodles at the channel level in many places? First, market demand has indeed seen high growth, especially in the three northern regions: Northwest, North China, and Northeast. The main reason is the impact of low temperatures, making epidemic prevention and control particularly important in the northern winter. In Hebei, Beijing, and the three northeastern provinces, confirmed cases have appeared successively over the past month or more, and even in some prefecture-level cities in Hebei and Jilin, a large number of cases led to city lockdowns for epidemic prevention. According to the latest regulations from the National Health Commission, during this year's Spring Festival, all returning personnel need to undergo 14 days of home health observation and must not go out for social activities or entertainment. Many consumers are stocking up on several boxes of instant noodles at home to be prepared for emergencies. At the same time, it also allows them to be a bit lazy, since they cannot go out for 14 days, and cooking every meal is a considerable workload. When many consumers, as households, include instant noodles as one of their staple foods, the demand side will definitely see a significant increase. Second, due to the major instant noodle shortage during the 2020 Spring Festival, almost all small terminal stores have deliberately increased their purchase volumes this year. During the 2020 Spring Festival, because of epidemic prevention and control needs, people across the country were isolated at home during the holiday, and instant noodles were once in such short supply that it was hard to find a single pack. Based on this judgment, almost every small store increased its instant noodle inventory by dozens of boxes. However, according to distributor feedback, this inventory has not yet been fully digested. Finally, while consumer and channel demand for instant noodles is high, there is also a huge gap in production capacity from brands such as Jinmailang. In January 2021, Hebei experienced a cluster outbreak. First, Shijiazhuang was locked down, then the entire province implemented strict prevention and control measures, with strict controls on inbound and outbound traffic. Jinmailang's base is in Longyao, Hebei. Due to the traffic blockade, many raw materials in the supply chain could not be procured smoothly, greatly impacting Jinmailang's instant noodle production capacity. It is understood that the affected capacity accounts for approximately 50% of Jinmailang's instant noodles. As one of the domestic instant noodle giants, once Jinmailang's 50% capacity gap appeared, it was quickly divided among Kangshifu, Uni-President, and Baixiang. However, this capacity gap is very large, close to 500 million units per month. Coupled with consumption growth, other brands were caught off guard, leading to a tight supply situation, especially in northern regions. At the same time, another unexpected situation occurred. Another leading instant noodle company's factory in Nanjing had to adjust its production lines and stopped production for five days. Stopping production for five days during the peak season means that the distributor inventory in the four provinces covered by this factory—Jiangsu, Zhejiang, Shanghai, and Anhui—also experienced a significant gap. In summary, the tightness in the instant noodle market in January is due to three factors: increased demand from home scenarios, increased stocking by small terminal stores, and upstream capacity gaps. Therefore, instant noodles may remain tight for a while, but they should not run out during this Spring Festival. -02- In the Special Year of 2021, Which Products May Sell Well? According to the survey by New Distribution, as of today in January, except for Jinmailang's capacity being affected by the epidemic, the other three instant noodle giants have all seen significant growth. Among them, Kangshifu instant noodles have grown strongly in the northern market, with a year-on-year increase of over 40%; Uni-President and Baixiang instant noodles both saw year-on-year growth of over 30% in January. In addition to instant noodle growth, Uni-President also has a highlight: its "Kaixiaozao" self-heating food grew over 100% year-on-year, with monthly sales exceeding 100 million yuan. At present, 2021 is likely to be another turbulent year. In this special 2021, which products may sell well and even become new growth points for distributors' businesses? We need to analyze and find answers from consumers' purchasing behavior and consumption scenarios. From a purchasing behavior perspective, online shopping will be further strengthened. Whether it is traditional e-commerce platforms or community group buying, which suddenly revived in 2020, contactless online purchasing methods have been reinforced again. Therefore, in 2021, more new products may enter the market through online launches. This includes innovative new products from first-tier brands, as well as new consumer brand entrepreneurs entering the FMCG track. From a consumption scenario perspective, as long as the epidemic has not completely passed in 2021, home health observation will become a normal part of everyone's life. Once staying at home becomes a habit, it will have strong continuity. Therefore, home consumption products may see excellent growth in 2021. Food is the first necessity of the people. Specifically for food, all foods that compete on convenience will have very good opportunities in 2021. Traditional instant noodles will win over consumers with more delicious and healthy innovative products. Self-heating foods, because they balance health, taste, and convenience, will also continue the ultra-high growth trend of 2020. The rapid growth of new consumer brands represented by "Zihaiguo" and the innovative self-heating foods from traditional big brands, such as the billion-yuan single product "Kaixiaozao," are good opportunities for distributors in 2021. Also, products that make traditional cuisine convenient, frozen foods, and innovative condiments for meals are all good business opportunities in 2021. Examples include Uni-President's "Xiangban Yicheng Liangpi," "Mazilu Lanzhou Beef Noodles," "Najie Naxiang Guilin Rice Noodles," and "Uni-President Laotan Sauerkraut Sauce," as well as Baijia Food's specially developed series of traditional Chinese cuisines from various regions, with dozens of products, all worthy of distributors' attention. As home scenarios become more common, any product that allows consumers to eat conveniently, deliciously, healthily, and with variety at home may be an opportunity in 2021. After finally saying goodbye to 2020, even if the epidemic will still recur and appear sporadically in 2021, we believe that all bad things will eventually pass. We have always had this belief, just as we have always faced the relentless changes in the market, yet still firmly believe that we will ultimately prevail. Come on, 2021! Come on, every friend of New Distribution! Add the author's WeChat for communication****Note: NameCompanyPosition If you provide a tip, you will be paid 400-2000 yuan once it is adopted.