The recovery of China's instant noodle market is becoming increasingly evident. According to Nielsen data, in 2018, instant noodle market sales volume grew 3.2% year-on-year, and sales value grew 8.0%. Meanwhile, the 2018 annual reports released by Master Kong and Uni-President also confirmed the industry's recovery, with their instant noodle revenues increasing 5.73% and 5.66% respectively. Industry insiders point out that under the consumption upgrade trend, companies like Master Kong and Uni-President are also upgrading and innovating their products to meet consumers' increasingly diverse needs, which is an important reason for the recovery of the domestic instant noodle market. However, facing the continuously upgraded high-priced, high-end noodles, consumers seem less receptive than companies imagine. Some netizens exclaimed: "If we don't work hard, we can't even afford instant noodles!"

01 The instant noodle market continues to recover China is the world's largest producer and seller of instant noodles. Data shows that since the 1990s, the turnover of China's instant noodle market increased for eighteen consecutive years. However, after 2013, instant noodle sales in China began to decline. According to data from the Prospective Industry Research Institute, in 2013, total instant noodle sales in mainland China and Hong Kong reached 46.22 billion packs, with an average of 1,465 packs opened per second. After that, China's instant noodle market began to decline. By 2016, annual sales in mainland China and Hong Kong had fallen to 38.52 billion packs, a decrease of 7.7 billion packs in three years. In 2017, China's instant noodle market improved slightly, with annual sales of 38.97 billion packs, a small increase of 1.17%. It was not until 2018 that the signs of a full recovery became more apparent. In September 2018, at the press conference of the 18th China Instant Food Conference, the Chinese Institute of Food Science and Technology announced that the instant noodle industry stabilized and recovered in the first half of 2018, with sales volume growing 4.5% and sales value growing 8.6%. Meanwhile, the 2018 sales performance of Master Kong and Uni-President also confirmed the judgment of industry recovery. Data shows that in 2018, Uni-President achieved operating revenue of 21.772 billion yuan, up 4.6% year-on-year. Among them, the instant noodle business achieved revenue of 8.425 billion yuan, up 5.66% year-on-year. It is worth mentioning that in 2017, Uni-President's instant noodle revenue had declined by 0.71% year-on-year. Master Kong's 2018 performance was also impressive. During the reporting period, the company achieved operating revenue of 60.686 billion yuan, up 2.94% year-on-year. Among them, the instant noodle business achieved revenue of 23.917 billion yuan, up 5.73% year-on-year. Master Kong mentioned in its annual report that according to Nielsen data, in 2018, instant noodle market sales volume grew 3.2% year-on-year, and sales value grew 8.0%.

02 "Consumption downgrade" VS "Product upgrade" The recovery of the instant noodle market has given consumers the illusion of "consumption downgrade." However, this is not the case. A review of the annual reports of Master Kong and Uni-President by China News Service's Jingwei found that the growth of their instant noodle revenue is inseparable from a key word: product upgrade. According to Master Kong's 2018 annual report, under the rise of the middle class and the consumption upgrade trend, the company gradually laid out the high-end and ultra-high-end markets, redefining the original high-priced and high-end noodles as "new high-priced," and defining bucket noodles above 10 yuan as "ultra-high-end." At the same time, it created consumption scenarios and met consumer needs with multiple specifications and flavors, combined with IP cooperation and multimedia marketing to attract young families. Master Kong stated that during the reporting period, affected by factors such as optimized product mix, product upgrades, and earlier price adjustments, the gross margin of the company's instant noodle business increased by 1.44 percentage points year-on-year to 30.23%. Due to the year-on-year increase in revenue and improvement in gross margin, in 2018, the instant noodle business achieved a year-on-year increase of 14.63% in profit attributable to shareholders, reaching 1.709 billion yuan. Uni-President also mentioned in its annual report that the company continues to research and innovate in instant noodles, and with the progress of the times and changes in consumers' lifestyles, it develops self-heating foods, cold fresh noodles, and snack foods to meet consumers' needs in different occasions and times. "The recovery of the domestic instant noodle market, overall, is definitely consumption upgrade. However, during consumption, consumers have different consumption scenarios and will choose different brands and grades," said Zhu Danpeng, an analyst at China Food Industry. He pointed out that from the industrial and consumption perspectives, the domestic instant noodle market now shows the characteristics of consumption diversification. At the same time, Zhu Danpeng believes that under the consumption upgrade trend, the consumption side is forcing the industrial side to upgrade and innovate. "The reason for the decline in instant noodle sales in the past two years is precisely that the industrial side failed to match the core needs and demands of the consumption side. Once the industrial side makes corresponding innovations and upgrades, consumers' dependence and purchase frequency will recover." Meng Suhe, chairman of the Chinese Institute of Food Science and Technology, also pointed out that China's new round of consumption upgrade presents a diversified three-dimensional structure in consumption stratification. In this context, the original flat product line and price band of the instant noodle industry have been lengthened and widened, transforming towards health and nutrition. ▲Consumers are selecting instant noodles (Photo by Yan Shuxin, China News Service's Jingwei)

03 High-end instant noodles: Will consumers buy them? It is worth mentioning that under product upgrades, instant noodles are no longer synonymous with "low price." Facing the continuous launch of high-end products by instant noodle companies, how do consumers view them? The most direct manifestation of so-called "high-end noodles" is a higher selling price. China News Service's Jingwei saw in Master Kong's official flagship store that the "Express Master Chef" series has four flavors: "Braised Beef Noodles," "Scallion Pork Chop Noodles," "Sichuan Spicy Beef Noodles," and "Spicy Beef Noodles," with an average price of about 25 yuan per bowl. It is understood that Master Kong implements limited sales for the "Express Master Chef" series, with the main selling points being rich soup and imported meat chunks. ▲Master Kong's "Express Master Chef" series instant noodles (Source: Master Kong official flagship store) Not only that, according to media reports, Master Kong's "Express Master Chef" also launched four limited-edition "Fortune, Prosperity, Longevity, and Happiness" luxury noodles before the Spring Festival this year, with only 1,888 copies sold at a pre-sale price of 268 yuan for 4 boxes. Uni-President also launched the concept of "life noodles" in March 2018, planning to transform from "instant noodles" to "life noodles." In terms of high-end products, Uni-President successively launched high-priced instant noodle new products such as "Metropolitan Bistro," "One City One Flavor," and "Man Han Feast" to attract young consumer groups. A visit by China News Service's Jingwei found that the current store price of Uni-President's mid-to-high-end boxed instant noodle product "Soup Master" is 5-8 yuan, with an average price of 5 yuan in the official flagship store, while the price of "Man Han Feast" Taiwanese beef noodles is about 18.3 yuan per bowl. Facing the successive launch of "high-priced noodles" by brands such as Master Kong and Uni-President, netizens exclaimed that they "can't afford to eat."

@濮春亚today: How much does a 6-yuan bucket actually cost? Sorry, I can't afford it.

@一路顺风8101: With 30 yuan, I can stir-fry two dishes and have a bottle of beer.

@相面识心法师: If I have that much money, why would I eat instant noodles?

@空中之城堡: It's so expensive that I can't even afford noodles. ▲Image source: Weibo screenshot However, it is worth noting that it is precisely these "high-end noodles" that directly drove the growth of the instant noodle business of companies like Master Kong and Uni-President. Data shows that in 2018, Master Kong's high-priced bagged noodle sales increased 10.61% year-on-year, container noodle sales increased 5.50%, while sales of lower-priced snacks like crispy noodles decreased 23.92% year-on-year. Uni-President also mentioned in its 2018 annual report that its mid-to-high-end brand "Soup Master" continued to be recognized by the market, becoming the growth engine for the company's instant noodle business and driving profitability improvement. In this regard, industry insiders point out that as consumers increasingly pursue quality in life and consumption, companies like Master Kong and Uni-President need to continuously launch new products to meet higher-end consumer demands. The launch of high-end instant noodles is actually a measure for companies to respond to changes in market demand. Whether this measure can be effective in the long term remains to be further verified by the market. Would you buy these "high-end noodles"? Feel free to leave your comments below! Source: China News Service's Jingwei (ID: jwview) -END-