Click to read the original article for details. Chinese consumers eat 40 billion servings a year, making China the world's largest instant noodle market. Product upgrades and a shift to premium products have brought the instant noodle market back to the 40 billion servings per year mark, but amid consumption upgrades, instant noodle companies face many competitors. Only by continuous innovation and maintaining their advantages can they avoid being abandoned by consumers again. Rebound At 9:30 pm on a Friday, Wang Yuting returned to her apartment after overtime work, took a boxed instant noodle of a certain brand from the cupboard, added boiling water, and then collapsed onto the bed. After closing her eyes for 3 minutes, she changed into home clothes, took a drink from the fridge, and by then the rich aroma of the noodle soup had already wafted out. Wang Yuting's midnight snack began. Usually, she would alternate between a bite of noodles and a sip of drink. "It's that feeling of ice and fire," she told New Finance Observation reporters. Instant noodles have transformed from a staple on trains to an occasional substitute for regular meals, and the instant noodle market has rebounded. Recently, consulting firm Ries Consulting released a report stating that in 2018, out of a total of 103.6 billion servings of instant noodles sold worldwide, the Chinese market sold 40.25 billion servings, ranking first; the per capita consumption of 28.75 servings was more than double the world average of 13.6 servings. Such data was hard-won. In 2013, when China's instant noodle sales were at their peak, 46.22 billion servings were sold. After that, sales declined continuously, dropping to 38.52 billion servings by 2016. Companies naturally could not remain unaffected. In the trough year of 2016, Master Kong, the leading instant noodle brand, had seen revenue decline for three consecutive years and net profit decline for four consecutive years; another giant, Uni-President, even experienced losses and layoffs. In 2018, sales returned to the 40 billion servings mark. "This is a positive signal, at least returning to the previous prosperous period," Zhu Danpeng, a food industry analyst in China, told New Finance Observation reporters. Corporate performance also rebounded. Public data shows that Master Kong's instant noodle revenue in 2018 was 23.917 billion yuan, a year-on-year increase of 5.73%; Uni-President's instant noodle business was 8.425 billion yuan, up 5.7% year-on-year. Premiumization The rebound in the instant noodle market is not only reflected in sales volume but also in product quality, with premium products becoming a new growth point for related companies. In 2018, Master Kong's high-priced bagged noodles sales reached 9.54 billion yuan, a year-on-year increase of 10.61%, and cup noodle sales were 11.794 billion yuan, up 5.5% year-on-year. In contrast, sales of crispy noodles and other products, and mid-priced bagged noodles were 199 million yuan and 2.384 billion yuan respectively, down 23.92% and 6.68% year-on-year. In Uni-President's performance, the mid-to-high-priced "Tang Daren" brand saw steady revenue growth and became a new growth engine. Compared with the previous label of being "unhealthy," instant noodle companies are now placing more emphasis on health and nutrition in their products, and are seeking more exploration in taste and packaging, focusing on the mid-to-high-end market. "Of course, they also tried to retain consumers through price wars, but it didn't work, and that's one of the reasons," Zhu Danpeng said. With the premiumization of instant noodles, their consumption scenarios are increasing, and the consumer base is broadening. Previously, the main consumers were passengers on long-distance trains; now, office white-collar workers and the elderly have also become customers for premium instant noodles. Wang Yuting works at a foreign company in Shanghai with a monthly salary of 30,000 yuan, but every month she prepares 8-10 boxes of instant noodles. "The average price per box is around 10 yuan, and some are over 20 yuan, with various flavors. Mainly for replenishing energy after late overtime. Sometimes I add some vegetables and an egg, which is quite nice." Aunt Wu, also from Shanghai, is nearly sixty years old. "I bring them when traveling, and I also keep some at home. When I don't feel like cooking, I occasionally have a box. Since I don't eat them every day, I might as well buy good ones." It is worth noting that food delivery, which was previously considered a formidable rival to instant noodles, has seen its reputation decline in recent years. Starting in 2014, with the rapid development of mobile internet, domestic food delivery platforms rose quickly, attracting consumers with price subsidies. However, as food safety issues exposed in recent years have increased, the reputation of food delivery has gradually declined. In Zhu Danpeng's view, compared with food delivery, instant noodles have an advantage in food safety due to their standardization and branding. "In most cases, many consumers are not clear about which restaurant prepared their delivery order, where the ingredients come from, or whether the processing is hygienic. But instant noodles are at least produced by large enterprises with brand endorsement and standardized processes, so they are often more trusted by consumers. This also gives instant noodles a chance to turn the tables." Challenges Although with the transformation of companies to premium products, both corporate performance and the overall industry have shown signs of recovery, whether this situation can be sustained remains uncertain. In the context of consumption upgrades, not only instant noodles, but many similar convenient products have appeared on the market, such as convenient self-heating hot pot, convenient hot and sour rice noodles, and convenient river snail rice noodles. These products are also attractive in packaging and not cheap in price. These products can be divided into two types: one is high-appearance, high-price, high-quality, and popular among consumers; the other is high-appearance, high-price but with mediocre taste, which consumers may try once but have a low repurchase rate. This is also why the speed of new product launches in the convenient food market is fast. "This hot and sour rice noodles are from the same manufacturer as the previous one, just with a changed brand and packaging," a salesperson at a supermarket in a Tianjin community told New Finance reporters. "Some manufacturers change the brand every once in a while and sell it again." The reason for the rebranding is that the product's taste is not good, so they change the packaging to attract consumers again. Of course, instant noodle companies also need to pay attention to this issue. With the increasing demand for personalization among millennials and their higher acceptance of new things, high appearance is important, but the safety and taste of the product itself are the most important. Therefore, instant noodle companies should strictly implement safety standards and "continuously optimize, upgrade, and innovate products, and have the ability to continuously develop high-quality new products," Zhu Danpeng said. Source: New Finance Observation