According to AC Nielsen data, China's instant noodle consumption exceeded 40 billion servings in 2018, returning to the '40 billion servings club'. In the first half of 2019, sales in China's instant noodle market rose 7.5% year-on-year. According to Master Kong's 2019 interim results, its instant noodles alone sold 11.5 billion yuan in the first half of 2019, with revenue up 3.68% year-on-year, contributing 37.85% of the group's total revenue.

As the instant noodle market recovers, Master Kong, one of the industry leaders, has begun selling energy bars. Recently, Master Kong quietly launched the 'Sunshine Youxian' brand, officially entering the meal replacement energy bar field. This meal replacement bar comes in boxes of 7 bars, each 30g, with two flavors: light original and yogurt berry. The price is 63 yuan per box.

Master Kong 'Sunshine Youxian' energy bar (Image source: Master Kong Tmall flagship store)

Master Kong did not create any hype before or after the product launch. The new product was released on October 9 on Master Kong's Tmall flagship store, with the product name noting 'Viya live broadcast exclusive'. As of the evening of October 24, monthly sales show 38 orders, with no buyer reviews.

The instant noodle market is still there, but Master Kong is entering the meal replacement market. Why is Master Kong, one of the 'twin giants' of instant noodles, crossing over to energy bars? What is the gap in China's energy bar market? What market potential does Master Kong's new product have?

-01- How many 'hungry people' are there in China?

According to Euromonitor data, China's meal replacement market reached 5.73 billion yuan in 2017, and is expected to exceed 10 billion yuan by 2020, achieving nearly double growth. Additionally, according to the latest market research report from Technavio, the global energy bar market is expected to grow at a compound annual growth rate of nearly 5% from 2019 to 2023, with an increase of $15.6 billion, approximately $110.27 billion.

Global energy bar market forecast (Image source: technavio)

In the European and American markets, the energy bar category is already very mature. The success of energy bar products in these markets has attracted many domestic and international brands to join, because compared to the mature European and American markets, the meal replacement market in China is still a blue ocean and in a growth stage. Currently, both 'senior players' and 'junior players' are trying to attract 'Chinese hungry people' with products of different characteristics.

Let's first look at the senior players in the domestic energy bar market:

'Hungry? Grab a Snickers!' As early as 1993, Mars' Snickers entered the Chinese market. Many domestic consumers' initial understanding of energy bars comes from Snickers. When Snickers first entered the Chinese market, it was very successful. For a long time, when it came to energy bar brands, Chinese consumers only thought of 'Snickers'.

Snickers (Image source: pixabay)

The reason it 'plays well' in the Chinese market largely depends on its product positioning. From the beginning, Snickers established three positions: sports, energy, and hunger relief, combined with its 'hunger-style' advertising, quickly imprinting its image on the public. In its advertising, the stark character comparisons, sports scene settings, and 'sales pitch' style absurd ads made people complain but also remember the brand image: our product can supplement energy. When hungry or weak, eat a Snickers.

-02- Not only Snickers and Master Kong are targeting China's 'hungry people'

In fact, besides the well-known Snickers and Master Kong, which recently launched a new product, there are more energy bar brands in the domestic market.

In China, By-Health, as a leading brand in dietary supplements, has two protein bars under its sports nutrition brand Jianleduo: Jianleduo Protein Bar and Guanjianneng Protein Bar.

By-Health Guanjianneng Protein Bar (Image source: By-Health flagship store)

Additionally, Compet, one of the earliest companies to enter the sports nutrition industry, is committed to using nutritional foods. It currently sells energy bars in three series: Compet FAST Acceleration Series, Golden Protein Bar Series, and Wild Walker Outdoor Nutrition Bar Series.

Compet FAST Acceleration Series Energy Bar (Image source: Compet official website)

Foreign energy bar brands have also begun to lay out the Chinese market in recent years. It is worth noting that although they are all energy bars, these three major brands target Chinese consumers with different product characteristics.

KIND (registered as BE-KIND in China), a healthy snack brand invested by Mars, is the world's third-largest energy bar retailer. Its energy bars focus on low sugar, health, and natural ingredients.

Last year, KIND energy bars made a high-profile appearance at the China International Import Expo, bringing a series of new products including the healthy snack brand BE-KIND, and began online sales via e-commerce at the beginning of this year. The BE-KIND series focuses on 'nut bars', claiming to be 'Healthy Snacks', using high-quality nut ingredients.

This year, Mars established its first production line for KIND in China, investing $45 million to expand its production line in Zhejiang, with $20 million used to produce KIND's fruit and nut energy bars.

BE-KIND Energy Bar (Image source: BE-KIND Tmall flagship store)

Furthermore, alandv, a sub-brand of Aland Group, focuses on sports nutrition and healthy snacks. Its main products include healthy snacks like alandv Protein Bar and Grain Bar, as well as natural lycopene soft capsules, glucosamine chondroitin vitamin D calcium tablets, and other products.

Based on Chinese people's exercise habits and nutritional needs, alandv has created two meal replacement bar product lines: Energy Grain Bar and Protein Bar, each with four flavors. ALANDV's meal replacement bars come in a variety of flavors, with the product feature of providing nutrition and energy that can be supplemented anytime, anywhere for different consumer groups. Moreover, based on Chinese consumers' taste habits, alandv has upgraded and improved the products—'crispy and soft texture' and sweetness that is delicious without guilt.

alandv Energy Grain Bar (Image source: alandv official website)

Muscletech, known for sports supplements, has launched whey protein bars for fitness enthusiasts, including flavors like sea salt cheese, strawberry yogurt, cocoa almond, and mixed. Unlike other meal replacement bars, the product features 30% high protein (5 types of protein), low sugar, and low fat.

Muscletech Protein Bar (Image source: Muscletech Tmall flagship store)

-03- One bite of instant noodles, one bite of energy bar: Master Kong unlocks new meal replacement tricks

'Don't be a hungry person, check in daily, full of energy, and a fat-free diet is not advisable.'

These are the product features Master Kong claims when launching the 'Sunshine Youxian' energy bar. 'Have you checked in today?' In the packaging design, Master Kong specially set up a 'convenient check-in function on the outer box' for consumers.

From 'premium noodles' and 'slow-cooked broth' series instant noodle products to the recent energy bars, Master Kong is still the old master solving the nation's hunger problem, but it is becoming healthier.

Why are Master Kong's products becoming healthier?

1. To understand Master Kong, you must first look at the market

Master Kong's launch of energy bars seems to have no direct connection to its existing main business. But brand innovation, no matter how it changes, cannot be separated from the market.

The instant noodle market is recovering, and Master Kong remains firmly in the leading position in the FMCG industry. But in reality, Master Kong is 'sitting on pins and needles'. When the instant noodle market hit its historical low, Master Kong's performance also declined for five consecutive years. In 2015 and 2016, Master Kong's operating revenue fell by about 10%, and net profit fell by more than 30%. In September 2016, Master Kong was removed from the Hang Seng Index constituents, its market value fell by nearly HK$100 billion, and it fell into the embarrassment of major investment institutions downgrading its rating.

China's instant noodle sales statistics from 2013 to 2018 (Image source: China Industry Information Network)

This may have served as a wake-up call for Master Kong: behind the market where 'when one rises, all rise; when one falls, all fall', the consumption habits of emerging consumers have changed, and it is time for Master Kong to 'seek change'.

A bowl of braised beef noodles can become the memory and sentiment of several generations, but consumers may miss 'old brands' and 'old products', but the market will not. If it does not innovate and seek change, Master Kong may slowly become the 'braised beef noodles' and 'Master Kong black tea' in people's memories.

2. Master Kong has long had the 'intention to change'

Before launching energy bars, Master Kong's instant noodle category was already 'seeking change'.

First, Master Kong instant noodles have become healthier.

Master Kong's previously launched series such as 'Fresh Vegetable Noodles', 'Black and White Pepper', 'Golden Soup', and 'Soup Master' were all developed based on the benchmarks of 'less additives, rich flavor, delicious, healthy, and nutritious'. According to Mintel's Global Food and Beverage Trends Report 2019, consumers are no longer willing to compromise on health and quality for convenience. The rising new middle class in China is increasingly pursuing nutrition, quality, and health.

In June this year, Master Kong officially signed cooperation agreements with Peking University and Waseda University to conduct scientific and technological research in the field of nutrition and health; it will carry out and promote in-depth research on frontier topics in areas such as health big data, artificial intelligence, elderly food nutrition, preventive medicine, and sports medicine through industry-university collaboration. In July this year, Master Kong created a 'China Ice and Snow Customized Edition Master Kong Suda Noodle House' for the Winter Games, aiming to provide sports nutrition food for the national ice and snow team training.

Launching series products and technical cooperation with universities in the field of nutrition and health, and creating 'ice and snow customized edition' food—these signs indicate that Master Kong has begun to pay attention to sports nutrition and health, wanting to build a 'healthier' Master Kong image. Gao Zhongxiu, director of Master Kong Holdings' instant noodle business, also said, 'The China Ice and Snow customized products, while ensuring the nutrition of ice and snow athletes, will also be promoted to the general sports population, so that the public sports population can eat sports nutrition meals suitable for them.' That is to say, in addition to professional athletes, Master Kong also hopes that such sports nutrition products can face more consumer groups.

'Sunshine Youxian' energy bar (Image source: Master Kong Tmall flagship store)

And energy bars are exactly such a nutritional product for the public and the broad sports population.

Moreover, the independent, portable packaging and the check-in label for consumers all indicate that Master Kong's products are also moving closer to young consumers.

It seems that Master Kong is crossing over to energy bars, but from the 'healthier' instant noodles and its participation in the sports nutrition field, Master Kong's new product launch has actually been quietly planned for a long time.

-04- Conclusion

Currently, the development of the energy bar market in China is worth looking forward to. There is no national standard for the energy bar category in China. Compared to other food categories, it is not yet a mature category.

Today, there are actually many energy bar brands and products, but they are all 'hidden in the city, hidden in consumers'. However, consumers' awareness of products actually comes from brands, just as everyone is much more familiar with Snickers than other brands. How to guide consumers to understand domestic energy bar products and brands is still a direction for filling the market gap.

Master Kong's shift to energy bars is, on the one hand, Master Kong seeking innovation, and on the other hand, it is also this old brand's new thinking about the healthier market and nutritious and healthy food.

Source: FBIF Food & Beverage Innovation (ID: FoodInnovation)

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