---
title: "Master Kong's Profits Plummeted This Year—How Are Other Instant Noodle Brands Faring?"
description: "Master Kong, the instant noodle giant, recently reported a staggering 87% year-on-year drop in second-quarter net profit to $18 million, driven by declining beverage and instant noodle sales and higher distribution costs from increased advertising. This article reviews the performance of other major brands, including Uni-President, Baixiang, Jinmailang, Nissin, and Nongshim, amid a shrinking Chinese instant noodle market."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-09-04"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/master-kong-s-profits-plummeted-this-yearhow-are-other-instant-noodle-br-e2c723e7.md"
original_source: "https://mp.weixin.qq.com/s/9LVyhgyYzB8-mTDGuFdJnA"
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# Master Kong's Profits Plummeted This Year—How Are Other Instant Noodle Brands Faring?

> Master Kong, the instant noodle giant, recently reported a staggering 87% year-on-year drop in second-quarter net profit to $18 million, driven by declining beverage and instant noodle sales and higher distribution costs from increased advertising. This article reviews the performance of other major brands, including Uni-President, Baixiang, Jinmailang, Nissin, and Nongshim, amid a shrinking Chinese instant noodle market.

> Recently, Master Kong, the instant noodle giant, made major news when its financial report showed second-quarter net profit of $18 million, down over 87% year-on-year. The main reasons for the sharp profit decline were falling beverage and instant noodle sales, along with rising distribution costs from increased advertising.
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> For this, our editor feels a bit regretful. Think of all those late nights working overtime and long train rides when Master Kong instant noodles quietly accompanied us. The aroma of braised beef noodles would spread through the enclosed space, and late at night, nothing beat sipping that rich, savory broth to warm the body. This is a memory for many born in the 70s and 80s. Many people relied on instant noodles even more than rice. It can be said that Master Kong, as the leading brand, has become part of Chinese food culture.
So besides Master Kong, how are other brands selling? Let's take a look.
First is another competitor from the same island—Uni-President. In the first half of 2016, Uni-President's instant noodle business revenue was 4.01 billion yuan, up 9.8% year-on-year, with market share reaching 20.8%, up 2.8 percentage points from the same period last year. Despite the wave of business closures and layoffs, with everyone lamenting that money is hard to earn, Uni-President's move toward high-end products still managed to sell over 4 billion yuan!
In 1992, Uni-President instant noodles crossed the Taiwan Strait to the mainland. Initially, their shrimp noodles didn't adapt well to the mainland market and suffered repeated setbacks. After research and strategic adjustments, Uni-President rose to second place in the industry. However, with many types of instant noodles and even more flavors, consumers had many choices, and Uni-President again struggled to adapt. By 2000, Uni-President's growth stalled, and from 2004, it was overtaken by Jinmailang and Baixiang, falling from second to fourth place. A small instant noodle, yet it's one of the most fiercely competitive industries. Since products are not very differentiated, the main competitive tactic among companies is price cuts—whoever has the lowest price gets the market.
In 2015, the overall instant noodle category saw sales volume drop 6.3% and sales value drop 2.6%, with the market declining further. In this situation, Uni-President successively launched innovations to break the trend. The mid-range Laotan Sauerkraut Noodles have always been Uni-President's hottest product, but Uni-President has also firmly pursued the high-end route. They successively launched higher-priced products like Tang Daren, Ge Mian, Champion List, Manhan Banquet, and Duhui Xiaoguan. Among them, Tang Daren has sold well, raising instant noodle gross margin by 4.7% and generating profits of up to 500 million yuan. In 2015, having tasted success through product innovation, Uni-President firmly followed an innovation path, making appearance, personality, and eye-catching appeal an important strategy. In March 2016, Uni-President launched an unprecedented palace-style luxury instant noodle—the Manhan Banquet priced at 29.9 yuan—again shocking the industry!
The new product, named Manhan Banquet, is highly differentiated in both packaging and taste. Its elegant and luxurious appearance truly impressed food industry insiders. The target consumers are high-end groups aged 30 and above, such as senior white-collar workers, gold-collar workers, and department managers. The core appeal is to provide a high-end meal replacement for those who pursue quality of life but lack time to eat. Uni-President stated that the goal for Manhan Banquet is to become the highest-end instant meal replacement noodle in China over the next 3-5 years, making it the flagship brand within Uni-President's instant noodle business and a leader in industry transformation and upgrading.
Next, let's talk about two domestic veteran brands: Baixiang and Jinmailang. Actually, starting from 2004, Uni-President was overtaken by Jinmailang and Baixiang, falling from second to fourth place.
Baixiang instant noodles: As early as 2004, the company's instant noodle output was 5 billion packs, with sales of 2.3 billion yuan, ranking third in market share in the national instant noodle industry. It was called by the Chinese Institute of Food Science and Technology one of the most dynamic enterprises in China's noodle products industry. It is the largest food group company in the Henan army in terms of scale, output value, sales volume, and overall corporate strength. In recent years, although the overall trend of instant noodles nationwide has been declining, Baixiang's instant noodles have maintained good sales momentum. The reason is self-innovation and the secret bone broth seasoning, which have helped Baixiang break through industry competition.
As early as 2013, sales of Baixiang Big Bone Noodles in Henan exceeded 100 million packs. According to survey data, sales of Baixiang Big Bone Noodles family packs (five-pack) in the Henan market surpassed the total of all Master Kong flavors' family packs. Even during the traditional off-season for instant noodle sales, Big Bone Noodles maintained strong upward momentum, contrasting with Master Kong and Uni-President. Looking at the development trajectory of Baixiang Big Bone Noodles, it indeed follows the path of innovation. Baixiang Big Bone Noodles creatively integrated bone broth, which has a thousand-year food culture heritage and consumer base, into modern noodle-making technology, breaking away from pure flavor competition. The newly created bone broth category also demonstrates a more benign and feasible future development direction for the entire industry. As a national brand, it emphasizes innovation and investment in packaging design and originality. Making instant noodles that belong to China's own brand is commendable.
Jinmailang Noodle Co., Ltd., formerly Hebei Hualong Noodle Group, was founded in March 1994 and is a joint-stock enterprise. Its Jinmailang series, Dajinye series, and Dad's Kitchen "One Dish One Noodle" series have all received praise from consumers across the country. Jinmailang once became famous for its elastic noodles and ranked third in the industry. However, as competition intensified and Master Kong and Uni-President continuously penetrated channels, Jinmailang's market share was squeezed. Now, Jinmailang brand instant noodles are heavily discounted; compared to Master Kong and Uni-President, Jinmailang noodles are 3-4 yuan cheaper. They aim to retain market share with a low-price strategy. In 2015, the total revenue of Jinmailang's five business divisions—instant noodles, flour, beverages, comprehensive, and dried noodles—exceeded 10 billion yuan. However, Master Kong and Uni-President each earned $3.612 billion and 7 billion yuan respectively from instant noodles alone, so Jinmailang still lags behind the industry leaders. To differentiate, Jinmailang tends to follow a low-price route, focusing on second- and third-tier markets.
Next, let's talk about the performance of foreign instant noodle brands in China.
Nissin instant noodles is a Japanese food company famous for various instant foods, headquartered in Yodogawa-ku, Osaka. It was founded by Momofuku Ando, who developed the world's first instant noodle, Chicken Ramen, and can be considered the originator of instant noodles. Nissin has world-leading instant noodle production lines, and its products over the years have been well received by consumers for their unique market positioning and excellent quality.
Recently, Nissin announced it would invest 10 billion yen (approximately 651 million yuan) in China to develop the high-end instant noodle market. This includes building new instant noodle factories in China, adding cup noodle production lines, increasing sales staff in China to 1,000, and expanding sales of the "Cup Noodles" and "Demae Itcho" brands.
Previously, Nissin Foods had also cooperated with domestic food company Jinmailang. The two companies jointly established a new company, Jinmailang Nissin Foods Co., Ltd., in 2012. However, the good times didn't last. On November 26, 2015, Jinmailang decided to terminate cooperation with Nissin through share buyback. Some sources say Nissin's split from Jinmailang to develop independently in China was mainly to shake off Jinmailang's low-end brand image and focus on developing the high-end instant noodle market.
Speaking of Japan, we must mention the kimchi powerhouse, South Korea. In Korean dramas, eating instant noodles with spicy kimchi is a standard part of daily diet. According to surveys, Koreans consume the most Nongshim Shin Ramyun globally. Per capita consumption reaches 76 packs a year, about 6 packs a month, or 1-2 packs a week.
From January to June this year, South Korea's instant noodle exports increased 18.3% year-on-year to $123 million, with export volume up 29.5%. By destination, China was the largest export market for Korean instant noodles, accounting for 19.1% of total exports in the first half, with exports to China surging 48.2%.
Additionally, China Nongshim Foods Co., Ltd. reported sales of $210 million in 2015, up 16.6% year-on-year. Online sales also increased significantly, with sales on platforms like Taobao surging 240% in 2015. A Nongshim official said that thanks to Chinese consumers' positive reviews of products like Shin Ramyun and strong online sales, Nongshim's market performance in China has been gratifying.
According to the "2015 China Instant Noodle Brand Reputation Research Report" released by the China Statistical Information Service Center, Nongshim is increasingly favored by consumers, ranking second in the brand online reputation index and brand awareness rankings in the instant noodle industry. Nongshim's goal this year is to achieve sales of $300 million in China. To achieve this, Nongshim plans to add a production line at its Shanghai factory in January to increase production capacity.
It seems that all major instant noodle manufacturers are facing pressure from behind and fierce competition ahead. Although each looks good on the surface, the growth rate of China's instant noodle market is currently declining. According to statistics, last year, mainland China's instant noodle production was 36.249 billion packs, down 8.54% from the previous year. Among the existing 22 companies, 6 exited the market, and 13 others saw production declines. The top four companies—Master Kong, Uni-President, Jinmailang, and Baixiang—all experienced production declines. Currently, the instant noodle market is likely to be divided among several brands at the bottom, middle, and top of the pyramid.
In the end, who will break the current pattern of China's instant noodle market and have the last laugh? Let's wait and see.
This article is from WeChat public account: Xinrong Street (ID: xrj_2016).
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