---
title: "Riding the Waves on Stage, Honing Skills Behind the Scenes: Leading Companies Drive Premiumization of the Instant Noodle Market"
description: "In 2020, the instant food industry saw remarkable growth, with instant noodles standing out. In the first half of the year, China's instant noodle market grew 5.6% in volume and 11.5% in value year-on-year, driven by leading companies like Master Kong, which achieved record revenue and profit growth. The industry is undergoing premiumization, with digital strategies and brand building playing key roles."
author: "New Distribution"
publisher: "New Distribution"
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published: "2020-10-12"
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# Riding the Waves on Stage, Honing Skills Behind the Scenes: Leading Companies Drive Premiumization of the Instant Noodle Market

> In 2020, the instant food industry saw remarkable growth, with instant noodles standing out. In the first half of the year, China's instant noodle market grew 5.6% in volume and 11.5% in value year-on-year, driven by leading companies like Master Kong, which achieved record revenue and profit growth. The industry is undergoing premiumization, with digital strategies and brand building playing key roles.

Years later, when reviewing the development of instant food, 2020 will definitely be a significant chapter. **In early September, at the 20th China Instant Food Conference, representatives from leading companies such as Master Kong, Uni-President, Synear, and Keming all attended.** In the volatile first half of 2020, instant food bucked the trend and grew against the tide, becoming one of the fastest-growing sectors in the entire food industry.
Among them, instant noodles performed most prominently. According to Nielsen data, from January to June this year, the overall sales volume of China's instant noodle market increased by 5.6% year-on-year, while sales value achieved double-digit growth of 11.5%.
Among the leading companies, **Master Kong's performance was particularly impressive. Its instant noodle business achieved operating revenue of 14.91 billion yuan in the first half, a year-on-year increase of 29.16%, and net profit of 1.694 billion yuan, a growth of 93.67%, setting new highs in both total amount and growth rate.** Uni-President and Nissin also achieved double-digit growth in both revenue and net profit year-on-year.
**-01-**
**Internal and External Challenges and Opportunities, Steady Development of the Instant Noodle Market**
In recent years, despite various voices claiming that the era of instant noodles is over, in fact, human nature does not change, and the lazy economy that pursues convenience and simplicity has always been a trend. While internet food delivery has become a daily habit, consumers' love for instant noodles has not diminished but increased, accompanied by product iteration and innovation. According to the World Instant Noodles Association report, the total demand for instant noodles in the Chinese market in 2019 was 41.45 billion servings, a five-year high. The explosive growth in the first half of 2020 further confirmed this; among many foods, instant noodles remain the first choice for consumers to meet their basic needs.
In the first half of this year, the overall sales volume of the instant noodle market achieved a year-on-year growth of 5.6%, with sales value growing 11.5% year-on-year. The activation of consumer demand drove rapid market growth. Not only did traditional forces remain strong, but newcomers also eagerly tried their hand.
From January to June, almost every month saw emerging players receive financing in the tens of millions. According to data from the National Bureau of Statistics, as of September, more than 8,500 new instant food companies were added nationwide, a year-on-year increase of 23.5%. In response, **Bin Fu Capital, which is deeply involved in the food sector, predicts that the entire instant food track can grow by another 100 billion yuan in output value in the next 3-5 years.** With the influx of hot capital, a fierce competition seems inevitable. However, in this race in the instant noodle market, giants have long been leading. According to Nielsen data, **the four major instant noodle brands, including Master Kong and Uni-President, have occupied 75%-80% of the market share, and the high-end market has been occupied by the top three with 85%.**
While the market is growing and remains highly concentrated, premiumization has become the trend of industry iteration and upgrading. Not only has the proportion of high-end product sales among leading companies continued to increase, but the average price of products across the market has also further risen.
Authoritative research institution Frost & Sullivan predicts that the CAGR of high-end instant noodle sales in China from 2016 to 2021 will reach 12%, far exceeding the overall industry growth rate during the same period. It is not difficult to see that high-end instant noodles will continue to be the main growth engine of the industry. Under the industry trend focusing on premiumization, major brands also have their own strategic emphases. Overall, listed companies represented by Uni-President and Nissin continue to increase their high-end products, while numerous domestic enterprises continue to engage in fierce price wars.
At the same time, Master Kong seems to be taking bigger steps in iterative upgrading. Since 2019, the proportion of Master Kong's high-priced noodle sales has increased to 45%, and the number of national warehouses, distributors, and direct distributors has achieved significant growth of 87.9%, 46.5%, and 33.9%, respectively. Its market share in volume/sales value has also achieved year-on-year growth. To this end, New Distribution reporters went deep into the front-line market and interviewed distributors in some counties and cities.
According to a distributor in Xuzhou, Jiangsu, who told reporters: "Master Kong's market competitive advantage lies in its strong brand power and service capability. In the outlets they cover, products sell better than competitors, they do more activities, and their after-sales response to product recalls is also timely. So once store owners trust the brand, no matter what new products Master Kong launches in the future, the owners are very supportive. Because they trust the brand and the service." He also told reporters: "Compared to biscuits and dried noodles, instant noodles are actually short-shelf-life products. In outlets in county towns and rural markets, although terminal store owners are not too sensitive to product dates, Master Kong always achieves the most standard shelf-life management, ensuring the freshness of product dates. This is difficult for peers to achieve, relying on Master Kong's complete management mechanism and unremitting persistence." Market data also confirms the above view. In the national chain supermarket channel, Master Kong's instant noodle sales data has a significant lead. Taking July as an example, while the month-on-month growth rates of various brands continued to decline, Master Kong's sales growth rate still maintained a lead.
**In this regard, a Master Kong representative told reporters that the strength in the chain supermarket channel is not only due to the expansion of the national distribution network but also benefits from the empowerment brought by the digital strategy, which is bringing disruptive innovation to the enterprise.**
**-02-
**Behind the Advantage, the Digital Strategy is Indispensable** **Entering 2020, digitalization has shifted from a high-frequency Internet term to a common consensus across industries.** Especially in the market changes in the first half of this year, the returns brought by enterprises' digital upgrading have been vividly demonstrated. Facing the unstable socio-economic situation, enterprises with digital capabilities have become more advantageous, while those still adhering to old methods have exposed their own problems. Let's look back at the instant noodle market; the situation is no different. Powerful giants are increasing their digital application in production and operation management, and emerging forces are also experiencing the empowerment of new technologies through digital marketing. **On this path of innovation, Master Kong, as the industry leader, has taken firm steps, carrying out comprehensive digital innovation and upgrading of its original business system.** With its self-developed channel intelligent distribution system and big data artificial intelligence platform, Master Kong can, based on the existing sales model, use machine learning for business district prediction, achieve responsive distribution, and provide rapid response to consumer needs, thereby achieving brand sinking and expanding sales share in offline channels.
During special periods, Master Kong, with the support of its digital operation system and shared center data integration, can still maintain seamless coordination of production, sales, and logistics for instant noodles.
**1. Ensuring Resumption of Work and Production, Big Data Makes It One Step Ahead** When consumer demand surged, major instant noodle companies also faced difficulties such as resuming work and production, as well as logistics and distribution. Facing the important task of stabilizing people's livelihoods, instant noodle companies obviously need to rise to the challenge and provide solid guarantees for the basic needs of the people. How to win this battle is more reflected in the core of the enterprise, requiring both courage and wisdom. **This wisdom refers to the enterprise's adaptability.** In a case study by Boston Consulting Group's Henderson Institute on the digitalization of operations management for international companies such as Volvo and Puma, it also mentioned that Master Kong overcame difficulties and took the lead in resuming work and production thanks to its digital management system.
For example, when demand for instant noodles surged, Master Kong detected it through its digital operation system, quickly adjusted its supply chain, and restarted production at the first opportunity. At the same time, using big data guidance, it quickly solved problems such as production-sales coordination, logistics transportation, and raw material supply, leading the industry in fully restoring capacity.
**2. Helping Enterprises Gain Insights, Targeted Satisfaction of Consumer Needs** Through cooperation with Internet platforms such as Tencent and JD.com, Master Kong has also preliminarily achieved the return of channel data through big data mining, as well as in-depth analysis of consumer opinions collected from social media platforms such as WeChat, Weibo, and Douyin.
**After understanding consumers' real thoughts, it adopts targeted marketing methods, develops new products or adjusts product strategies accordingly, builds more consumption scenarios, and engages in deeper interaction with consumers.** When the system detected the growth of home consumption demand, Master Kong began to adjust the focus of instant noodle production and sales to products for family consumers. For example, the Suda Noodle House family pack, Big Food Bag, Big Food Bucket, and the newly created "Hand-Pulled Noodles" for the 25-35 age group of new urbanized groups are all explorations by Master Kong in the context of big data for new consumption scenarios and consumer groups.
**3. Smart Marketing, the Final Touch to Ensure Brand and Effect Integration** **With targeted products, appropriate channels are equally indispensable.** While many brands invest heavily in advertising on popular online variety shows, Master Kong focuses more on the consideration of brand and effect integration, choosing "smart marketing" that speaks with data. Moments, short videos, and live streaming rooms have thus become important marketing positions. Taking e-commerce live streaming as an example, in June this year, Master Kong brought its new Suda Noodle House self-heating noodles to Viya's live streaming room, achieving a good result of selling 70,000 bowls in 5 minutes. Hand-Pulled Noodles, after launch, were continuously sold out in Luo Yonghao's and Xie Na's live streaming rooms, with very hot sales.
With the comprehensive advancement of its digital strategy, Master Kong has gained a lot in responding to market changes this year. In addition to setting new performance records, its brand recognition has also been further enhanced. Not long ago, in a case study at Harvard Business School for Chinese enterprises, Master Kong was selected as an outstanding representative, showcasing the style of a national enterprise in front of global business elites.
**-03-
**In the Final Analysis, the Core Competence of an Enterprise Cannot Be Replaced** **If the most direct manifestation of digital empowerment is the growth in product sales and enterprise performance, it also deeply affects the overall image of the enterprise in invisible places.** As a leading enterprise in the industry, Master Kong's ability to continuously achieve self-breakthroughs is inseparable from its core competence—the long-term building of brand influence. According to the "2020 National Health Insight Report" released by Dingxiang Doctor Data Research Institute, the public's definition of health has shifted from "not getting sick" to "eating well, sleeping well, and feeling good," indicating a fundamental change in national health concepts.
Facing the increasing attention to dietary health, Master Kong has always controlled quality with high standards in food safety. It has invested up to 500 million yuan to establish an international-level food safety testing center, with a food safety management team of more than 3,000 people, capable of conducting more than 3.5 million tests on related raw materials and final products each year.
In addition, Master Kong has also carried out close cooperation with the China Space Foundation, conducting space science education and civilian applications of space technology. Its products even became China's first "space noodles" not long ago.
In the new era of digitalization, another important trend among consumer groups is the increasing emphasis on corporate social responsibility and sustainable development. OC&C's research report "The Borderless Generation" even points out that sustainable development is one of the most concerned topics for Generation Z, the future main consumer force.
In this regard, Master Kong has always adhered to the internationally accepted concept of "doing good to do well," emphasizing the active development of sustainable development actions beneficial to the environment, society, and people and families.
Specifically, as a core enterprise, Master Kong, together with upstream and downstream suppliers, distributors, and retailers, connects the channel linking 40 million farmers and 900 million consumers, forming a complete industrial chain. While meeting the needs of consumers nationwide and serving the people's better life, it also enhances the well-being of employees and families of all parties in the industrial chain, bringing long-term performance improvement.
Not long ago, in a baseline survey report by the United Nations Development Programme on Chinese enterprises' awareness of sustainable development goals, Master Kong stood out from more than a hundred enterprises and was selected as an excellent case along with Baidu and Yibao Plan.
As a result of a series of core competence building efforts, Master Kong's brand image has always been at the forefront of FMCG. **In the 2020 Most Popular Chinese Brand Ranking for FMCG just released by Kantar Consulting, Master Kong ranked 3rd, being the only instant noodle company in the TOP 10.**
**In the business world, there has been a consensus for many years that brand influence, as an intangible asset, is the most core competence of an enterprise.** Brand influence is not only directly reflected in products but also implemented in every link of production and operation.
When an enterprise has an advantage in brand influence, it also possesses an irreplaceable core competence. Taking Master Kong as an example, this view has been fully verified. With the continuous advancement of its digital strategy, where can Master Kong extend the boundaries of industrial iteration and upgrading with its core competence advantage? I believe the answer will be seen soon.
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