Instant noodles, ham sausages, canned food, potato chips, pickled vegetables, and cola—these FMCG products labeled as "junk food"—are once again gaining popularity. Recently, consumers across the country have been frantically purchasing these foods and beverages, causing a surge in market sales. But for an industry that has been sluggish for a long time, this brief "spring" cannot reverse the downturn. Everyone Is Stockpiling 'Junk Food' In recent days, instant noodles, ham sausages, canned food, potato chips, pickled vegetables, cola, and other FMCG products often tagged as "unhealthy" or "junk food" have unexpectedly regained favor. Yi'an, a post-95s resident of Suzhou, thought she had outgrown her love for "junk food" and had no interest in it. However, on April 11, when she went shopping with friends, she unusually headed to the "junk food" shelves and bought a cartload of potato chips, biscuits, canned food, and luncheon meat, filling three-quarters of a shopping cart before stopping. "I didn't buy anything proper; instead, I stocked up on a bunch of junk food," Yi'an later summarized. Although her original intention was to stock up on filling foods, in reality, 90% of what she ended up buying was "junk food," and the remaining 10% was "proper but not entirely proper" items like instant noodles and bread. (Source: Interviewee) Qingyu, a trendsetter in Hangzhou, also recently purchased a lot of "junk food." As a mother of two, Qingyu usually firmly opposes children drinking carbonated beverages, so cola and similar items rarely appear on her shopping list. But this time, while stocking up on eggs, milk, dried vegetables, and lemon slices, Qingyu also bought three cases of cola, seven or eight bowls of instant noodles she never buys, and some rainbow candies and White Rabbit candies that she rarely gives her children. "Our family has many members, so we bought at least 5,000 to 6,000 yuan worth of goods, with snacks accounting for about 30%, considering the children's needs," Qingyu told Caijing Tianxia Weekly. Aman, a post-00s resident of Suzhou, usually has a habit of stockpiling and often feels an indescribable "satisfaction" from it, but recently she made her largest purchase of FMCG products ever. On April 13, after failing to buy groceries on online platforms like Dingdong Maicai and Miss Fresh for a week, Aman rushed to a convenience store outside her community and "angrily stocked up" on a pile of "junk food." In the end, instant noodles, potato chips, biscuits, spicy strips, candies, chocolate, and cola were all thrown into her shopping cart and brought home, nearly overflowing her two three-tier storage cabinets. Xiaoxiao, a post-00s student in Guangzhou, has recently started continuous purchasing. She logs onto e-commerce platforms almost every day, selects items she wants to eat, puts them in her cart, and places an order once she has accumulated three to six items. "The price for one online purchase usually ranges from dozens to a hundred yuan, and sometimes I also buy from offline supermarkets," Xiaoxiao said. As of now, she has stocked up about 500 yuan worth of snacks and over 100 yuan worth of milk. In fact, not only consumers in Hangzhou, Suzhou, and Guangzhou are increasing their snack purchases, but many consumers in Beijing, Shenyang, Dalian, Wuxi, and Zibo are also starting to stockpile "junk food." Fanghua, a post-80s resident of Beijing, hasn't eaten instant noodles or pickled vegetables for five or six years, and ham sausages, luncheon meat, and canned food were once on her "never eat" list, labeled as "junk food, unhealthy." But recently, during this "stockpiling wave," Fanghua also bought six large bags of instant noodles (30 packs in total) at the supermarket, including Master Kong's braised beef and tomato brisket flavors, and Uni-President and Jinmailang's pickled cabbage beef noodles, plus 15 packs of pickled vegetables, a pack of ham sausages, and some canned food. (Source: Interviewee) WeChat Index shows that since mid-March, searches for instant noodles have surged, with the index remaining above 200 million for several days. On April 16, the overall index still increased by 132.99% compared to the previous day. Some netizens have also shared their stockpiling tips on various social platforms. On Xiaohongshu, notes related to snack stockpiling have increased significantly in the past month or two, reaching over 140,000 posts, with about 10,000 notes on stockpiling instant noodles and cola. Is 'Junk Food' Popular Again? Why are consumers, contrary to their usual behavior, frantically stockpiling "junk food" they once despised? Caijing Tianxia Weekly learned that a large portion of people stockpile "junk food" out of a "better safe than sorry" mentality. Although instant noodles, ham sausages, canned food, puffed snacks, and carbonated drinks have been labeled "junk food" in recent years and abandoned by some, their convenience, easy storage, and long shelf life have made them an important part of people's stockpiling lists in critical times. Fanghua added instant noodles, pickled vegetables, and canned food to her stockpile list worth over 2,000 yuan precisely to avoid the problem of "having no food" in extreme situations. Qingyu's instant noodles were specifically prepared for her two children so they could eat on their own without adult help. In fact, these "junk foods" that are easy to prepare and store are not only widely expected to serve as emergency supplies in extreme situations but also serve as lifesaving rations for those who don't cook or can't cook. Recently, a netizen lamented on social media that they wanted to stock up on food at the supermarket but found they "couldn't cook anything," and in the end, besides buying a bunch of instant noodles, everything else was junk food. Of course, a large number of people are also frantically stockpiling these "junk foods" to provide themselves with a bit of "happiness" in critical times. Xiaoxiao told Caijing Tianxia Weekly that although she likes to stockpile snacks, she is usually rational in her consumption. Her recent frequent snack orders are actually to prevent her freedom to eat snacks from being restricted in case of unexpected situations. Aman also admitted that she stockpiles "junk food" not to "fill her stomach," but to ensure she has snacks to accompany leisure activities like gaming and watching dramas when she has to stay at home. "Otherwise, eating only instant noodles would be really uncomfortable." Yi'an's sudden decision to buy a large amount of "junk food" is also simple: recently, she hasn't enjoyed dining out and has developed a habit of eating in open spaces by the roadside. In her view, if she ever has to work from home and can't move around, but can only eat instant noodles or noodles every day, "that would be really tasteless." Qingyu's reasons for stockpiling "junk food" include emergency preparedness and providing "stress relief" and "happiness" for her children, but a large factor is also the legend that Coca-Cola has become a hard currency in Shanghai, and "one case of cola can be exchanged for three packs of soft China cigarettes." Qingyu recalled that her mother-in-law and the nanny initially didn't understand why she stocked up on cola and beer, but she believed that although her family might not need these items, they could be used as hard currency to exchange for supplies in extraordinary times. One fact is that, regardless of the reason, instant noodles, carbonated drinks, puffed snacks, and other items often labeled "junk food" have indeed seen a wave of consumption recently. On the day Yi'an went to the supermarket to stock up, she noticed that the so-called "junk food" like instant noodles and canned food were basically sold out, while some wilted vegetables in the fresh food section were left behind in large quantities. Data from Dingdong Maicai also shows that in March 2022 alone, national sales of instant noodles increased by nearly 40% compared to before the Spring Festival, ham sausages grew by nearly 50%, carbonated drinks grew by over 10%, and pickled vegetables grew by nearly 50%, with the Yangtze River Delta region seeing higher sales. According to a survey by Caijing Tianxia Weekly, these "junk foods" have also seen a certain increase in sales in Beijing supermarkets recently. At around 9 a.m. on April 14, Caijing Tianxia Weekly observed at a Wumart Duodian supermarket near Chongwenmen in Dongcheng District, Beijing, that areas with instant noodles, canned food, rice, flour, and large bottles of water had more obvious gaps than other areas. A staff member restocking shelves explained, "Recently, I've indeed noticed that items like rice, flour, instant noodles, and canned food on the shelves are emptying quickly." Sun Yan, a Master Kong restocker at a nearby Yonghui supermarket, also clearly felt this change. She found that the number of goods delivered to the supermarkets she is responsible for has increased significantly. "For example, at a larger supermarket like Wumart Duodian nearby, usually only 60 to 70 cases of instant noodles are delivered at a time, but recently it's been over 100 cases," Sun Yan said. (Photo/Caijing Tianxia Weekly) Is "junk food" really popular again? Zhu Danpeng, a Chinese food industry analyst, told Caijing Tianxia Weekly that the sales increase of so-called "junk food" caused by this stockpiling wave is a temporary rigid demand behavior, which determines that consumers don't have much choice in food at this time. "Currently, the overall rigid demand for consumption is increasing. The frequency of consumption may be decreasing, but the amount per purchase will increase," Zhu Danpeng added. "This is indeed a benefit for leading companies, as they can greatly boost sales through omni-channel layout. But it also depends on how high the consumer demand is. If it's a particularly rigid demand category, sales will definitely increase more, but if it's just a leisure positioning, sales may not increase much." Indeed, on April 14, an Oreo restocker at a Carrefour supermarket in Beijing told Caijing Tianxia Weekly that although Oreo products have seen an increase in delivery volume recently, the increase is very limited, "about one extra case per delivery, with deliveries still twice a week." Cannot Reverse the Downturn Instant noodles and other products have been labeled "junk food" for nearly two decades. In 2003, with the emergence of a list called "The Top Ten Junk Foods Announced by the WHO," the label "junk food" spread widely for instant noodles, canned food, ham sausages, carbonated drinks, and puffed snacks. Although the WHO later refuted in 2018 that it had never published a junk food list, the stereotype of "junk food" had already become deeply rooted in people's minds. Instant noodles and ham sausages, which have long worn the "junk food" label, have inevitably faced development difficulties in recent years. The most typical is instant noodles. With the rise of food delivery and fewer consumption scenarios, the overall decline in instant noodle sales has long been an indisputable fact. Relevant data shows that since 2013, instant noodle sales have been on a downward track. In the domestic market, instant noodle sales were 46.22 billion packs in 2013, dropped to 44.4 billion packs in 2014, and fell to 38.52 billion packs in 2016. By 2020, driven by the pandemic, instant noodle sales rarely saw an uptick. Nielsen data shows that in 2020, the overall sales volume of the instant noodle industry increased slightly by 0.1% year-on-year, and sales revenue increased by 4.7% year-on-year. Online market growth played a significant role. According to data provided by Baiguan Technology to Caijing Tianxia Weekly, from 2019 to 2020, sales of instant noodles on the Tmall platform alone rose from a monthly low of just over 10 million packs to a monthly high of nearly 50 million packs, showing a clear increase. However, this upward trend reversed again in 2021. Nielsen data shows that in 2021, the instant noodle industry's sales volume declined by 4.0% year-on-year, and sales revenue fell by 2.7%. That same year, the net profits of Master Kong and Uni-President, the leading instant noodle companies, both declined. Specifically for the instant noodle business, although Master Kong still ranked first with a 45.7% market share, its corresponding revenue and net profit decreased by 3.60% and 26.67% year-on-year, respectively. Uni-President's instant noodle business was no exception, with revenue shrinking from 9.055 billion yuan the previous year to 9.007 billion yuan in 2021. Coupled with the recent "soil pit pickled cabbage" incident, Master Kong and others are not having an easy time. According to Li Xingmin, a brand and industry strategy expert, the negative impact of the "soil pit pickled cabbage" incident has not fully subsided as of now. Ham sausages, which once swept the country alongside instant noodles, can be considered "partners in crime." On one hand, ham sausages, as the "golden partner" of instant noodles, have inevitably seen a significant reduction in consumption scenarios due to the emergence of food delivery and other business formats. On the other hand, frequent quality issues have gradually lowered people's value expectations for ham sausages. More importantly, with the improvement of living standards and the maturity of cold chain refrigeration technology, "low-temperature meat products" mainly using pasteurization are gradually replacing "high-temperature meat products" represented by ham sausages, becoming another major trend in the meat product market, as they can better retain the nutritional components of meat and meet human health needs. This leaves ham sausages with sluggish growth, slowly advancing in stock competition. This trend is clearly reflected in the annual reports of industry leader Shuanghui. Data shows that from 2013 to 2016, Shuanghui's high-temperature meat product revenue declined for four consecutive years, from 15.7 billion yuan to 14.044 billion yuan. Although it gradually increased to 16.17 billion yuan by 2019 in the following three years, the average annual growth over six years was less than 1%, and its revenue share had already dropped from 35% in 2013 to 26.81% in 2019. After the 2020 semi-annual report, "high-temperature meat products" were no longer listed separately but merged with low-temperature meat products into packaged meat products. Similarly, in recent years, although the retail scale of China's puffed snack market has not declined like instant noodles and ham sausages, its growth rate has been decreasing year by year, from 10% in 2014 to 8% in 2019, with a trend of continuous slowdown. As for the carbonated beverage market, it also began to decline around 2014, with national carbonated beverage sales dropping from 18.1 million tons in 2014 to 17.44 million tons in 2018. In Li Xingmin's view, food categories including cola, canned food, and instant noodles have actually entered a stage of stock competition. "It's unlikely there will be significant growth, but it's entirely possible to redo them with new socialized gameplay, form a new interesting brand, and be popular for a few more years." In fact, these food companies have indeed been trying various methods in recent years to seek new opportunities, such as Master Kong and Uni-President's exploration of the mid-to-high-end market, and the sugar-free concept in the carbonated beverage sector. However, as of now, the only one that has achieved relatively obvious success seems to be the sugar-free concept. China Industry Information data shows that from 2014 to 2020, the market size of China's sugar-free beverage industry grew from 1.66 billion yuan to 11.78 billion yuan, with a compound annual growth rate of 38.69%, and is expected to reach 27.66 billion yuan by 2027. Among them, the market size of sugar-free carbonated beverages grew from 600 million yuan in 2014 to 6.69 billion yuan in 2020, with an average annual compound growth rate as high as 49.47%. This has, to some extent, halted the previous decline in China's carbonated beverage market, allowing it to regain a 5.8% year-on-year growth in 2019, with production rising to 18.453 million tons, and further increasing to 19.71 million tons in 2020. Now, can this sudden wave of "junk food" stockpiling really make instant noodles, ham sausages, canned food, and carbonated drinks, which many people once gave up on, "popular" again? "This should be more of a phased effect," Li Xingmin told Caijing Tianxia Weekly. "People who previously loved instant noodles and ham sausages may have had to give them up due to the 'junk food' label. During recent purchases, it's not ruled out that they feel the product quality has improved, reactivating consumption. But in most cases, the short-term stockpiling effect won't actually change consumers' inherent views of a product." Zhu Danpeng also believes that the current stockpiling wave is unlikely to fundamentally change the status quo of these "junk foods." To reverse the downturn, more efforts need to be made by food companies themselves. *(At the request of interviewees, Yi'an, Qingyu, Aman, Xiaoxiao, Fanghua, and Sun Yan are pseudonyms.) Source: AI Finance and Economics (ID: aicjnews) Author: Zhou Xiangyue Are you "watching" me?