---
title: "The 'Great Recession' of Instant Noodles?"
description: "According to the latest Nielsen data, in the first half of 2014, domestic instant noodle sales volume fell 6.5% year-on-year, while overall market sales value declined 1.9%. Unlike China's declining instant noodle industry, in Japan, Europe, and the US, the industry is still growing, with the UK instant noodle market growing about 10.7% annually. Industry insiders attribute the decline to insufficient innovation and vicious competition, but see growth potential in lower-tier cities and rural areas."
author: "李睿奇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2014-10-27"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/the-great-recession-of-instant-noodles-8e320cd1/"
markdown: "https://xinjignxiao.com/en/articles/the-great-recession-of-instant-noodles-8e320cd1.md"
original_source: "https://mp.weixin.qq.com/s/vrardZ-Sg3BMWuYdnKH95w"
translation: "https://xinjignxiao.com/zh/articles/%E6%96%B9%E4%BE%BF%E9%9D%A2-%E5%A4%A7%E8%A1%B0%E9%80%80-8e320cd1.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-great-recession-of-instant-noodles-8e320cd1/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# The 'Great Recession' of Instant Noodles?

> According to the latest Nielsen data, in the first half of 2014, domestic instant noodle sales volume fell 6.5% year-on-year, while overall market sales value declined 1.9%. Unlike China's declining instant noodle industry, in Japan, Europe, and the US, the industry is still growing, with the UK instant noodle market growing about 10.7% annually. Industry insiders attribute the decline to insufficient innovation and vicious competition, but see growth potential in lower-tier cities and rural areas.

**Tip: Click the blue text above to follow "FMCG Distributor Professional Consulting" for more marketing and distributor internal management insights.**

**Introduction**
- According to the latest Nielsen data, in the first half of 2014, domestic instant noodle sales volume fell 6.5% year-on-year, while overall market sales value declined 1.9%.
- Unlike China's declining instant noodle industry, in Japan, Europe, and the US, the industry is still developing like a sunrise industry. In recent years, the UK instant noodle market, including instant noodles, cup noodles, and quick-heat noodles, has grown by about 10.7% annually.
- "In the past, the instant noodle consumer market was mainly concentrated in first-tier large cities. But in recent years, with changes in consumption structure, China's mid-to-high-end consumer groups no longer favor such products. However, instant noodles still have growth potential in second- and third-tier cities, as well as rural areas."
- In the view of many industry insiders, vicious competition has undoubtedly hindered the industry's development. Endless price wars among large enterprises, while hitting competitors, also erode their own profits and damage other domestic instant noodle brands, lowering the industry's overall profit level.

Decline is a fact, even though it defies market development logic. "We can't let consumers eat the same instant noodles for 20 years!" At the 14th China Instant Food Conference, which concluded in September, an industry insider's remark highlighted the long-standing problem of insufficient innovation in China's domestic instant noodle industry.

As urban life accelerates, quick and convenient food products are favored by consumers, but the once-thriving instant noodle products are gradually being neglected. The entire domestic instant noodle industry is now stuck in a dilemma of sluggish sales growth and difficult business operations. According to the latest Nielsen data, in the first half of 2014, domestic instant noodle sales volume fell 6.5% year-on-year, while overall market sales value declined 1.9%.

In fact, since domestic instant noodle sales peaked at 50 billion packs in 2010, the industry's sales volume has been shrinking, and market sales value growth has been weak, with annual growth rates in single digits, whereas previously growth rates were above 10%.

Unlike China's declining instant noodle industry, in Japan, Europe, and the US, the industry is still developing like a sunrise industry. For example, in the Japanese market, instant noodles are not only loved by consumers but have also become part of Japanese culture; gift-pack instant noodles are even exchanged as small gifts. In the UK, the instant noodle market is expanding continuously. According to a survey by UK market research agency "MySupermarket," the UK instant noodle market, including instant noodles, cup noodles, and quick-heat noodles, has been growing by about 10.7% annually in recent years.

Even though Chinese people have a history of eating instant noodles for decades, market research shows that China's instant noodle market is far from saturated. "Currently, the per capita annual consumption of instant noodles in China is over 30 packs, only half of the per capita consumption level in mature markets like Japan and South Korea. This shows that the industry's growth difficulties are not due to a lack of potential demand groups," Jian Aihua, a food industry researcher at CIC Consulting, told *Global Entrepreneur*.

Given the demand for convenient and quick food, and the potential for development in the instant noodle market and industry, why is China's instant noodle market showing signs of decline?

**Bottlenecks**

"In recent years, product upgrades and innovation within the instant noodle industry have been slow, and products fail to meet consumer demands for health and taste diversity, so consumer preference has weakened. This is one of the main reasons for the decline in sales," said Jian Aihua. She believes that although busy consumers have convenience needs, as income levels rise, consumers also pay more attention to health factors.

Besides changes in consumer demand, the current consumer market has also transformed. "In the past, the instant noodle consumer market was mainly concentrated in first-tier large cities. But in recent years, with changes in consumption structure, China's mid-to-high-end consumer groups no longer favor such products. However, instant noodles still have growth potential in second- and third-tier cities, as well as rural areas," Ma Wenfeng, an analyst at Beijing Orient Agribusiness Consultant Co., Ltd., analyzed for *Global Entrepreneur*.

However, instant noodle companies have not noticed or seized this change in time. A person in charge of the food division at Uni-President Enterprises (China) Investment Co., Ltd. bluntly told *Global Entrepreneur*: "Rather than saying consumers have abandoned instant noodles, it's more accurate to say the industry has abandoned consumers." He believes that for years, the instant noodle industry and companies have failed to keep pace with market development, neglected value enhancement, and deviated from rapidly rising consumer demands.

For most instant noodle companies, their focus remains on product marketing, and some have even fallen into excessive competition due to distribution, promotions, and other marketing activities.

The much-publicized "promotion war" is the best evidence. At the end of 2013, Uni-President launched an upgraded version of "Braised Beef Noodles," not only adding more meat and eggs but also promoting it with free ham sausages. Master Kong immediately declared war, with its chairman Wei Ying-chou explicitly stating that Master Kong would not stop giving away ham sausages in its Laotan and Lurou series instant noodles until its market share reached 70%. To compete for market share, Uni-President and Master Kong have also engaged in multiple price wars.

In the view of many industry insiders, vicious competition has undoubtedly hindered the industry's development. Endless price wars among large enterprises, while hitting competitors, also erode their own profits and damage other domestic instant noodle brands, lowering the industry's overall profit level. "Price wars make leading companies more entrenched, leading them to lack motivation to develop new products."

In addition, because the current instant noodle industry standards lag behind the pace of enterprise development, it is difficult for instant noodle companies to protect their rights, leading to serious product imitation and trend-following among companies, which to some extent dampens enthusiasm for product innovation and R&D.

**Innovation**

How to reshape a healthy competitive environment, improve innovation capabilities, and break the growth dilemma has become an urgent task for the instant noodle industry.

Currently, affected by rising sales costs, Uni-President's instant noodle business lost 142 million yuan last year. Under performance pressure, Uni-President stated that since September, its instant noodles no longer come with free ham sausages. Master Kong said it would gradually cancel the ham sausage giveaways and improve gross margins, depending on market reactions. This suggests that the more than one-year promotion war between the two instant noodle giants may be coming to an end.

Although innovation has lagged, major Chinese instant noodle companies have begun to focus on product innovation, trying to meet consumer demands for healthy lifestyles and taste diversity to win back the market.

In May this year, Master Kong, which insists on "this is the taste," launched its non-fried noodle product "Aixian Dacan"; Uni-President launched "Gemian" with butterfly-shaped noodles in August, claiming to use real meat chunks and vegetables to replace traditional instant noodle seasonings. In addition, Jinmailang's two new flavors—Xiangguo Beef Noodles and Tanmian Songrong Jin—and Baixiang's new Dagu Noodles all reflect the shift in focus for instant noodle companies.

Although the domestic instant noodle market is currently slowing, according to Nielsen data, the Chinese consumer confidence index remains at a historically high 111 points, indicating that the domestic instant noodle market still has opportunities.

In this context, besides innovating and upgrading products based on Chinese consumer demands, for instant noodle companies, product marketing and deep mining of market segments remain important factors for development.

In this regard, Fan Yijin, Vice President of Nielsen China, told *Global Entrepreneur*: "In the future, reasonable product portfolio combinations, promotional mix, and retail category management will become hot spots for improving sales efficiency in large stores. Small-format channels and e-commerce opportunities also need to be fully explored." He believes that with the return of some migrant workers bringing category expansion opportunities, rural markets have growth potential. In addition, domestic high-end instant noodle products are growing well, and manufacturers should develop them and seize opportunities for product upgrades toward convenience, leisure, and health.

Source: *Global Entrepreneur*

--------------------------------------------


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671