---
title: "The Noodle Arena: Winds of Change Blow Again"
description: "Chen Keming, founder of Kemen Food, has become an internet sensation on Douyin, attracting 200,000 followers in less than 10 days. As the noodle industry faces a plateau, major players like Kemen, Xiangnian, and Jinshahe are diversifying into convenient foods and healthy staples to build a second growth curve."
author: "陈晓京"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2023-07-22"
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---

# The Noodle Arena: Winds of Change Blow Again

> Chen Keming, founder of Kemen Food, has become an internet sensation on Douyin, attracting 200,000 followers in less than 10 days. As the noodle industry faces a plateau, major players like Kemen, Xiangnian, and Jinshahe are diversifying into convenient foods and healthy staples to build a second growth curve.

Chen Xiaojing: "I am Chen Keming, the one who makes noodles. I started making noodles at 32 and listed on the Shenzhen stock exchange at 60... I could have enjoyed my retirement, but I am not one to sit idle. Although I am 72 this year, I feel like 27 inside. Like the young, I still have dreams—to build another listed company in my lifetime..." Last week, Chen Keming, founder of Kemen Food, joined Douyin, embarking on a path to internet fame. In less than 10 days, he posted three videos, gaining 200,000 followers and over 600,000 likes. The listed company Chen Keming aims for could be the instant noodle business Wugudaochang, or his new venture, Nuoqian Sugar-Control Rice—consumption upgrading is not only happening in the noodle industry; staple foods also hold great potential. Henan noodle king Xiangnian Food is leveraging its IPO fundraising to expand into fresh-cooked noodles and instant noodle skins; China's largest noodle producer, Jinshahe, is also actively investing in meal replacement foods. After years of silence, the noodle industry, following the counter-cycle since 2021, is finally seeing a wave of expansion. After all, the noodle market is approaching a stock era, with limited room for internal growth through product and channel innovation. Can convenient foods and healthy staples help them build a second curve?

**A Rocky Road**
The history of Chinese people eating noodles may not be much shorter than the formation of civilization. However, the noodle industry truly took shape only in recent decades. In Shanxia Village, Shahe City, Xingtai, Hebei, an ordinary village on the vast North China Plain, the only sideline in the 1970s was making noodles. In this village, a young man named Wei Haijin began pushing a wheelbarrow to sell noodles door-to-door at age 11. At 17, he scraped together money to buy the production team's noodle machine and started a noodle workshop. In 1985, Wei Haijin partnered to open a noodle factory. Ten years later, his partners switched careers, but he persisted, establishing Shanxia Jinshahe Flour Industry in 1996. Since then, Jinshahe noodles have gone beyond Shanxia Village to the national market; Wei Haijin's business also expanded from noodles to wheat cultivation and processing. In contrast, Chen Keming of Hunan had a more tortuous entry into the noodle industry. At 17, he learned carpentry, and a decade later, he became a renowned carpenter around his hometown in Nanxian, Hunan. In 1983, a mistake cost him two fingers in a planer accident. He had to give up carpentry, scavenging and setting up street stalls, feeling lost. One day at a street noodle shop, Chen Keming noticed that noodles from other regions sold well at high prices, while local Nanxian noodles were ignored due to poor quality. Seeing an opportunity, he bought a hand-cranked noodle machine and started making noodles. From an outsider to a famous "noodle fanatic," he continuously learned from masters, solving various noodle-making problems, and Kemen noodles gradually spread from Nanxian to the whole country. Wei Haijin and Chen Keming are grassroots "noodle kings," while Sun Jungeng's entry into the noodle industry represents intellectuals going down to the grassroots. In 1998, 27-year-old Sun Jungeng invested 2,000 yuan to contract a failing noodle factory under the Grain Bureau, starting his entrepreneurial journey. He graduated in 1993 from Henan Institute of Science and Technology with a degree in food processing, worked at the Nanyang Grain Technical School's practice factory, and became its director two years later. Around 2000, with creative products like "Fulu Shouxi Noodles" and "Millennium Noodles," Sun Jungeng brought ordinary noodles into the gift market, standing out in Henan's competitive noodle market and founding his own brand, Xiangnian Food. Over 20 years later, Sun Jungeng's Xiangnian Food has become Henan's top noodle producer, planning for years to list on the Shanghai Stock Exchange's main board. As early as 2012, Kemen Food listed on the Shenzhen Stock Exchange, becoming the "first noodle stock" on A-shares, and the Chen Keming family frequently appeared on Hunan's rich list. The most low-key is Jinshahe. As the industry giant with the highest noodle sales and top three flour processing, the company sold 5 billion yuan in noodles last year, with group revenue near 12 billion yuan, yet it has been quietly making money, rarely mentioning IPO plans.

**Peak and Fall**
Before the rise of Jinshahe, Kemen Food, and Xiangnian Food, China's noodle industry was still in its infancy. These agricultural by-products, not yet integrated into the industrial system, were often scattered across regions in state-owned factories and small workshops. Many born in the 80s and 90s remember vendors pulling carts to sell noodles in childhood. The current noodle kings—Wei Haijin, Chen Keming, and Sun Jungeng—all had such experiences. Later, Arawana entered the Chinese market, some local state-owned noodle factories grew and stood out, and COFCO restructured a number of regional grain and oil brands. After decades of development, China's noodle market has gradually formed a structure dominated by private giants, supplemented by state-owned and foreign giants. By 2021 output, Jinshahe, Kemen Food, and Xiangnian Food ranked as the top three in China. In market share rankings, Kemen Food surpasses Jinshahe, mainly because the latter exports a large portion of its products. Following them are COFCO Grain and Oil and Arawana. However, for these two giants, noodles are not the core business, so their performance is not outstanding. Then come smaller giants like Boda Noodles, Jinmailang, Yuxiang Food, Jinjian Noodle Products, and Hebei Yongsheng. Boda Noodles started in Zhengzhou, Henan in 2001; many only know Jinmailang for instant noodles and boiled water, but its noodle business is also substantial; similarly, Baixiang has recently been laying out noodle products; Yuxiang Food and Jinjian Noodle Products are both Hunan state-owned enterprises, with the latter being a subsidiary of listed company Jinjian Rice Industry; Hebei Yongsheng was founded in 2000, named after founder Wu Yongsheng, and has climbed step by step. Among the top ten noodle enterprises, besides COFCO and Arawana, three are from Hebei and two from Henan. Both Henan and Hebei are major wheat-producing areas, giving them natural raw material advantages. Most notably, Hunan, though not a major flour province, has produced three leading noodle companies, including the top giant Kemen Noodles. However, after the special market conditions of 2020, the overall performance of noodle companies plummeted. In 2021, Kemen Food's revenue continued to grow, but operating profit fell by 90%; in 2022, it recovered somewhat, with revenue of 5.02 billion yuan and net profit of 155 million yuan, but far from previous levels; the latest earnings forecast shows that in the first half of 2023, the company's net profit attributable to shareholders is 9-13.5 million yuan, down 84.44%-76.66% year-on-year. Xiangnian Food is similar: in 2021, revenue was 2.223 billion yuan, up over 14%, but net profit was 112 million yuan, down nearly 40%; since then, it has been mired in performance difficulties—Xiangnian's IPO attempts have repeatedly failed, not only due to the traditional industry but also directly related to recent performance. Jinjian's noodle products company had revenue of less than 300 million yuan last year, with an operating loss of nearly 6 million yuan. The counter-cycle in the noodle industry has lasted over two years; although the decline has moderated, it has not yet emerged from the downturn.

**Squeeze Growth**
The current noodle industry is in a period of plateau. The primary manifestation is that total volume is no longer increasing. Data from the CIFST Noodle Products Branch shows that after China's total noodle output peaked at 8.88 million tons in 2020, it dropped 20% to 7.11 million tons in 2021, with an estimated 8 million tons in 2022—still below 2018 levels. Among them, the core 24 noodle enterprises produced 4.1992 million tons, a slight decrease, with sales slightly increasing to 19.221 billion yuan. China has basically passed the period of growth in per capita staple food intake; in the current environment, overall demand for noodles lacks momentum. Moreover, for the noodle category, potential substitutes are numerous. Within the noodle industry, convenient products are particularly replacing traditional noodles. Young people prefer a 10- or 20-yuan luosifen or Lashuo over plain noodles. Outside the noodle industry, various convenient foods and innovative staples are quickly diverting users. Even the rise of food delivery has impacted noodles, which have long been marketed for simple cooking. This mirrors the difficulties faced by the instant noodle market in previous years. With shrinking total volume and intensifying competition, the traditional noodle market has entered a stock era. Leading companies, leveraging advantages in capacity, capital, brand, and channels, are seeing the Matthew effect strengthen, and market concentration has increased: CR5 was just over 30% in 2011, rising to over 40% by 2021. Data shows that in 2009, there were about 4,000 noodle enterprises in China; by 2020, this had sharply declined to around 300, with many failing to survive until the 2020 boom. Even within the leading camp, squeeze growth among mainstream noodle brands is intensifying. Previously, the market was relatively balanced, with regional giants able to profit easily by focusing on local business. But with the rise of new channels like e-commerce, giants have engaged in price wars, escalating internal competition. Additionally, rising raw material costs due to international factors have triggered a major decline in profitability. The national wheat purchase price index, stable for seven years, began rising at the end of 2020, peaking at nearly 40% higher, only easing in the first quarter of this year. However, after El Niño, grain prices are likely to continue rising. In 2020, Kemen Food's overall gross margin was 22.56%, falling to 15.63% and 15.60% in 2021-2022. Xiangnian Food is similar, even entering an awkward situation where further cuts are impossible. Jinjian Rice Industry's grain and oil business has a gross margin of less than 5%. Jinshahe founder Wei Haijin once said publicly that a pack of noodles yields only a few cents of profit.

**Seeking Ways Up and Down**
Constrained by the macro environment, the issue of total noodle consumption is temporarily unsolvable. The entire industry can only focus on improving profitability. There is a hot topic online: Why are Jinshahe noodles so cheap? On JD.com, Jinshahe's best-selling noodles, the original silver thread family pack, 2700g, sells for only 22.95 yuan. This price advantage is hard for other leading brands to match. This is mainly because Jinshahe controls raw materials through strong layout in wheat cultivation and flour processing, gaining a cost advantage in noodle production. Therefore, in recent years, Xiangnian Food has also been enhancing its flour processing capacity based on the wheat advantages of Nanyang, Henan. In 2020, the company added two flour production lines, and by the end of 2021, wheat processing capacity was 1,825 tons per day. However, this is still incomparable to Wudeli's 80,000 tons, Arawana's 31,700 tons, and Jinshahe's 20,000 tons. Besides seeking upward, noodle giants are also expanding downstream. Beyond traditional noodles, leading brands are incubating innovative products internally, such as Kemen Food's combined seasoning pack noodles like "Sour and Spicy Golden Soup Beef Noodles" and "Diced Chicken with Chili Sauce Noodles," "Rye and Buckwheat Noodles" for health- and weight-conscious consumers, and the Madagascar co-branded "Colorful Vegetable Crushed Noodles" for children; Xiangnian Food also has corresponding light-cooking series, such as Henan braised noodles and Chongqing small noodles. Noodles are evolving from simple, cheap, low-end products to mid-to-high-end products that combine nutrition, health, taste, and convenience. At the same time, they are all stepping out of the noodle comfort zone and moving toward a broader food ecosystem. Kemen acquired Wugudaochang, revitalizing it with listed company resources, and changed its stock short name from "Kemen Noodles" to "Kemen Food," reflecting this determination. At a research event in May 2023, Kemen Food stated that its future business focus remains noodles and convenient foods; the Wugudaochang brand holds a similar position to noodles and will become a new profit growth point. Xiangnian Food, based on its main businesses of noodles and flour, plans to use IPO funds to venture into fresh-cooked noodles and instant noodle skins, becoming a strong competitor to Akua Foods. Jinshahe is making a bigger leap, leveraging its raw material advantages to enter the meal replacement market, launching deep-processed products like wheat germ powder and germ flakes. The reason for these moves is simply to improve profitability while pursuing growth. After all, even ordinary instant noodles have profitability that noodles cannot match, let alone convenient foods and meal replacements. Indeed, the imagination space for traditional noodles is limited. Just like the upgrades from reconstituted milk to fresh milk, from industrial beer to craft beer, and from instant milk tea to freshly made milk tea and various innovative products, the noodle market is the same. Some have even jumped outside the food sector, such as Kemen Food's tentative pig farming business and the new brand Nuoqian Sugar-Control Rice brought by Chen Keming's Douyin presence. If the next listed company Chen Keming aims for is not Wugudaochang, it will be this health food that follows health trends and integrates new retail and new channels. We are happy to see the rise of new brands and are inspired by the old generation of entrepreneurs' continued ambition. As long as new stories keep emerging, the noodle market will see winds of change blow again.


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