Scan the QR code in the image to register Post-90s Xiao Lin still remembers her student days saved by instant noodles. During college, she often stocked up on a few boxes of instant noodles in her dorm, usually pickled cabbage flavor, priced under five yuan. When hungry at midnight or tired from studying, she would boil water and make a bowl of noodles. "A bowl of instant noodles down, and I felt the fatigue of the day melt away." After graduation, Xiao Lin rarely ate instant noodles, but recently, while shopping at the mall, she suddenly noticed that the previously one or two yuan bagged noodles and bucket noodles under five yuan had all been upgraded, and prices had risen accordingly. This is not an illusion. Now, many bucket noodles on supermarket shelves cost nearly ten yuan each, and not only that, there are also instant noodles priced over twenty yuan on the shelves. For a long time, instant noodles have played the role of being convenient, filling, but unhealthy. However, among fast foods that are quick and tasty, instant noodles have an absolute advantage and are hard to replace. The World Instant Noodles Association has reported that global instant noodle consumption is increasing, with 116.56 billion servings consumed in 2020, a year-on-year increase of 9.53%. But times have changed; in the fast food category, new competitors like luosifen, self-heating pots, and pre-made dishes have emerged. They have unique flavors, high-end positioning, and understand young people better. These new categories have not only appeared on the dining table but also aim to push instant noodles aside and dominate the table. To reclaim their position, some brands have chosen to increase quantity and price. It's visible that many instant noodles now cost as much as ten yuan, and some brands have created new high-end product lines, such as Uni-President's Manhan Feast, which sells for 20 yuan per pack. In the track, new brands like Lamian Talk and Yuan Niangniang have also emerged, targeting contemporary young people and trying to turn instant noodles into high-end healthy products. Can the upgrade of instant noodles succeed? How about a bucket of instant noodles for 30 yuan? Shenran found from the Tmall official flagship stores of major instant noodle brands that traditional brands are striving to say goodbye to the 5-yuan era. Take Master Kong, for example. Its Suda Noodle House boiled noodles sell for 66 yuan for 4 boxes, and Suda Noodle House large meat chunk noodles sell for 113.9 yuan for 6 boxes, meaning each box costs over 15 yuan. In addition, Uni-President's Tang Daren Extreme Flavor Gold Soup Beef Noodles sell for 80 yuan for 4 boxes. Especially Uni-President's Manhan Feast instant noodles, with a palace-style appearance, a lid on the bowl, and foldable chopsticks replacing plastic forks, priced at 179 yuan for 6 bowls, which translates to about 30 yuan per bowl. These high-priced instant noodles not only focus on appearance but also try to improve raw materials. For example, expensive noodles include real meat chunks, and companies use techniques like concentration and freeze-drying to retain nutritious broth and vegetables, and packaging has become more luxurious. Why have instant noodles suddenly become expensive? In fact, for a long time, instant noodle companies had a hard time because consumers were ordering takeout. Since 2015, takeout platforms rose, and internet companies heavily subsidized users, making a takeout order cost only about ten yuan after subsidies. The consumer base for instant noodles and takeout platforms overlaps greatly, mainly young people and white-collar workers. Consumers found that instead of eating unhealthy instant noodles, they could just order takeout with one click. In 2016, instant noodle sales hit a low, selling only 38.52 billion servings that year, the lowest in five years. (Comparison of prices between takeout and various brand instant noodles) Moreover, as people's pockets got fuller, they wanted to eat well and be full. In earlier years, the main consumption scenario for instant noodles was long-distance travel, and the demand was simple: convenience, filling, and price preferably under 5 yuan. But now, with the popularity of high-speed rail and airplanes, travel time has shortened, and the convenience of instant noodles has become less attractive. To save the precarious business, the instant noodle market had to change. At the end of 2018, Master Kong launched the high-end product line Express Suda Noodle House, priced above 20 yuan; in 2020, Uni-President launched the upgraded version of Tang Daren, "Extreme Flavor Hall," targeting mid-to-high-end consumers, while Uni-President's "Manhan Feast" series is more expensive. Selling at higher prices has, to some extent, saved the instant noodle market. Take Master Kong as an example: financial reports show that its 2020 revenue was 67.618 billion yuan, a year-on-year increase of 9.10%. A large part of this growth was driven by high-priced bagged noodles. High-priced bagged noodles generated 13.066 billion yuan in revenue in 2020, a year-on-year increase of 28.12%, much faster than mid-priced bagged noodles. Is the upgrade of instant noodles a false proposition? "Price increases" seem not unusual in the overall consumption environment. Looking at the entire consumer brand track in 2021, "selling expensive" has almost become the core theme. In Wuhan, people queue for hours outside new Chayan Yuese stores to buy a cup of milk tea priced at over 20 yuan, and due to the popularity, scalpers have marked up a cup to 300-500 yuan. In April this year, Zhong Xuegao released two new products priced at 68 yuan and 88 yuan each, but that didn't stop consumers from waiting to grab them. Even after official channels sold out, e-commerce platforms saw scalper prices as high as 200 yuan per box (i.e., one stick). More and more new consumer products are appearing; they were once traditional, with no story, and gradually abandoned by the times and young people, such as potato chips, baijiu, and Chinese pastries... Investors and entrepreneurs picked up these categories, repackaged and upgraded them, and gave them high-sounding concepts like "zero sugar, zero fat" and "healthy nourishment." These new consumer products have exquisite packaging and sell at higher prices, but they still firmly capture the taste buds of young people. So, is it possible for instant noodles to upgrade and become as expensive as Heytea? In the view of Zhu Danpeng, an analyst in the Chinese food industry, "As consumption continues to upgrade, consumers' demands for instant noodles are also increasing, and young people's price sensitivity to instant noodles has decreased. It is entirely possible for instant noodles to sell at high prices, even up to 50 yuan." From another perspective, although the current instant noodle market has moved away from the 5-yuan era, and some brands have launched 30-yuan bowls, they are still low-priced. Data from the World Instant Noodles Association shows that although China is the world's largest consumer of instant noodles, the average price of instant noodles in Japan and South Korea is about 13 times and 2.5 times that of China, respectively. Globally, Chinese instant noodles are considered cheap. Seeing this market opportunity, some emerging instant noodle brands have begun to rise. Lamian Talk, founded in 2016, is positioned as high-end, with three-pack prices ranging from 43.9 yuan to 57.9 yuan, varying slightly by flavor. Another example is the instant noodle brand Yuan Niangniang, which received investment from Qingsong Fund last year. The sudden outbreak of the pandemic accelerated the rise of new fast-food brands. Yuan Niangniang focuses on fire chicken noodles, emphasizes its national trend attributes, targets young people, and tries to take a high-end route. What kind of instant noodles do consumers want? When it comes to high-priced instant noodles, many consumers say they are willing to try, but they have higher requirements for taste and ingredients. Post-90s A Nan pointed out: "If it's going to be expensive, it not only needs to have meat but also a unique taste. Isn't eating instant noodles about the taste? If the taste is bad, why would I buy it?" Zhu Danpeng pointed out that consumers now have new requirements for ingredients and taste, and the instant noodle industry must also change. For example, ensuring food safety, high-end and functional ingredients, creating a high-end brand tone, and scene innovation. In terms of ingredient safety and high-end, there is still much room for improvement in China. For example, Japan's Nissin Ramen has launched many instant ramen products whose noodle freshness is comparable to handmade noodles, and they have also introduced instant noodles made from rice, buckwheat, and other ingredients, which are healthy, safe, and nutritious. "But it's not about using expensive ingredients or high prices that make high-end instant noodles; the key is to create a new scene to match high-end consumers. After all, high-end instant noodles target different consumption scenarios and people than ordinary ones. The problem now is that there is no new scene to match high-end consumers; this is a systematic project," Zhu Danpeng said. Under the education of high-end new-style tea drinks, drinking milk tea has become a self-pleasing lifestyle, but currently, eating instant noodles is still a helpless choice for workers to fill their stomachs. The biggest hurdle for upgrading instant noodles is actually the perception issue. For a long time, instant noodles have been equated with junk food. Although Yao Zhongliang, chairman of Baixiang Food, has patiently explained, "Among convenience foods, it is more nutritious than biscuits and cakes, with a more reasonable dietary structure, and it is the best in terms of fat, protein, and vitamins among current convenience foods," consumers seem unconvinced. Traditional instant noodles have sold the same formula for 60 years since their inception, and the production process leads to high sodium, carbohydrates, and calories. This runs counter to young people's pursuit of healthy, nutritious diets. From an industry perspective, the market concentration of instant noodles is very high. Data shows that the top player, Master Kong, holds 47% of the market share (by sales), the second, Uni-President, holds 21%, and the third, Jinmailang, holds 11%. The top three companies already control 80% of the entire market. High market concentration means it's difficult to innovate and break through. These giants control the entire upstream and downstream industry chain, squeezing profit margins, making it hard for small and medium brands to survive. Whether they can create high-end instant noodles with unique flavors that appeal to young people and innovate in an already mature market remains a question for the instant noodle industry. Will instant noodles and self-heating pots inevitably clash? The more thorny issue is that once instant noodle prices rise, more categories compete for the market. Post-90s girl Lisa pointed out that the most she can accept for instant noodles is no more than 20 yuan, at least not exceeding the price of a takeout meal. "If instant noodles are too expensive, ordering takeout is more cost-effective." More people set their upper limit at 10 yuan. After all, there are very cheap alternatives to instant noodles, such as the popular luosifen brand Haohuanluo, which sells 5 bags for 60 yuan, equivalent to 12 yuan per bag. "Isn't luosifen at around ten yuan good? And if you want convenience, self-heating rice and hotpot are also convenient, priced at just over 20 yuan. Instant noodles really have no competitiveness." Post-90s Xiao Cheng admitted. In fact, due to the pandemic, both dining out and takeout temporarily disappeared, forcing people to choose convenience foods. A large number of new fast-food brands with unique flavors and rich ingredients also became popular. For example, as early as 2017, hotpot brands like Haidilao and Xiaolongkan launched self-heating hotpot. But during the pandemic, self-heating small hotpots became highly sought after by young people. Fast-food brands like Mo Xiaoxian, Shizuren, and Zihaiguo quickly became well-known "internet-famous products" among young people. Zihaiguo's extended product, self-heating rice, also became popular, and new categories like luosifen and sour and spicy noodles began to sell well, and pre-made dishes that can be eaten after heating also appeared on young people's tables. Especially luosifen, which has become the top trend in the convenience food sector in recent years. CBNData consumption data shows that in online convenience food consumption categories, luosifen has become the second largest sub-category after instant noodles, with a growth rate of over 25 times. Luosifen, self-heating pots, and other new fast-food categories are seen by many investors as substitutes for high-end instant noodles. These young "upgraded instant noodles" have not been around long, but they understand young people well, know what they want and what they want to eat, and their strategies are flexible enough to sell at higher prices. In the future, they even want to seize the instant noodle market. But for now, instant noodles are still the best-selling among all convenience foods, as they can be used in a wide range of scenarios and have high consumption frequency. This means the pond is wide enough for all kinds of fish to survive, giving opportunities to some niche categories. "With the popularity of lazy culture and home culture, especially as Generation Z young people become the main consumers, they will bring new consumption patterns and thinking. These post-90s and post-00s consumers will force the entire market to upgrade and transform," Zhu Danpeng said. "We remain optimistic about this track in the long term." Source: Shenran (ID: shenrancaijing) -END-