---
title: "Uni-President Rebounds: Are People Falling for Instant Noodles Again?"
description: "Since last year, the instant noodle market has seen a slight recovery, and according to Uni-President's latest data, spring seems to be coming. But early spring is prone to 'cold snaps'; for companies, understanding consumer preferences is the only protective clothing."
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published: "2019-03-24"
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# Uni-President Rebounds: Are People Falling for Instant Noodles Again?

> Since last year, the instant noodle market has seen a slight recovery, and according to Uni-President's latest data, spring seems to be coming. But early spring is prone to 'cold snaps'; for companies, understanding consumer preferences is the only protective clothing.

Since last year, the instant noodle market has seen a slight recovery, and according to Uni-President's latest data, spring seems to be coming. But early spring is prone to 'cold snaps'; for companies, understanding consumer preferences is the only protective clothing.

Text: Qi Minqian
Source: Shijie (ID: ishijie2018)

If one were to write a biography for the divine food that is instant noodles, 2014 would surely be the most significant chapter. That year, instant noodles began to be spurned by Chinese consumers, with total demand falling by 1.82 billion servings. Master Kong and Uni-President, the 'twin noodle giants' from Taiwan, bore the brunt, and for the following three years, their performance slid continuously.

After years of hardship, the instant noodle market transformed from a free-for-all to a winner-takes-all scenario. The noodle magnates, having fought through the smoke of market competition, seem to have welcomed spring again.

01
**Instant Noodles Warming Up**

Uni-President China (hereinafter 'Uni-President') latest annual report shows that in 2018, the company achieved revenue of 21.77 billion yuan, up 4.6% from 2017, with after-tax profit increasing by 17.2%.

During the reporting period, instant noodle business revenue rose 5.7%, and beverage business revenue rose 3.6%, reaching 8.425 billion yuan and 12.619 billion yuan respectively, accounting for 38.7% and 58.0% of the group's total revenue.

Uni-President's two star products are Laotan Sauerkraut Beef Noodles and Tang Daren. The mid-to-high-end brand Tang Daren has become the growth engine for its instant noodle business.

**In contrast to Master Kong's channel sinking, Uni-President has been focusing on the mid-to-high-end market for years, building a moat for itself during the industry downturn.**

Tang Daren, positioned in the mid-to-high-end market, is another strong player after Laotan Sauerkraut. From 2014 to 2015, Tang Daren achieved growth rates exceeding 100% for two consecutive years, with sales surpassing 500 million yuan. In 2018, Tang Daren continued to achieve double-digit growth.

Uni-President's instant noodles regained momentum not only because high-end products like Tang Daren improved profitability, but also because after years of fierce competition, the domestic instant noodle market has stabilized, with few new entrants daring to disrupt, and the market share of leaders like Master Kong, Uni-President, and Baixiang has continued to solidify.

**In the peaceful environment after the war, price wars among major instant noodle companies disappeared, expense ratios decreased, and profit margins improved.**

Uni-President paid a heavy price to break out. From 2013 to 2018, Uni-President's selling expenses decreased by 1.7 billion yuan, financial expenses by 400 million yuan, and staff numbers were reduced by nearly 10,000.

02
**The Business Empire of a Poor Boy**

You must have eaten Uni-President instant noodles, but you may not know the hardcore background of the founder of that bucket of noodles.

When it comes to Gao Qingyuan and the Uni-President Group he founded, everyone in Taiwan knows them.

At age 13, his father passed away, and Gao Qingyuan depended on his mother. To supplement the family income, he left his hometown and became a child laborer in Tainan City. After several twists and turns, he arrived at Xinhexing Cloth Store, whose owner was Wu Xiuqi, who later founded Tainan Spinning. Here, Gao Qingyuan's life took a turning point.

Wu Xiuqi appreciated Gao Qingyuan greatly, treating him not only as an employee but also as a younger brother. Under his promotion, Gao Qingyuan, who started as a child laborer, learned the ways of business management and became the first business section chief of Tainan Spinning. 'Without Wu Xiuqi, there would be no me!' Gao Qingyuan's words were resolute.

In 1967, Taiwan had just allowed private enterprises to enter industries such as flour and feed. Gao Qingyuan seized the opportunity, left Tainan Spinning, and founded Uni-President, entering the flour and feed industries. To thank Wu Xiuqi for his patronage, he insisted that Wu Xiuqi serve as chairman of Uni-President.

**During the entrepreneurial process, Taiwan's economy developed rapidly, and the pace of people's lives accelerated. Gao Qingyuan took the opportunity to introduce instant noodle culture to Taiwan. Instant noodles became an instant hit, and Uni-President became the leader in Taiwan's food industry.**

Afterwards, the importance of sales channels became increasingly evident. Uni-President introduced 7-Eleven and Carrefour to Taiwan, changing Taiwanese habits. To this day, Uni-President's subsidiary, President Chain Store, still operates 7-Eleven stores in Taiwan, Shanghai, and parts of Zhejiang.

In Taiwan, the Uni-President Group owns multiple listed companies, covering almost all walks of life, making it a business empire. But in the mainland market, it has not been able to outdo Master Kong, only managing to be the 'eternal second.'

03
**A Bowl of Laotan Settles the Fate**

A bowl of instant noodles has caused Master Kong and Uni-President, these 'fellow townsmen,' to engage in a secret war for years.

In 1992, Uni-President tried to conquer the stomachs of mainland compatriots with shrimp-flavored noodles favored by Taiwanese, but failed miserably. Almost at the same time, Master Kong also targeted the mainland market, launching the classic braised beef noodles. From then on, university dormitories and train carriages were immersed in the flavor of these noodles, and Master Kong conquered the taste buds of mainland consumers in one fell swoop.

Uni-President was caught off guard by the unfavorable start. Despite later strategic adjustments and increased publicity, the results were minimal. For over a decade after entering the mainland, Uni-President lived in the shadow of Master Kong until the advent of Laotan Sauerkraut Beef Noodles.

In 2008, Uni-President took the lead in launching Laotan Sauerkraut Beef Noodles, inviting popular host Wang Han as spokesperson. Due to its unique taste, it became a major product second only to braised beef noodles. Master Kong, the 'big brother' of instant noodles, followed suit by launching its own Laotan Sauerkraut Beef Noodles and even found Xu Zheng, who bears some resemblance to Wang Han, as spokesperson.

**Such imitation made Uni-President unhappy, leading to the highly sarcastic advertising slogan: 'Someone imitates my face, and also imitates my noodles.'**

The turning point came in 2014.

Due to long-term price competition and industry downturn, both Master Kong and Uni-President's instant noodle businesses experienced significant declines. They suddenly realized that satisfying consumers was more important than competing. At that time, Uni-President's chairman, Luo Zhixian, announced: 'The inflection point for instant noodles has arrived; price competition should shift to value competition.'

04
**Beverage Business Holds Back**

Consumers are truly fickle! Twenty years ago, instant noodles represented sophistication, but in 2014, they suddenly became equated with 'unhealthy.' One moment they hold a 'happy water for the fat and lazy,' and the next they complain that beverages are unhealthy and go to the milk tea shop at the corner to order fresh juice.

Data from the World Instant Noodles Association shows that in 2014, total demand for instant noodles in mainland China and Hong Kong fell by 1.82 billion servings. From 2014 to 2016, the nationwide instant noodle business was in a slump, equivalent to an average daily demand decrease of 7.23 million servings.

**The industry faced a cold winter, and Uni-President was not spared. Since 2014, the company's revenue has declined for three consecutive years.** On the surface, the downturn in the instant noodle market seems to provide a reasonable explanation for Uni-President's poor performance, but upon careful analysis of its financial data and industry comparisons, Shijie found that the blame for the decline in performance seems to lie with the beverage business.

Wind data shows that over the past decade, Uni-President's instant noodle business in the mainland increased from 2.12 billion yuan in revenue to 8.43 billion yuan, expanding fourfold. In contrast, the beverage business expansion was less impressive, with revenue only doubling from 6.93 billion yuan to 12.62 billion yuan over the decade. Ten years ago, the beverage business was more than three times the size of the instant noodle business, but now it is less than twice its size.

Note: Revenue for 2017 was adjusted, so the 2018 growth rate is based on company announcements (unit: 100 million yuan).

Compared to instant noodles, the beverage business has been a drag on Uni-President in recent years. From 2014 to 2016, instant noodle revenue increased slightly by about 300 million yuan, while beverage revenue fell by nearly 2 billion yuan.

Compared with Master Kong's performance, Uni-President's beverage business is even more awkward. From 2009 to 2017, Uni-President's instant noodle revenue growth rate was almost every year higher than Master Kong's; but in the beverage business, Uni-President's growth rate lost to Master Kong.

Uni-President Beverages vs. Master Kong Beverages (unit: 100 million yuan)

**Brand marketing expert Chen Wei believes that Uni-President's beverage products have lacked innovation in the past two years. Although new products are constantly launched, market response has been mediocre, and it has been difficult to see a hit product after Xiao Ming Tong Xue.** Compared with Master Kong, Uni-President's beverage product line is longer and faces greater competitive impact. For example, in the coffee market, there is Nestlé's impact; in milk tea, although Assam milk tea has a high market share, it also faces competition from brands like Suntory and Master Kong.

Master Kong may be the earliest FMCG company to propose channel sinking. As early as the beginning of this century, its channels had developed into every capillary of the country. In small towns and villages, almost everywhere you can buy Master Kong products. In contrast, Uni-President has advantages in East China, South China, and first- and second-tier cities, with higher-end product positioning and fewer mass-market products.

Food industry analyst Zhu Danpeng is not optimistic about the development prospects of Uni-President beverages. He said, 'Now is not the best time to expand channels. Third- and fourth-tier cities are the survival grounds for regional small brands, and when expanding channels, you will encounter more competitors.'

**Uni-President's high-end beverage products have higher premiums, which aligns with the consumption upgrade trend in first- and second-tier cities, but there are also many substitutes.** Taking coffee as an example, not to mention canned coffee from Nestlé and Starbucks, the emerging internet coffee brands will also take a share. Uni-President beverages are still in trial and error, and the road to climbing is long and difficult.

From the 1990s to the present, the two Taiwanese instant noodle giants have almost monopolized the mainland instant noodle market, and they have also fought fiercely in the beverage sector.

Now that the battle in the consumer goods market has settled, and the giants have firmly controlled their respective territories, spring seems to be coming. But early spring is prone to 'cold snaps'; understanding consumer preferences is the only protective clothing.

**-END-**


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