The Paper's reporter Wang Qiwen
Asian instant noodle companies are going to collectively raise prices?
According to South Korean media reports, the Korean instant noodle brand Nongshim will increase prices from September 15. In mid-August, Thai instant noodle manufacturers, which have not increased prices for 14 years, have also asked for price increases, saying that the cost is high, and some products are already operating at a loss.
Even in the first half of the year, Nissin Foods and Master Kong Holdings, whose prices have risen, still can't escape the decline in gross profit margins in their interim results, and the food sector of Unified Enterprise China continues to lose money.
Multinational instant noodle companies have demanded price increases
According to South Korea's Chosun Ilbo reported on September 1, Nongshim announced that starting September 15, the ex-factory prices of instant noodles and major snack products will be raised by an average of 11.3% and 5.7%.
According to the aforementioned report, this is the second time that Nongshim has raised the price of instant noodles in August last year and the price of snacks in March this year. According to the Chosun Ilbo, in addition to Nongshim, there are 26 instant noodle brands and 23 fast food brands that will raise prices after the Mid-Autumn Festival.
According to the news of South Korea Radio International on August 24, from the price increase of Nongshim's main products, Xinla noodles rose by 10.9%, Small Raccoon Instant Noodles rose by 9.9%, and shrimp noodles rose by 6.7%.
In the case of hypermarkets, the average price of Shinra noodles per pack rose from 736 won (about 3.73 yuan) to 820 won (about 4.16 yuan), and the price of shrimp sticks per pack rose from 1100 won (about 5.57 yuan) to 1180 won (about 5.98 yuan).
On August 25, 2022, local time, in Bangkok, Thailand, piles of instant noodles were sold in shops, and these instant noodles came from all over Asia and had a wide variety. Visual China figure
Not only Korean instant noodles have to increase prices, but in mid-August, several major thai instant noodle manufacturers hoped that the government would allow them to increase prices.
According to the British "Guardian" reported on August 17, this year's natural disasters have led to a sharp rise in the cost of raw materials, energy and transportation in Thailand, the Thai government has imposed price controls on some daily necessities, and the prices of basic daily necessities such as eggs, cooking oil and noodles have been set to a ceiling to reduce the pressure on consumers' lives. But Wai Wai and five other major Thai instant noodle brands have jointly sent a letter to the Thai government asking for the price of instant noodles to be raised from 6 baht (about 1.13 yuan) to 8 baht (about 1.5 yuan).
Producers of Wai Wai instant noodles say that now that costs are high and some products are already operating at a loss, unless the government allows price increases, it will reduce supply and shift sales to overseas markets.
The Thai government said it would consider requests from instant noodle manufacturers. However, Thailand's Minister of Commerce, Lhasa Navisi, said that the 8-baht price required by manufacturers is too high, which will bring pressure to ordinary consumers.
It is reported that the last time the Thai Ministry of Commerce allowed the price of instant noodles to be raised was in 2008, when instant noodle manufacturers applied for 2 years before they were approved.
Coincidentally, the "originator" of instant noodles, Nissin Foods (01475. HK) announced on January 5 this year that in the face of cost pressure caused by unstable supply of raw materials and soaring prices, the ex-factory price of major instant noodles in Chinese mainland will be raised, with an average increase of percentage in the number of units, effective March 1, 2022.
According to the announcement, the products involved in price adjustment include acacia cup noodles, a pre-dice (packaging, cup and bowl noodles), Nissin pasta, etc. It is reported that the last time Nissin Foods adjusted the price of instant noodle products Chinese mainland was in 2011.
Sales continued to grow despite price increases
At noon on August 30, Nissin Foods (01475. HK) disclosed its 2022 interim results. Despite nissin Foods' price increases for major products in the Chinese mainland market in the first half of the year, the Chinese mainland business "continued to achieve good results", and sales of signature products continued to grow positively year-on-year (compared with the same period last year).
In the first half of this year, Nissin Food revenue increased by 9.7% year-on-year to HK$2.033 billion, but profitability weakened. During the reporting period, Nissin Foods' gross margin fell by 0.5 percentage points to 31.4%. The financial report pointed out that due to the sharp increase in the price of key raw materials such as wheat and palm oil year-on-year, and the high production costs during the epidemic in Hong Kong, the gross profit margin was reduced. Net profit attributable to shareholders of listed companies fell by 3.5% year-on-year to HK$165 million.
The two major instant noodle giants in the domestic market, Master Kong Holdings (00322. HK) and Unified Enterprise China (00220.HK) face the same challenges.
According to public reports, some supermarket chains received a notice of price adjustment from Master Kong's classic series at the end of January, with an increase of about 10%-15%. The suggested retail price of Master Kong's "Classic Bag Noodle Series" rose from 2.5 yuan / bag to 2.8 yuan / bag, while the barrel noodles rose from 4 yuan / barrel to 4.5 yuan / barrel. According to the research report released by Guotai Junan on August 26, Master Kong Holdings once again raised the ex-factory price of large food barrels and large food bag products in July.
On the evening of August 22, Master Kong Holdings disclosed its interim results for 2022, of which the revenue of the instant noodle sector was 13.548 billion yuan, an increase of 6.49% year-on-year, accounting for 35.45% of the group's total revenue. Master Kong Holdings said that due to the rise in raw material prices during the period, the gross profit margin of instant noodles fell by 3.26% to 20.63% year-on-year, which in turn led to a year-on-year decline in the net profit of the instant noodles sector in the first half of the year by 39.23% to 544 million yuan.
Master Kong's main competitor, Unified Enterprise China, has continued to lose money in the instant noodle business in the first half of the year. In the first half of this year, the revenue of the unified food business was 5.369 billion yuan, an increase of 14% year-on-year; However, the sector lost 158 million yuan in the first half of the year, compared with a loss of 70.48 million yuan in the same period last year, and the loss was further expanded.
In the first quarter of this year, the Internet also circulated a notice of price increases for unified instant noodles. The notice said that the retail price of barrel noodles rose from 4 yuan / barrel to 4.5 yuan / barrel, an increase of about 12.5%; The retail price of the bag noodles was originally 2.5 yuan / bag, and the price was adjusted to 2.8 yuan, which is the same as the retail price of Master Kong's "Classic Bag Noodle Series". The retail price of "five-in-one" has risen from 12.5 yuan / group to 14 yuan / group. But the relevant person in charge of the unification enterprise China denied the rumor at the time.
The price increase may be related to the continuous rise in the price of major raw materials and the rising cost of packaging materials and transportation.
The performance demonstration materials disclosed by Master Kong in the first half of 2022 show that the price of palm oil, the main raw material for instant noodles, has continued to rise since the first half of 2019, reaching 2.66 times that of 2019 in the first half of 2022, an increase of 51% over the first half of 2021, the price of flour has increased by 17% year-on-year, and the price of white sugar has increased by 9.8% year-on-year.
Source of price changes in the main raw materials of instant noodles: Master Kong Holdings performance demonstration materials for the first half of 2022
From 2021 onwards, unification will attribute the decline in profitability to the rise in the price of bulk raw materials, and this year, in addition to the increase in raw material prices, two major reasons have been added: international oil prices and the increase in transportation costs affected by the epidemic.
Domestic noodle enterprise Keming Food (002661. SZ) also threw out price adjustment letters one after another, pointing directly to the pressure of raw material costs, packaging materials, transportation and so on.
On the evening of July 14, Keming Food announced that due to the excessive increase in wheat prices and the rise in operating costs, the sales price of various series of products will be raised from July 16, 2022, with an average increase of about 5%. Keming Foods just implemented a new price policy on December 1, 2021. On November 13, 2021, Keming Food announced that in view of the continuous rise in the cost of flour, packaging materials, transportation and other costs, the price of the company's various series of products was raised.
The impact of overseas markets may be more obvious. The Chosun Ilbo reported that the soaring import prices of raw materials, coupled with fierce competition among enterprises, made it difficult for instant noodle companies to obtain high profits in the South Korean domestic market.
Nongshim, a South Korean instant noodle company, also said that the international dispute and inflation that began in April this year led to a sharp rise in raw material prices, and the supply prices of domestic cooperative companies in South Korea also rose in the second quarter of this year, and production costs rose.
Responsible editor: Yes Dong Dong Photo editor: Jiang Lidong
Proofreader: Ding Xiao