#精品长文创作季#
Adhere to innovation to meet consumption-oriented, strengthen resilient development, and the future prospects of the instant noodle industry are still worth looking forward to.
Author: Hexiang Lin Ziqun
出品：零售商业财经 ID：Retail-Finance
From national cuisine to space food, a bag of instant noodles carries the history of the times.
In the competition for the position of the head enterprises, the listed company Kangtong "Shuangxiong" has shown in the latest financial report data that the gap between the same business strength has been widening, and the business resilience and strategic qualitative nature of the two are judged, while the white elephant and Jinmailang, who have not yet knocked on the door of the capital market, continue to dig gold in the "traffic depression" to make up for the shortcomings of offline channels and market share.
Nowadays, the "marathon" field of convenient fast food has ushered in a new consumption environment, different from the cutting-edge brands that "disappeared overnight", or the old domestic products that have been shocked and left, those who can really go through the industry cycle must have the concept of matching with the consumption trend, the awareness of matching with users, and the rhythm of moving in the direction of the market, which is worthy of in-depth exploration and analysis by industry participants.
01 The bonus disappears, but the increment remains
Instant noodles were popular in the critical period of the rise of the domestic economy in the 90s of the 20th century, when a large number of migrant workers who went out to work had to take the green train for a long time.
From the beginning to 2015, the instant noodle industry has maintained a double-digit growth rate for many years and experienced a golden period of rapid development.
Among them, Master Kong swept the market with its rich flavor of braised beef noodles, with the advantages of convenience, deliciousness and affordable price, as well as the operation strategy of paying equal attention to regional taste and innovation, quality and quantity at the same time, Master Kong firmly ranked the leader in the mainland instant noodle market, with a market share of 98% at its peak.
Uni-Unity, which arrived only 15 days later than Master Kong, also quickly enriched its product line and adjusted its strategy to catch up. In addition, brands such as Hualong (the predecessor of Jinmailang) and White Elephant have also poured into the blue ocean market with great growth potential.
Source: iResearch Consumer Research Institute
In recent years, the traditional 3-minute instant noodles can no longer meet the changing preferences of consumers. The public's demand for food is becoming more and more stringent, and even for so-called convenience foods, consumers are no longer limited to "convenience" itself.
On the one hand, with the increase of national economic income, consumers themselves have begun to pay attention to health and the nutritional value of food, and consumer demand has changed from focusing only on convenience and price to focusing on the nutrition of ingredients and the diversification of varieties.
On the other hand, the choice of convenient fast food is gradually diversified, with the rapid development of the "everything to home" instant food industry, and the emergence of diversified products in an endless stream (such as self-heating hot pot, snail noodles, the popularity of instant cold skin, and the booming prefabricated food market of quick-frozen food), the development concept of traditional instant noodle enterprises "one trick to eat fresh all over the world" no longer works.
Even though the ensuing new opportunities such as "stay-at-home economy" and "live-streaming economy" have injected new vitality into the instant noodle market again, in the face of the exhaustion of market dividends, it is urgent for business strategies to shift from "savage growth" to "intensive cultivation".
According to Deng Min, global partner of Bain & Company and chairman of the consumer goods practice in Greater China, the secret of the success of FMCG companies lies in how to improve production efficiency, seize digital opportunities, and be bold in innovation.
Obviously, if the top players want to stay at the table in the era of stock competition, in addition to promoting the steady growth of sales, more importantly, they must grasp both quantity and price, take into account the interests of consumers, customers, employees and other parties, and prepare for long-term sustainable development.
02 Compete on the same stage, which is stronger and which is weak
Review Master Kong Holdings Limited (00322.HK) According to the 2023 annual performance report of HK, hereinafter referred to as "Master Kong"), Master Kong's annual revenue increased by 2.16% year-on-year to 80.418 billion yuan, maintaining a growth trend for 7 consecutive years. Among them, the business revenue of the instant noodle segment reached 28.793 billion yuan, accounting for 35.80% of the group's total revenue.
Figure: Comparison of Master Kong, Uni-President and Nissin 2023 financial reports
During the same period, Nissin Foods (01475. HK) 2023 annual results show that the group's revenue during the period was HK$3.833 billion, a year-on-year decrease of 5.77%. Unified Central Control (00220.HK) In the company's 2023 performance report, the revenue of the unified instant noodle business in 2023 contributed 9.594 billion yuan, a decrease of 1.026 billion yuan from the previous year's level of 10.62 billion yuan, a year-on-year decrease of 9.65%.
For the revenue answer sheet in the three performance announcements, professionals from all sides have frequent views and opinions.
From the perspective of instant noodle business performance, as the head of the industry, Master Kong's instant noodles will have a revenue of 28.793 billion yuan in 2023, a slight fluctuation from last year, but the overall gross profit has improved. Compared with the other two listed companies, after the epidemic, Master Kong instant noodles stabilized their fundamentals and showed strong business resilience.
On the other hand, non-listed companies such as Jinmailang and Baixiang, although we do not know the specific revenue performance data, the former's star instant noodle products are now difficult to find in the market, and the latter is also facing the same dilemma, and the overall performance of its instant noodle business can also be roughly glimpsed from the visibility of the brand terminal.
In the past few years, the instant noodle industry has set off a frenzied competition for "traffic". From e-commerce platforms to lively social media, all kinds of sensational activities are emerging, as if there is no smoke of gunpowder.
The white elephant with social responsibility and patriotic feelings took advantage of this east wind to leap from the old domestic product to the national fashion brand, and the short-term breakthrough did drive a temporary "wild growth", but it is still difficult for us to find the trace of the white elephant in offline channels.
Source: Taobao
From the price side, as shown in the figure above, the white elephant that focuses on national feelings is actually even more expensive than the price of Kangtong, and its ordinary signboard 5 consecutive package products are priced at 14.9 yuan. The same type of product Jinmailang is 12.9 yuan, and the unified price is 12.79 yuan, while Master Kong is only 10.9 yuan.
Tongyi instant noodles have also made great efforts on the marketing side to stimulate consumption, from the cooperation between Tang Daren and Wang Junkai to maintain the younger image of the brand, to the cooperation between Laotan sauerkraut beef noodles and the hit drama "You Fei", hoping to reach celebrity fans and the new generation of consumers, and the cooperation between Xiaozao and Xiao Zhan with the intention of expanding the consumer group......
However, a series of actions unified on the marketing side did not bring the desired results. In 2023, the overall sales and marketing expenses of the unified will be 6.28 billion yuan, an increase of 390 million yuan from 5.89 billion yuan in 2022, an increase of 6.6% year-on-year, but the specific corresponding instant noodle revenue in 2023 will decrease from 10.62 billion yuan in 2022 to 9.594 billion yuan, a year-on-year decrease of 9.65%.
Can focusing on publicity really cultivate a loyal consumer base?
The answer is undoubtedly no.
Even though marketing can temporarily enhance the popularity and attractiveness of products, wild consumption can only save a while, not a lifetime. In the long run, the impact of intoxicating marketing alone on the market landscape is minimal.
There is no doubt that combined with the performance and market insight of the top players in instant noodles, the gap between the strength of each other is widening.
Master Kong, who is firmly in the top position of the industry, theoretically not only enjoys the dividends of the long-term trend of consumption upgrading, but also benefits from consumption grading when the economic cycle fluctuates.
Retail Business Finance believes that the key to supporting Master Kong instant noodles through the development cycle of the industry is the resilience of market operation, the operation of products and brands, the deep cultivation of users' minds, the persistence of R&D and diversification, and the sensitivity to consumer trends.
03 Innovation and resilience are the keys to success
In the face of the great changes in the instant noodle market, industry insiders pointed out that both channels and traffic are only means of commercial competition, and products and services are fundamental. For China's instant noodle "rivers and lakes", only by constantly meeting the ever-changing needs of consumers, focusing on products and services, and emphasizing corporate innovation and business resilience, can they be invincible.
1) Innovative products, those who win the "hearts of the people" win the world
Returning to the essence, products and channels are still the two core elements that make a large FMCG enterprise. Through Master Kong's 2023 financial report, its "strong battery life" operation is consumer-centric, and focuses on four aspects: product innovation, food safety construction, omni-channel integration, and digital transformation and upgrading.
Although Master Kong occupies half of the instant noodle market, he has not stopped innovating. Most of consumers' most intuitive perception of Master Kong's instant noodles comes from the product innovation presented by enterprises to consumers.
In addition to achieving good sales across the country with "classic" flavors, Master Kong has increased investment in industrial innovation and upgrading in recent years, and has launched bowls of good products with different styles and even benchmarking "aerospace quality", so as to meet the needs of consumers in different circles for high-quality and healthy diets.
Picture: "Sour Sweet Golden Soup Fat Beef Noodles" and IP "Minions"
According to the financial report, Master Kong instant noodles focus on consolidating the high-priced and high-end market, and simultaneously expand the ultra-high-end market to achieve sales growth. With multi-specification and multi-flavor products to meet different consumption scenarios and diversified consumer needs, and through multimedia marketing and IP cooperation, we attract young consumers and young families. For example, "Sour Fragrance Shuangjin Tang Fat Beef Noodles" and IP "Minions" have strengthened interactive communication with young consumer groups, and their sales performance has been outstanding.
In line with consumers' shopping preference for healthy and high-value products while focusing on the cost performance of products, Master Kong will launch innovative flavors such as "Double Radish Beef Brisket Noodles" and "Spicy Selected Beef Noodles" in 2023 to enhance the brand trial rate and create a top-notch instant noodle brand image. The large-volume product "Master Kong One and a Half Times" satisfies consumers' demand for cost-effective products, and the crispy noodles are aimed at the casual snack market of students and a wider audience. In addition, by grasping consumers' demand for "small gluttony and little hunger", the sales of "Master Kong Mini Bucket" have increased significantly, realizing the refined satisfaction of the needs of multiple scenarios.
2) In the second half, it was "resilience"
From the perspective of the industry, only by focusing on the internal strength of Master Kong's instant noodles can we obtain a comprehensive, clear and three-dimensional corporate image, and perceive the down-to-earth and time-honored business strategy of the company's long-termism.
In terms of quality, Master Kong instant noodles have always practiced the national development strategy of "Healthy China" and have zero tolerance for food safety risks. As a partner of China's aerospace industry, Master Kong has successfully applied the aerospace FD technology to the production of ingredient packets to restore the original taste of the ingredients and can be stored for a long time.
Picture: CCTV host Sa Beining visited Master Kong's instant noodle factory
It is worth mentioning that in the face of the rising cost of raw materials (sugar), Master Kong instant noodles still insist on not lowering the standard of products to ensure the health and deliciousness of each bowl of noodles.
"Retail Business Finance" believes that Master Kong instant noodles are reducing costs and increasing efficiency and consolidating market position by improving supply chain efficiency and marketing level. For example, by optimizing the layout of production capacity and improving efficiency, production costs can be reduced.
At the same time, digital management (from raw material procurement, production and manufacturing to warehousing, logistics and transportation) also provides a boost for Master Kong instant noodles to reduce costs and increase efficiency. It is reported that Master Kong's instant noodles digital and intelligent future factory project in Hangzhou realizes real-time monitoring and abnormal control of the equipment status of the whole plant, quickly reflects abnormal production and energy consumption, realizes energy saving and consumption reduction, and comprehensively improves the efficiency and benefits of the supply chain.
04 Conclusion
In the eyes of industry insiders, the "boss" of the industry usually pays more attention to non-competitive fields such as industry innovation, process improvement, and food safety, while the second, third, and fourth are staring at each other's meat in each other's bowls, and are happy to fight hand-to-hand with each other.
Further, in the FMCG market, "offense and defense" is just a competitive strategy. "Internet celebrity" marketing can attract consumers to try it in the short term, and when they return to reason, consumers tend to choose companies and products that have lasted for a long time. The market value conveyed by Master Kong's latest financial report is that the industry can see hope, adhere to innovation to meet consumption-oriented, strengthen resilient development, and the future prospects are still worth looking forward to.