Wen | AI Finance and Economics Agency Chen Chang
Editor| Yang Jie
How long have you not eaten instant noodles? The three-minute convenience food that once prevailed in dormitories, trains and overtime offices is disappearing from the sight of more and more people.
Recently, the two major instant noodle leading companies Master Kong and Unification released their 2021 semi-annual reports, and their performance data have declined beyond expectations.
In the first half of 2021, master Kong's instant noodle business revenue was 12.777 billion yuan, down 14.67% year-on-year; unified instant noodle business revenue was 4.398 billion yuan, compared with last year's revenue of more than 5 billion yuan, it also decreased by more than 600 million yuan. The performance of the instant noodle business also dragged the company's overall performance "hind legs", during the reporting period, master Kong and unified net profit fell by 14.5% and 20.45% year-on-year, respectively.
Looking at the entire instant noodle market, the sales situation is not optimistic. According to Nielsen data, in the first half of 2021, the overall sales volume of the instant noodle industry fell by 7.7% year-on-year, and sales fell by 7.3% year-on-year.
Li Yingtao, a senior analyst at Analysys Research Center, told AI Finance and Economics that in general, the revenue growth rate of the industry leader is higher than the overall growth rate of the industry, especially for companies like Master Kong, in the case of already occupying a high market share, the year-on-year decline in sales is more serious than the industry as a whole, which is obviously "abnormal".
What has caused the market space for instant noodles to be squeezed? The development of the takeaway industry is the first to bear the brunt, at the same time, a variety of self-heating food, fast food stand on the outlet, but also in the instant noodle market "grab food".
Instant noodles "double male" Master Kang and Unification are also making changes accordingly. Fast food has begun to be "high-end", and now, even if it is a fast noodle, it is not unusual to sell for 30 yuan.
<h1 class="pgc-h-arrow-right" data-track="16" > instant noodles are out of flavor</h1>
Ms. Wang, a post-90s white-collar worker who came to Beijing from her hometown to work, still clearly remembers her "old friendship" with instant noodles from childhood to adulthood.
She said that when she was a child, taking the pocket money given by her mother and running to the commissary to buy instant noodles such as good food and Hualong was one of the happiest things after school every day; and when she was in middle school and college, the little sisters in the dormitory often liked to cook a pot of instant noodles around their own small electric stove, as if it was the best food in the world. When she first went to work, instant noodles were also her "life-saving" hunger meal when she worked overtime, returning to her residence late at night, spending three minutes brewing a bowl of hot instant noodles, and adding a ham sausage, which could instantly bring comfort to her tired body and mind.
But these are memories of the past. She couldn't remember when or what brand of instant noodles she had last eaten.
In 1970, China's first bag of fried instant noodles was born in Shanghai Yimin No. 4 Factory, opening the industrial road of this industry. In the 30 years since, instant noodles, an instant food, have flown into thousands of households. According to the World Instant Noodles Association, china's annual sales of instant noodles peaked at 49.8 billion packs in 2007, while in that year, China's population was 1.3 billion, and on average, each person ate 38 packs of instant noodles a year.
In 2013, that number was 46.22 billion bales; by 2016, it had fallen to 38.52 billion bales. In three years, domestic sales of instant noodles decreased by 7.7 billion bales.
In 2013, Meituan Takeaway was officially launched. During that period, it was at the stage of rapid development of the domestic takeaway industry and the rise of the "subsidy war".
Instant noodles are "not fragrant", and the development of the takeaway industry is one of the main reasons, which is the view expressed by many industry insiders to AI Finance and Economics. Wu Daiqi, CEO of Shenzhen Siqisheng Company, combined with the analysis of consumer groups and consumption scenarios, said that the main consumer groups that ate instant noodles in the past were students, people who traveled by train and "migrant workers", and common instant noodle consumption scenarios were families, student dormitories, white-collar overtime offices, green-skinned trains or construction sites.
However, she believes that with the increasing convenience of takeaway, the development of high-speed rail (people stay on trains for a shorter time), the birth of more types of ready-to-eat foods, and the improvement of consumer living standards, instant noodles are no longer a necessary choice for people to eat when they go out and have no time to cook. Although the instant noodle market has picked up to a certain extent due to the epidemic in 2020, it still cannot stop the overall industry from shrinking.
IPG China chief economist Bai Wenxi added that from the perspective of instant noodle products themselves, the aging of the category and poor nutrition will also lead to their relatively weak appeal to users, and they will be diverted under the competition between takeaways that can be delivered quickly and new fast foods such as self-heating rice and snail powder.
Wu Daiqi concluded: "What beat instant noodles is the era: this is already an era of high-speed rail, an era of takeaway and an era of material abundance." ”
<h1 class="pgc-h-arrow-right" data-track="41" > who is replacing instant noodles? </h1>
"Every product, every service, has its own life cycle. Rather than saying that the instant noodle market is in recession, it is better to say that instant noodles are no longer suitable for new needs. Meng Lilian, chief expert of Sichuan Tianfu Health Industry Research Institute, said.
But what will consumers who "abandon" instant noodles choose to eat?
Instant food is not gone. Nowadays, walking into supermarkets, convenience stores, or opening e-commerce platforms, countless new fast food products, including snail powder, self-heating rice, self-heating hot pot and so on, come into view. Instant noodles, which used to be dominated by instant noodles, are also upgrading to instant noodles. In some imported food stores, even international brand instant noodles have become difficult to see, replaced by a variety of instant turkey noodles, udon noodles, ramen and other products.
Like the hot snail powder in recent years, in the early days it was only a specialty restaurant on the street side of Liuzhou, Guangxi, but now it has become a nationally known cuisine.
In 2010, Liuzhou launched the "Snail Powder into Beijing" campaign; two years later, with the broadcast of the program "China on the Tip of the Tongue", Snail Powder only revealed a short 10-second shot in it, but it became famous. From 2015 to 2020, haohuan snail, xi snail club, snail bawang and other enterprises have been established, and the sales scale of bagged snail powder has also risen rapidly from 500 million yuan to 11 billion yuan. During the epidemic in early 2020, for many "foodies", snapping up snail powder has become as important as "grabbing masks", and the monthly sales of major snail powder brands on Taobao have reached hundreds of thousands.
Snail powder to buy home, but also need consumers to go to the kitchen to cook their own food, but for self-heating food, even this step can be saved: consumers open self-heating food, pour into the meal bag with their own cold water, put in the heat bag, cover the lid, you can sit and wait to enjoy the food, convenience is better than instant noodles and snail powder.
During the epidemic last year, with the closure of dine-in restaurants, the obstruction of takeaways, and the rise of the single economy and the lazy economy, many self-heating foods, including self-heating rice, self-heating noodles, self-heating hot pot, self-heating powder, and even self-heating barbecues and self-heating rice cakes, ushered in a fire. According to Tmall data, during the Spring Festival in 2020, the online order volume increased by more than 200% just by the brand of "Self-Hi Pot", and sales exceeded 1 billion yuan in 2020.
Capital also takes a fancy to the outlet of self-heating food. In may 2020 alone, in just one month, three brands, "Cannibals", "Zi Hi Pot" and "Mo Xiaoxian", have obtained tens of millions of yuan in financing, including Hillhouse Group and Jingwei China.
Traditional catering brands that originally did not make convenience food have also entered the market. Haidilao launched self-heating hot pot products, Xibei entered the field of heated ready-to-eat home fast food, and cooking oil brand Duoli also launched the "I Love To Cook" series of fast cooked noodles and cooking rice cooking bags.
Consumers have too many new options for "alternative instant noodles", which have a greater freshness, a variety of categories and richer flavors for users. Some insiders believe that in addition to the impact of the takeaway industry, the emergence of new fast food is also one of the main threats to instant noodles, and it is very likely that they will further erode the market share of instant noodles and exacerbate the shrinkage of the instant noodle market.
"But in the short term, instant noodles will not withdraw from the stage of history." It's just that it has to face the fact that the growth rate is declining, especially for instant noodle products. Li Yingtao said that according to his observation, "in the past five years, the sales of instant noodle products have basically shown a downward trend of 1% per year, in contrast, the average annual growth rate of instant noodle products is more than 15%." ”
<h1 class="pgc-h-arrow-right" data-track="68" > high-end save instant noodles? </h1>
"Pasta is not going away, and instant noodles are certainly not going away." Meng Lilian said, "The content change of instant noodles may be the most important direction in the future." The vitality of instant noodles themselves lies in whether it has the ability to sustainably adapt to demand and even lead demand. ”
The products of the instant noodle network red brand are getting more and more expensive and more and more tricks.
For example, Li Yingtao said that the current Internet celebrity brand "Empty Deliberate Noodles" focuses on the three flavors of "Black Pepper Beef Fillet", "Tomato Meat Sauce" and "Curry Chicken", and there are 6-7 bags of light meat sauce seasoning packages in the package, trying to let people eat good pasta through simple operation, and each product is priced at about 20-30 yuan.
The Internet celebrity brand "Yuan Niangniang" is a typical representative of marketing, the packaging design focuses on the Chinese court style, and is matched with the personalized IP of "selling cute imperial Niangniang", which hits the psychology of young people who are delicious, good-looking and fun.
"Not just instant noodles, all industries are moving towards high-end." Li Yingtao believes that in the past, the level of mass consumption was low, and accordingly many enterprises had a low level of operation and limited technical strength, but now, under the trend of consumption upgrading, from smart phones to clothing and clothing, sports shoes market, etc., are developing in the direction of high-end products. As for instant noodles, the same is true, "For a long time, the main products of brands such as Master Kong and Unity have been mainly instant noodles, and instant noodles have long been labeled as junk food and unhealthy food." Compared with the Japanese and Korean markets, they have completed the transition stage from instant noodles to instant noodles earlier than the Chinese market, which is a process to meet the needs of users' consumption upgrades. ”
"Whether it is imported or some new domestic consumer vegetarian brands, in fact, it is still the concept of consumption upgrading and high-end." Li Yingtao further elaborated that the high-end of instant noodles is mainly reflected in three aspects: one is the high-end packaging and fashion; the second is the health of the product, and the ingredients pay attention to the real materials, such as emphasizing the concept of 0 sugar, 0 additives and nutritional collocation; the third is product standardization, that is, by solving the supply chain problem, the local snacks such as Chongqing small noodles, Lanzhou ramen, Yibin noodles, and snail powder are made into standardized products, and then sold, but it is necessary to ensure that "the taste of offline restaurants is similar to that offline restaurants".
Head instant noodle brands, including Unity and Master Kong, are not willing to show weakness and have started an "increasingly expensive" price war.
Master Kong mentioned in the financial report that it is necessary to "gradually strengthen the layout of high-end products and meet the diversified needs of consumers with multiple tastes and scales.". In April, Master Kong's high-end noodle brand "Tang Master" listed the new taste of sour and spicy pork bone noodles, and the ultra-high-end noodle "Express Suda Noodle Restaurant" listed "Japanese char siu pork bone noodles", with the intention of covering multiple scenes such as office, home and outdoor through bowl noodles, boiled noodles, self-heating noodles and other products.
The "Tang Da Ren" brand under the unified umbrella also launched the "Ji Wei Guan" boiled noodles in the first half of this year, and in the second half of the year will launch the "Flying Knife Cut Noodles", and its "Man Han Da Da" product has also added a new taste of "Cantonese Pepper Pork Belly Chicken Noodles". The most prominent is the self-heating rice brand "Open Small Stove" launched by Unified, which is carton-packed and kept at room temperature, and Unified specifically mentioned in the current financial report that the brand's revenue showed double-digit growth in the first half of 2021.
But corresponding to these actions, the price of such products is also rising. AI Finance and Economics found that the price of 4 boxes of braised spicy beef cooked in The Express Noodle Restaurant of Master Kong express noodles is 66 yuan; the unified "Man Han Dajie" Taiwanese half-gluten and half-meat boiled noodles are priced at 4 bowls of 79.6 yuan. On average, the unit price of a bowl of noodles is nearly 20 yuan, which exceeds the price of a ramen noodle in some offline small and medium-sized restaurants.
But master Kong, the unified "instant noodles high-end" development route will be successful? Wu Daiqi believes otherwise: "The original function of instant noodles is to meet the needs of low-income people or people in specific environments for fast and ready-to-eat food, and if instant noodles shout high-end slogans, but lack new selling points and new functions as support for high prices, it will only bring negative word-of-mouth effects." Although the price of goods is no longer the first consideration for many consumers to buy fast food, if the price of buying a pack of instant noodles exceeds or approaches the price of a takeaway, it is still not competitive. ”
In fact, the "instant noodle bosses" hope to win back consumers by opening up the high-end market, but they also pay a lot of price for this. The two head brands in the first half of this year's financial report at the same time appeared in the embarrassing situation of "increasing revenue and not increasing profits". During the reporting period, the unified revenue reached 13.007 billion yuan, an increase of 10.07% year-on-year, but the net profit was 847 million yuan, down 20.45% year-on-year; Master Kong's revenue was 35.396 billion yuan, an increase of 7.47% year-on-year, while the net profit was 2.035 billion yuan, down 14.5% year-on-year. One of the reasons for this phenomenon is the huge marketing expenses of the two companies.
In the first half of 2021, according to the financial report, the unified sales and marketing expenses reached 3.1 billion yuan, an increase of nearly 20% year-on-year. Its "Tang Da Ren" and "Open Small Stove" series invited traffic stars Wang Junkai and Xiao Zhan to endorse them, respectively.
Master Kong has put a lot of effort into "brand rejuvenation", and its products with different flavors have cooperated with two-dimensional, variety shows, and game IPs such as Qibao, Kung Fu Panda, Peace Elite, and Douluo Continent to attract young consumer groups.
Li Yingtao believes that both Master Kong and Unity have formed an inherent brand brand of "instant noodles" in the minds of consumers, and it is difficult for high-end sub-brands to form a strong position in the short term; it may be more beneficial for them to improve the high-end layout by acquiring new fast food brands.
For consumers, perhaps more interested is what new tricks and what prices the next generation of instant noodles will produce.
This article is originally produced by AI Finance and Economics, an account of Caijing Tianxia Weekly, without permission, please do not reprint it on any channel or platform. Violators will be prosecuted.