The instant noodles that were "difficult to find" last year are no longer fragrant this year.
Recently, the instant noodle "shuangxiong" Master Kong and Uni-President (00220.HK) have announced their first half results. The operating income of the two companies both increased. Master Kong recorded operating income of 35.396 billion yuan, a year-on-year increase of 7.47%; unified revenue was 13.007 billion yuan, a year-on-year increase of 10.1%.
However, the net profits of the two companies have declined to varying degrees. The net profits of Master Kong and Uni-President have fallen by 14.5% and 20.45% respectively year-on-year. The main reason for the increase in revenue and the lack of profit is due to the drag of the instant noodle business.
"The sharp decline in instant noodle performance by Master Kong and Uni-President is unique. In the first half of 2020, due to the impact of the epidemic, home food consumption has become the mainstream, leading to a sharp increase in sales in the first half of 2020. In the first half of this year, the epidemic eased and instant noodle consumption rebounded. To normal.” On August 26, food marketing expert Yu Runjie analyzed the Times Weekly reporter.
Nielsen Data show that in the first half of 2021, instant noodle sales decreased by 7.3% year-on-year.
From the fragrant pastry during the epidemic period to the declining business now, has the instant noodle industry entered a cold winter again?
According to Runjie, the decline in instant noodle performance is related to the decline of the overall category. Major brands of instant noodles continue to innovate their tastes, ingredients, and techniques, but consumers have lost their freshness in the old categories of instant noodles. On the contrary, they are more interested in new fast foods such as instant hot rice, snail noodles, and meal replacement powders.
(Source: Vision China)
Instant noodles are getting more expensive
From the financial report, the instant noodle business dragged down Master Kong's and Uni-President’s 2021 first half performance.
Unified food business had revenue of 4.710 billion yuan in the first half of the year. Among them, instant noodle business revenue was 4.398 billion yuan, accounting for 93.36% of food business revenue and 33.81% of total revenue. The entire food business segment has reduced nearly 500 million yuan in revenue from 5.206 billion yuan last year.
Master Kong’s instant noodle business revenue was 12.722 billion yuan,A year-on-year decrease of 14.67%. During the period, due to the increase in raw material prices and changes in the mix, the gross profit margin of Master Kong's instant noodles fell by 6.46 percentage points year-on-year to 23.89%. Due to the year-on-year decline in revenue and gross profit margin, the net profit attributable to the parent company of the overall instant noodle business in the first half of the year fell 47.13% year-on-year to 896 million yuan.
It is conservatively estimated that in the first half of this year, Master Kong and Uni-President reduced their instant noodle business revenue by at least 2 billion yuan in total.
On August 25, the relevant person in charge of Master Kong told the Times Weekly that, except for the impact of the “high base” of the epidemic in 2020, in the first half of 2021, the sales revenue of Master Kong's instant noodles still increased by 10.2% compared with the same period in 2019.
However, in recent years, the sales growth rate of the instant noodle industry has far exceeded the sales volume growth rate. In other words, the more instant noodles are sold, the more expensive they are, but the growth of consumer groups is weak.
According to the research report of Guotai Junan Securities , from 2016 to 2020, the overall domestic instant noodle retail sales growth will be 1.3%, 3.6%, 8.0%, 7.2%, 4.7%, and the overall sales growth will be -5.7%, 0.3%, respectively , 3.2%, 1.5%, 0.1%.
The Zhiyan Consulting report shows that since 2018, the demand for instant noodles has begun to decline. In 2019, the demand for instant noodles in China was 5,374,100 tons, a decrease of 1,262,800 tons from 2018, a year-on-year decrease of 19.03%; there will be a rebound in 2020, 2020 From January to November, the demand for instant noodles in China was 4,907,200 tons.
Competitors lie on all sides
"In the past, instant noodles were mostly meal replacements for low- and middle-end consumers, but in the past five years, Master Kong and Uni-President have raised the banner of'consumption upgrade' and launched mid- and high-end instant noodles. "Yu Runjie said.
In recent years, Master Kong and Uni-President have both made great efforts in the high-end market, respectively launching the "Master Soup" and "Tang Daren" series of products. In 2018, Master Kong also launched the ultra-high-end noodle "Express Soda Noodle House" with a single box price of about 25 yuan.
According to Tingyi’s financial report data, in 2020, Tingyi’s high-priced bag noodles revenue will be 13.06 billion yuan, a year-on-year increase of 28.12%.The growth rate is higher than that of mid-priced bag noodles.
Although product upgrades have effectively catered to consumer trends, instant noodles are still facing more new categories.
CBNData "2021 Convenient Fast Food Industry Insight Report" shows that a large number of new fast food products of cutting-edge brands have emerged in the industry, such as instant hot pot, instant porridge, instant vermicelli, noodles, etc.
The "newcomers" on the instant noodle track are very eye-catching. While sales are growing rapidly, they are also favored by capital.
For example, brands such as Ramen Talk, Yuan Niang Niang, and Jin Mian Tang are targeted at young people and focus on healthy high-end product routes. Among them, Jinmiantang opened a flagship store on Tmall on December 30, 2019, with sales of 3.5 million yuan in the fourth quarter of 2020 and 13.55 million yuan in the first quarter of 2021, a growth rate of 287%.
Recently, Jinmiantang has completed a Series B+ financing of tens of millions of RMB. Ramen said it also completed 6 financings in 5 years.
In this context, instant noodle giants are also constantly looking for new growth points, and categories such as self-heating rice and boiled noodles have entered the battlefield.
In the first half of 2021, Uni-President’s self-heating food "open small stove" revenue grew at a double-digit rate; Master Kong launched a non-fried cooking process "fresh cooked noodles", taking Tmall flagship store as an example, the price is 62.7 Yuan/3 bags.
In the financial report, Master Kong stated that the company's instant noodle business will continue to use more price bands, multi-standard packaging, and diversified taste products to meet the different needs of consumers.
Source: Times Weekly
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