INSTANT NOODLES STEAMING BACK TO LIFE

Meticulously making an original cup of instant noodles at a museum is high on Zhou Yi's agenda for her visit to Japan.

Since childhood, she has been unable to resist noodles, the comfort food, sometimes eating them boiled with an egg, vegetables and meatballs.

Zhou, 32, who works for a technology company in Beijing and is planning to visit the Cup Noodle Museum in Yokohama, Japan, this month, said, "As a big fan, it will be a unique experience to select my favorite soup and toppings from many varieties, and make my own style cup noodles."

Vincent Shao, business group director with consultancy Kantar Worldpanel, said China's instant noodle market has picked up in the past 12 months after sales dropped for three consecutive years. Consumers are being drawn back by continuous innovation throughout the industry.

Consumption of instant noodles in China reached 40.25 billion units last year, a rise of 3.3 percent year-on-year, accounting for 38.9 percent of such consumption globally, with China the largest market, according to the World Instant Noodles Association.

This growth continues. Figures from data analytics company Nielsen show that in the first six months of this year, instant noodle sales in China rose by 7.5 percent year-on-year.

However, just four years ago, the industry was hit by a recession. Sales started falling in 2015, falling to 38.52 billion units the following year, according to the association.

Shao said that during this time, the industry faced a direct challenge from booming online food delivery services.

"To gain and keep consumers, online food delivery platforms offered discounts, enabling customers to buy a meal for about 10 to 20 yuan ($1.42 to $2.85)," he said. "Many consumers then started to choose online food deliveries over instant noodles."

Figures from the Meituan Research Institute, an organization with online food delivery and ticketing services platform Meituan Dianping, show that the online food delivery market in 2017 was worth about 204.6 billion yuan, a rise of 23 percent year-on-year.

According to research by the School of Economics and Management at the China University of Geosciences, when the online food delivery market grows by 1 percent, consumption of instant noodles falls by about 0.05 percent.

With discounts significantly reduced in the past year, the online food delivery market has slowed, with some consumers switching back to buying instant noodles, Shao said.

But more important, he said many instant noodle makers have made great efforts to improve the taste of their products and promote healthier recipes and more innovative cooking techniques, which have become popular among customers.

Felix Ma, a principal at consultancy Roland Berger China, said instant noodles were once regarded by some Chinese as "junk food"－being fried, non-nutritious, high in calories and with added preservatives. Consumers with an increasing awareness of healthy food turned their backs on noodles.

"But these aspects of instant noodles were too exaggerated, and many manufacturers now attach great importance to the health concept," he said.

Ma added that the industry has made concerted efforts to improve the flavor of products, including adding more fresh vegetables or meat to the cup. Moreover, many producers are using chicken soup or rib soup－traditionally considered nutritious by Chinese－in an attempt to make consumers reconsider their view that noodles are unhealthy.

In the first half of this year, instant noodle maker Master Kong achieved revenue of 11.54 billion yuan, year-on-year growth of 3.68 percent, and its net profit reached 875 million yuan, up by 31.15 percent on the same period last year.

In a written interview, the company said it has been innovating and upgrading its products to offer "better ingredients, better cooking technology and better taste", to meet consumers' health needs and demand for quality products.

"China's consumption market is becoming more diversified and personalized. We have always been concerned about consumers' needs, especially those of the middle class, young families with children and the new generation of urbanized young people," it said.

As the middle class and young families with children generally pay great attention to quality and nutrition, Master Kong is speeding up innovation, upgrading nutrition and launching high-end products. It said it has a 66.5 percent market share in developed areas of the country.

For middle-class consumers, it has developed the Express series of instant noodles, whose flavor and ingredients are as good as the noodles available in restaurants. It has also launched a series of products, such as DIY noodles and pot-boiled varieties, to meet the needs of young families with children.

To bolster the brand's image of being health-conscious, the company has diversified its products to match different scenarios. In May, together with the National Winter Sports Administrative Center, Master Kong tailor-made an Express series of instant noodles for Chinese winter sports athletes based on their eating habits and nutritional needs.

Jinmailang, a domestic instant noodle maker, said it saw double-digit growth both last year and this, and its main products are noodles that sell for about 4 yuan a cup.

One series of products, which comes in a larger cup, has been particularly popular, with sales this year exceeding 4 billion yuan. The company promoted the series, which uses cups one-and-a-half times bigger than usual, after some customers said they still felt hungry after eating noodles served in traditional-sized cups.

Fan Xianguo, chairman of Jinmailang Mianpin Co, said, "Consumption of instant noodles will be stable in terms of quantity, but a market worth about 50 billion yuan in China could be triggered due to the improvement in the quality of such a product."

Fan attributes the company's growth to its precise awareness of consumers' changing needs.

To dispel fears that eating instant noodles is unhealthy, it uses special freezing and steaming techniques to make its products taste more like freshly cooked dishes, and also adds some fried ingredients, including scrambled eggs with tomatoes, and shredded pork with green pepper.

"Moreover, we will diversify our sales channels and offer different products to consumers in different regions," he said. For example, in airline lounges, Jinmailang has offered nonfried noodles－whose taste is closer to those that are freshly cooked－to business travelers requiring both convenience and quality.

Fan said, "Jinmailang has also expanded its sales to South Korea, bringing Chinese flavor to overseas markets, which has been extremely popular," adding that the company sells 4,800 units a day of Sichuan-style instant noodles with sesame sauce at its South Korean convenience stores.

Xue Enyuan, executive director of convenience store chain Bianlifeng, said that from January to October, daily sales of instant noodles at each of its stores on average rose by 128 percent year-on-year. Bianlifeng sells seven brands of noodles, including products from Japan and South Korea.

Xue said more Chinese consumers are increasingly willing to try new products or those of niche brands. The company's stores have been introducing new brands, one of the most popular being instant noodles that feature the soft drink Sprite among the ingredients. The recipe for these noodles, which initially sold well online and were later introduced to physical stores, was developed by film star Huang Lei.

"This product sells very well in our stores," Xue said. "'Star effect' may be one reason, but the other main one is young consumers' curiosity and pursuit of products that are well-known online."

He said that compared with traditional flavors, many reputable and high-end products sold online by different manufacturers have proved to be extremely popular with consumers, as they have added more variety to the instant noodle market.

"In the past, who would have thought about adding Sprite to the seasoning of noodles? Would the flavor produced be a nice surprise or a total disaster? I'm sure many consumers bought them for the first time out of curiosity," he said.

Xue said that with the pace of life quickening, people are becoming increasingly reluctant to cook. Moreover, due to an increase in the number of single people, more consumers are looking for 'food for one'.

"Instant noodles cater to consumers' demand for speed and convenience and are just right for one person," he said, adding that the potential for the market is huge.

Ma, from Roland Berger, said the market has become increasingly diversified. On the one hand, there is a large group of people who need to eat conveniently and cheaply, but on the other, some middle-income or young consumers require healthy products with a better taste.

"It is less likely that single-flavor products will cater to all consumers across China," he said. "To retain business, it is critical for instant noodles makers to continue innovating and upgrading their products, whether they be noodles, toppings, soups, the method of production, or design of the bowls and cups."

He added that nearly 60 percent of sales among several major domestic brands now come from medium and high-end products, but manufacturers will have to continue innovating to expand.

"There is great potential for them in making products with flavors tailored specifically for different regions and groups of consumers," Ma said.