It is understood that, in fact, instant noodle companies are also trying to find a breakthrough mode, but ultimately all seem to have encountered a bottleneck. First of all, in the face of market erosion, the large instant noodle giants are upgrading the instant noodle grade on the attempts to achieve high-end products, hoping to get rid of the instant noodle is "cheap food" positioning, on the one hand, can increase revenue, on the other hand, can also adapt to people's taste to improve. Master Kong has repeatedly upgraded its instant noodles in terms of ingredients, soup and packaging. After the Spring Festival this year, Master Kong launched a series of varieties of "black and white pepper", which are made of high-flavor soup. At the same time, for urban white-collar workers also launched a "soup master" high-end cup noodles. These products make instant noodles unit price to 4.5 yuan or more class. Unified also tit-for-tat vigorously layout of the high-end instant noodle market, only the first half of the year has launched the "Metropolitan Pavilion", "together with a city" and "full of Han Banquet" three new brands, through different brands and price points layout of different consumer spending. Different brands and price points layout of different consumer groups. Among them, "Han Banquet" purely high-end market, the price was set at 29.9 yuan, hoping to really become a meal replacement.
But in fact, instant noodle companies are also facing a test of the effectiveness of this upgrading strategy to raise prices. Master Kong had in the fourth quarter of last year to upgrade the product price increase, but immediately led to the sales channel sales wait-and-see, sales fell significantly. According to data released by Master Kong, the decline in sales of instant noodles during the period directly led to a 23.99 percent year-on-year drop in net profit from the instant noodle business last year, which fell to US$274 million.
And the situation has continued into the first quarter of this year, with Master Kong admitting that the recession has been narrowed in the first quarter of this year after continuous communication. The decline in profit from Master Kong's instant noodle business narrowed to 15.82 percent in the first quarter. However, due to poor sales during the period as well as phased product mix adjustments, it instead led to an instant noodle gross margin that also declined year-on-year. This, coupled with a significant increase in advertising investment during the period, led to a 48.34 percent year-on-year decline in net profit from instant noodles in the first quarter of this year, to just US$48.66 million.
Instant noodles defeated by online takeout
The rise of online takeout has had a direct impact on instant noodles, whose consumer demographics are highly attuned to each other. Many young people who used to stay at home and rely on instant noodles are the main force of online consumption, and a little bit of hand, online payment may wait for a meal, the process is even simpler than soaking instant noodles. What's more, the network delivery in taste, the amount of food are obviously far better than instant noodles.
The outside world is not optimistic about the prospects for this high-end transformation of instant noodles, "although it can raise the price point, but it is ultimately a niche consumption and can not form the norm. Because I want to improve the quality and price of the method to go with the main meal to grab the market, I'm afraid it's not very realistic, I'm afraid that once the price of more than 10 yuan, the first thing people think of may be fast-food boxed meals! More crucially, instant noodles in people's consumer attitudes are not "serious meal", at best, just no way to emergency only to eat, and I am afraid that the formation of this impression with the instant noodles for a long time of low-cost competition as well as deep-fried cakes unhealthy concepts related to, and not overnight can be resolved.
The desire for a younger consumer base can be seen in the fact that several major instant noodle giants have invested heavily in TV entertainment programs. However, many young people who love to stay at home or work outside and find it difficult to take care of their meals, which were the mainstay of instant noodle consumption, are now attracted away by online takeaways. A little bit of hand, online payment can wait for a meal, the process is even simpler than soaking instant noodles. What's more, online delivery is clearly far superior to instant noodles in terms of taste and quantity of food.
More crucially, network delivery is clearly far superior to instant noodles in terms of taste and meal size, and is a direct roadblock to high-end instant noodles that cost more than $10, though not in terms of price. Instant noodles companies are also trying to reverse the situation, unified this year launched the "Metropolitan Bistro" series, is the theme of the special noodle flavors of various cities in China, want to capture the young people wandering outside the market. Master Kong also continues to launch a variety of flavors in the hope of impressing young people to pick up the noodle bowl again, not just in the last resort.
But these don't seem to have held back the appeal of takeout to young people. For the decline of the instant noodle market, some consumers said the most critical or ten years on the taste is not much change, relying solely on seasonings and vegetable scraps thickening flavor mode is obviously not adaptable to taste more and more tricky young people. And young people have always been the largest group of instant noodle consumers. "I can only be based on the bag on the pattern of flowers and greens on the side of the imagination while swallowing noodles, ten years past or so, death will no longer eat!" Xiao Hu, who works in a network company, said he basically calls for takeout every day and never eats instant noodles again.
Financial Observations
Industry mimicry makes instant noodles lose innovation power
In fact, the instant noodle industry insiders for people on the instant noodle taste of the spit is also well aware of an instant noodle business people said, technology and cost are hindering the development of the key to innovation of the instant noodle. Technically, can only be done to dry fresh vegetables made of vegetable packages, varieties are relatively single, there is no more advanced technology to allow the molding of the side dishes can be both long-term preservation with instant noodles and can be heated through the hot water for a short period of time on the restoration of the state, especially in the case of meat products is more so. Another point is that once the price point of instant noodles exceeds a certain range means self-destruction, which directly determines the instant noodles to be calculated raw material costs. "There is a high demand for ingredients and manufacturers need to keep a tight rein on costs, both of which limit the exploitable range of instant noodles to a very narrow range."
Another key reason why instant noodle firms have been negligent in innovation is the inability to form effective innovation protection. When a brand innovates a new flavor, other brands will jump on board, imitating everything from the name to the packaging pattern and color. Master Kong's watchword variety of braised beef noodle red bag has now become the standard of each brand with the same flavor. Beiqing Daily reporter saw in the supermarket, braised beef noodles is basically the main product of all brands of instant noodles. The unification of several years of research and development of the old altar pickled vegetables noodles is the last two years caused by the industry to follow the varieties, including Master Kong, White Elephant, today's McLang and so on have launched a similar product, the counterparts of the purple bags are imitated to the exact same, in the supermarket without looking closely it is really difficult to distinguish. There are even industry sources tease, "If you develop a flavor at all no one else to imitate, can only say that the sales of this product does not work!"
The main reason for the industry's prevalence of imitation show is that many small and medium-sized enterprises are not willing and unable to develop new products. According to industry insiders, to push open a new flavor of instant noodles nationwide, without millions of dollars of advertising is simply impossible. At present, the gross profit per packet of low-end instant noodles is only 10%, i.e. one or two cents per packet. If there is no large-scale sales, it is very likely that the new varieties developed will lose money, which makes many companies prefer to wait for imitation to get a share of the pie rather than investing in the development of experimental products. This has led to the domestic instant noodle industry becoming a situation where several giants develop and other brands follow suit. The high degree of homogenization competition makes the developer's market share is affected to some extent, and the followers can only follow the soup, which is obviously unfavorable to the development of the whole industry. "Red sea is overheated, blue sea lonely", some people describe the instant noodle market homogenization, less level, no difference in the status quo of competition.