Instant noodles as single product success
Feb. 5, 2013
by Morton I. Sosland
While reliable data are lacking to affirm that baking bread is the world’s top user of wheat flour, the temptation is great to cite in second place another food: instant or cup noodles. Since instant noodles are very much a modern-day, even fairly new food as compared with bread’s venerability, it is instructive to examine how such a new product has captured so grand a market share. Yes, convenience and cheapness account for a large part of the success of instant noodles, once more emphasizing for the food industry the essential role of these forces in driving demand. Yet, a deeper look emphasizes that product innovation, both in flavoring and product quality as well as in packaging, deserves credit for boosting demand.
The best source of data on instant noodles is the World Instant Noodle Association, which owes its creation to the late Momofuku Ando, the Japanese inventor of this product whose company, Nissin Foods, ranks among leaders of the global industry. It was Mr. Ando who at a time of post-World War II food shortages saw the opportunity to use relief shipments of American flour to make a noodle product that would provide needed nutrients. As his product’s reach extended to other countries, he sponsored the association to serve as a clearing house for sharing information as well as to lead in spurring donations of instant noodles in natural or other disasters causing an immediate food need. Quite unexpectedly, instant noodles, free of nuclear contamination, assumed an essential position in feeding the Japanese when the nation, as a result of natural causes, faced a nuclear disaster last year.
It is in hardly 50 years that instant noodles have become a product with annual sales within range of 100 billion packets. Half of those sales are in China, where the largest noodle maker, Tingyi Holding, recently hosted a “summit” of the association. The main agenda item involved dealing with criticism of instant noodles as unhealthy because of claims of excess sodium and fat as well as the flash frying used in making the product. The industry is taking steps to mitigate the attacks, while engaging in marketing to underscore the fundamental value of noodles in assuring an adequate food supply for a growing population.
Hardly anything emphasizes this role more starkly than the expansion of demand ruling in every country where instant noodles have a foothold. After China, Indonesia is the largest market, at 14.5 billion packets per year, followed by Japan at 5.5 billion, Vietnam at 4.9 billion and the United States, 4 billion. Demand is coming on strong in countries as diverse as Russia and Brazil.
Indonesia is a fascinating example of the way this product has affected the makeup of the entire food industry. The Indofood Group, Indonesia’s largest food manufacturer, is also the world’s largest manufacturer of instant noodles. To supply that demand, its flour milling unit, Bogasari, ranks as one of the world’s largest, operating a milling facility in Jakarta that is unrivaled. At one time, Indofood turned out most of Indonesia’s flour to make noodles. It now must deal with 16 competitive milling companies. This nation’s noodle market growth matches its 6% annual uptrend in gross domestic product, reflecting the way rising disposable income has created a very different food market where a product like instant or cup noodles has captured an unbeatable position.
Indofood in Indonesia, Tingyi in China and Nissin in Japan are in the forefront of efforts to spur instant noodle demand. In China, Tingyi is credited with introducing an incredible 280 different flavors. The huge market held by instant noodles, largely at the expense of rice, has been deemed well worth saving to the point that every sector — flour miller, nutrient provider, spice supplier and packaging producer — has joined to assure that this position continues to build. It serves as a stark reminder of what can be done with a single successful food product.