Instant noodles also known as instant ramen are pre-cooked noodles sold in a dried block with seasoning powder packed separately. The instant popularity of instant noodles is due to its quick preparation time. The noodle became ready to eat just in two minutes by adding boiling water. Some instant noodle products are seal packed or in the form of cup noodles. These noodles can be reheated or eaten straight from the packet/container. The dried noodle’s main ingredients are wheat flour, palm oil, and salt apart from other flavouring ingredients such as salt, monosodium glutamate (MSG), seasoning, and sugar.
This popular meal is invented in 1958 by a Taiwanese-Japanese inventor Momofuku Ando and often claimed to be the best invention of the twentieth century. The simplicity of instant noodle preparation and its taste made it to be one of the widely consumed meals around the world. China alone consumes about 40 billion packages of instant noodles per year which is approximately 39% of the world’s total consumption.
Role of palm oil in instant noodle
One of the common dehydrating processes when producing instant noodles is frying. Noodles using the oil frying method could reduce the moisture content by up to 3-6%. Hence, oil is regarded as a vital component of instant noodles. The amount of oil-fried instant noodles could take up as much as 20% of its total weight. Hence palm oil is preferred as the frying oil for instant noodles due to its lower cost and it has high smoke point. Apart from that, one of the main requirements for instant noodles is that they must have long shelf stability.
Due to the often-harsh conditions during transportation, handling, and storage before the products are consumed, the clear advantage of palm oil in instant noodles truly manifests itself here. During the inception of the noodle industries in China in the late 1970’ where palm oil was still virtually unknown, different types of locally available oils were tried out including animal fats but with little success. The quality of the noodles was poor and turned rancid within a very short period. Palm oil was then introduced and once some technical issues were overcome, it has never looked back ever since. Palm oil in its natural form is a well-accepted norm for instant noodle frying. The noodles fried with palm oil possessed dry and good texture, oil absorption well within the legislated limit of 20%, and most critical of all, they have excellent shelf lives of 9 months to 16 months.
Key market players of instant noodles
The instant noodle industry is a mature industry monopolized by a few big names. The main key players of the instant noodles market are MASTERKONG, UNI-PRESIDENT, JIN MAI LANG, and BAI XIANG. These 4 companies occupied more than 80% of the total market share in the instant noodles market in 2018. MASTERKONG and UNI-PRESIDENT alone accounted for 60% of the overall market share.
Some Malaysian imported brands such as MAMEE, VIT’S, MYKUALI, CARJEN, and LONDON WF are also present in China. Based on the data by IHS Markit as reported by MATRADE, the top 5 provinces in China that imported from Malaysia from January to July 2020 were Shanghai; Zhejiang, Guangdong, Jiangsu, and Shandong, with a market share of 49.1%, 21.2%, 17.6%, and 10.7% respectively.
Demand for instant noodles in China
Instant noodles consumption in China reached 41.45 billion units last year, a rise of 2.98% y-o-y accounting for 38.9% of such consumption globally, according to the World Instant Noodles Association. This makes China the largest consumer of instant noodles in the world.
Source: World Instant Noodle Association
Based on JD’s report, during the spring festival, the sales of instant noodles have reached 15 million bags, with a sales value of brands such as MASTERKONG and UNI-PRESIDENT increased by 20 times and 15 times respectively.
One of the factors that could explain the huge popularity of instant noodles among the Chinese is the mass movement of surplus rural labour to the Chinese cities. Instant noodles are often welcomed as the favourite food of the migrant workers due to its value for money, tasty and easy to prepare nature. Due to the huge demand and mass consumption, Instant noodles over the years has become an important pillar in the Chinese food industry.
Besides, the fast-moving hectic lifestyle of rapid development forces the working individuals to rely on quick meals which require less cooking. This is catalysing the noodles market to thrive. Instant noodles are available in many different flavours to cater to different needs of consumer segments such as health-conscious youngsters, vegetarians and vegans widen the market share as well.
The rapid expansion of e-commerce platforms such as Taobao, JD, Hema, Elema and other local fresh and grocery platforms has been a successful marketing channel for this gain in recent times. Meanwhile, easily accessible retails stores and hypermarkets also has a direct positive effect on instant noodles sales as well.
This year, COVID -19 Pandemic made a big change in the way the Chinese bought and consumed food. This is a challenging year for most of the industry but not for instant noodles. According to the IHS Markit, the overall import of instant noodles grew by 42.15 % from January to July 2020. During the same period, the instant noodle sector in China saw its overall sales volume edge up by 5.6 % yearly and expected similar growth until 2025. Overall sales revenue increased by 11.5 % year on year basis, according to market research firm Nielsen. The estimated production of instant noodles this year is around 6.06 Million MT compared to 5.73 MMT in 2019 (Statista). This production is projected to consume approximately 1.22 Million MT of palm oil. This is encouraging news for the palm oil industry as it will increase the volume of china’s import of palm oil.
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