A customer browses the instant noodle section of a supermarket. China's instant noodle industry is experiencing a downturn. Photo: CFP

On February 22, Tingyi (Cayman Islands) Holding Corporation, the largest instant noodle producer in China, announced that its unaudited profits attributable to shareholders  decreased in 2015 by 35 to 40 percent compared with 2014. According to a China Economic Weekly report on February 23, the profits attributable to shareholders was $342 million during the first nine months of 2015, representing a year-on-year drop of 12.67 percent.

Analysts have suggested that the growing popularity of healthy lifestyles in China further contributed to the decline of the instant noodle industry. The company also issued a long statement in which it attributed the 2015 decline to three main factors, according to an inside information and profit warning report released by Tingyi on February 22. According to the statement, the factors are recent quality upgrades resulting in price increases that have caused doubt among distributors; the beverage business proactively making provisions for diminution in value based on conservative financial principles; and fluctuations in exchange rates over 2015.

Tingyi was not the only company to see falling profits in the domestic instant noodle industry. According to the China Economic Weekly report, Taiwanese food and drink company Uni-President Enterprises Corporation saw its net profits drop by 68.8 percent in 2014, marking the largest decline in the last five years. Uni-President also blamed the general decline of the instant noodle industry for its falling profits.

Brand expert Zhu Danpeng said that Tingyi and Uni-President jointly take up more than half of the instant noodle market in China and the negative perspectives of the two companies indicate that the market is experiencing a depression as a result of new food substitutes influencing consumer purchasing decisions, China Business Herald reported on September 2, 2015.

Instant noodle manufacturers started raising their prices in 2014 with the launch of so-called quality instant noodle products valued at four to five yuan more than the original. The products were aimed at increasing market share. But according to China Economic Weekly report, as people, especially the younger generation, now care more about living healthy and distant travel becoming easier, instant noodles, as the preferred food of long-distance travelers, have gradually declined in the market.