Instant food regains market share with surging profits amid pandemic
Published: Sep 20, 2020 03:02 PM

A bowl of instant noodles served Photo: IC

Instant food consumption in the first five months of 2020 surged 150 percent year-on-year, particularly in February where consumption skyrocketed 2130 percent year-on-year, according to data from a recent meeting, launched by the fast food industry.

In the past few years, most instant noodle producers were concerned about market prospects due to falling profits and losses of market share in an industry now dominated by takeaway service companies, which can deliver all varieties of food to customers in minutes.

However, the COVID-19 pandemic came with lockdown restrictions; the number of people eating out reduced in the first half of 2020 and instant food has made a comeback, this was particularly true during the lockdown period in February this year.

In the first six months of this year, convenience food manufacturers above designated size achieved operating income totaling 137.15 billion yuan ($20.26 billion) in China, an increase of 4.7 percent year-on-year, with total profits of 8.75 billion yuan, an increase of 12.8 percent from last year.

As an example, food and beverage producer Master Kong's instant noodle business achieved revenues of 14.91 billion yuan in the first half of this year, an increase of 29.16 percent year-on-year, accounting for 45.27 percent of the company's total revenues. 

Net profits in its instant noodles business came to 1.7 billion yuan, an increase of 93.54 percent year-on-year. 

Instant noodle companies such as Jinmailang and Baixiang also showed strong momentum. According to reports, in June sales of Jinmailang instant noodles increased by 50 percent over the same period last year, and Baixiang saw its operating revenue in the first quarter increase nearly 40 percent year-on-year.

The instant food industry is expected to cover a broader market even in the post-pandemic period, analysts said. Apart from the feature of convenience for instant food, the industry is ramping up efforts to increase its added value.

Some instant food companies are developing a number of new forms of meals such as instant hotpot and instant chicken soup with rice to satisfy consumers' requirements for both nutrition and flavor, in a bid to seize the market share.

For now, the future of the instant food industry and how it will develop to seize market share amid fierce competition in the catering industry is yet to be seen.

Global Times