Even noodles are subject to fashion. Tingyi, the noodlemaker with more than half of the market for instant varieties in China, has reported slowing demand and rising costs. The pattern for consumer staples is clearly repeating itself. But what if, in addition, China turned out to be not as keen on Asia’s top snack as its regional neighbours?
Staples cycles are straightforward: create a market, watch sales and profits boom, then as it slows, spend more on marketing in the fight for share while crossing fingers. Even something as central to Asian habits as noodles are no different. Tingyi reported that noodle sales grew 6.4 per cent year on year in the first half, down from a five-year average of one-fifth. Margins slipped as a price war intensified promotional costs. Tingyi, however, believes that China’s urbanisation and rising wealth will underpin growth.
Noodle sales seem unlikely to decline soon, but they might not grow as Tingyi expects. China consumes 3kg, or 30-odd packets, of instant noodles a head, according to Nomura. Hong Kongers, a natural proxy for wealthier Chinese habits, consume 5kg, or 50-odd packets a year. But Hong Kongers work an average 49 hours a week compared with 43 hours in China – instant noodles being the perfect, albeit nutritionally deficient, quick meal. Should China’s rising wealth produce more health-conscious workers, or if longer hours do not materialise, then Hong Kong levels of noodle consumption may be elevated rather than China’s being low.