Pasta Tense-The War Over Instant Noodles

Over the past ten years, Taiwan's Ting Hsin Group has conquered the instant-noodle market in mainland China and turned its Master Kang brand into a household word. The Ting Hsin Group's annual sales currently stand at an impressive 6.5 billion instant-noodle packets per year. At the end of last year, Ting Hsin invested NT$1 billion back in Taiwan, and awarded Wei Chuan Foods Corporation a contract to produce its Master Kang noodles. At the bargain price of NT$16 a packet, they quickly made inroads into the instant-noodle market.

Wei Ing-chou, chairman of Master Kang Holding Company, announced an ambitious plan to acquire 20% of the Taiwanese instant-noodle market within two years and to have Master Kang's entire mainland product line sold on the Taiwanese market based on a local production model.

Uni-President Enterprises Corporation, which currently holds a 50% share of the market, is gearing up to meet Master Kang's onslaught. To protect its market leadership, Uni-President has joined with President Chain Stores Corporation to offer a 20% discount on its entire range of instant noodles, and also plans to bring out a line of noodles based on concepts of healthy eating.

Prince Noodles was the first instant-noodle brand. It started the kiddie craze to eat noodles "dry."

An all-out "noodle war"

Speaking of Ting Hsin's return to Taiwan to capture the market, Wei Ing-chou underscores that Master Kang instant noodles do not have a specific competitor in Taiwan, but rather aim to succeed throughout the Greater China economic region. "To Master Kang Holding Company, Taiwan is an extremely important market from a business as well as an emotional perspective. That's why the company decided to invest back here in Taiwan," explains Wei Ing-chou.

In Taiwan, Ting Hsin has imported state-of-the-art Japanese production equipment to its factory in Touliu and pooled resources with Wei Chuan to introduce the mainland's number-one-selling Master Kang instant-noodle brand in its homeland.

Wei Ing-chou also reveals that after its instant noodles gain a firm foothold in Taiwan, the company will sell soy sauce, yoghurt and other products it has successfully developed in the mainland.

Ting Hsin is challenging one Taiwanese food enterprise after another to see who will blink first. Simon Hung, Uni-President's public affairs director, explains that in addition to intensive marketing activities already underway, the company is making every effort to develop new products, including Uni-President jisi mian (shredded-chicken instant noodles) and instant noodles that are not fried in oil and only contain 280 calories per pack. Compared with most instant noodles on the market, which have approximately 450 calories, these "health food" instant noodles will satisfy buyers wishing to watch their weight.

Another Taiwanese company, Wei Lih Food Industrial Co., has no intention of being caught unawares in the noodle war. To protect its territory and open up new markets, Wei Lih will not only rely on its well-known zajiang mian (Sichuan-style bean paste noodles) and rouzao mian (onion-flavored pork noodles), but it will also introduce two Korean-style instant-noodle products to attract Korean food enthusiasts.

Competition in the instant noodle market is fierce: new products with all sorts of names are being introduced all the time.

A man's favorite

What makes entrepreneurs sharpen their weapons at the sight of a small packet of instant noodles? What has raised such a big market storm? According to a study conducted by the Hsinchu-based Food Industry Research and Development Institute, in 1993 the Taiwanese instant-noodle market had a turnover of NT$6.3 billion. By 2001, the instant-noodle market had hit the NT$10 billion mark. In other words, the Taiwanese instant-noodle market is a business opportunity worth more than NT$10 billion.

A recent investigation conducted by ACNielsen has also shown that in recent years the instant-noodle market has not been in the slightest affected by the recession: Despite the doldrums affecting the economy as a whole, sales have not dropped. From January to September of last year, total sales of instant noodles rose by 2.4% on the previous year-an impressive achievement.

Who eats instant noodles? What makes consumers love and buy them? From August to October of last year, Koos International and the marketing and research department of United Advertising Co. conducted a survey which showed that 86% of Taiwanese people polled had eaten instant noodles within the past week. The largest groups among them were male, blue-collar workers and students under 24. The survey also revealed that many students who live in rented housing away from their parents' homes eat a bowl of instant noodles almost every day.

Of the wide variety of instant noodles on the market, the most popular are onion-flavored pork noodles (44%) and beef-flavored noodles (34%), followed by shrimp noodles, pork rib noodles, and rougucha mian (Singapore-style pork-broth noodles with herbs). The main reasons consumers buy them are their convenience, taste, ingredients, advertising, brand-recognition, and price. Young people are keen to taste new flavors, making it necessary for noodle manufacturers to bring out new products. It's a buyer's market. Given the large number of brands, consumers are hard put to choose among them, and instant noodles with a high level of brand-recognition have a clear advantage.

It is worth noting that as the social environment changes, the fresh fish and meat traditionally used as offerings during the Ghost Festival and other religious holidays are gradually being replaced not only by preserved fruit and cereals but also by instant noodles. This trend also tends to drive up sales.

Following its success in the mainland, Master Kang has returned to Taiwan with a low-price marketing drive.

From suitcase to the South Pole

To discuss instant noodles we have to go back to the Japan of 40 years ago. It is no exaggeration to say that instant noodles changed the life of the Japanese people. Following the development of food-preservation and food-processing technologies, instant noodles were first invented in Japan. For students studying for exams, employees doing overtime, and bachelors living away from home working at their first job, instant noodles were a perfect choice. They even became a favorite children's snack. Instant noodles played an important role when Japan first established an observation post on the South Pole and sent mountaineering and sports teams to faraway places. Even the Japanese prime minister has instant noodles in his luggage when traveling abroad.

The first bowl of instant noodles saw the light of day on August 25, 1958. In those days, the manufacturers called them chicken noodles. Later, soup noodles, miso noodles, zhonghua liangmian (Chinese-style cold noodles), fried noodles, cup noodles, and other styles of noodles were gradually added to the range on offer. Before the first oil crisis, Japan's instant noodle production rose steadily. The Japanese feeling about instant noodles is summed up in a doggerel that goes "Have a bowl before work and watch your strength grow." These words have expressed the Japanese love of instant noodles for decades.

Responding to the popularity of instant noodles, Japan's largest manufacturer, Nissin Food Products Co., continues to develop new products, including microwavable noodles and noodles that can be cooked outside the home with an automatic heater, which are convenient for people on vacation. Nissin Food Products has also proudly declared that instant noodles have made an important contribution to the internationalization of Japan. Many Asian countries have learned to make instant noodles from Japan. Instant noodles will always please millions.

The Taiwanese instant-noodle market has been international for some time: noodles made in Japan and South Korea can be purchased in local supermarkets.

A taste of Taiwan

In 1968 the San Miguel Corporation brought out Taiwan's first instant noodle brand, "San Miguel Noodles," which are still going strong. But South Korea had begun producing instant noodles in 1963, five years before Taiwan. Forty years ago, this humble snack quickly spread all over Asia and gradually became an important food staple for ordinary folk.

Initially, Taiwan imported the technology to make instant noodles from Japan. But because Japanese-style ramen was not to the taste of Taiwanese consumers, sales were less than ideal. When San Miguel subsequently introduced its San Miguel noodles, which suited the Taiwanese palate, sales rose rapidly.

Many factories sprang up in response to the great market demand: by April 1971, some 20 factories had registered with the government as manufacturers of instant noodles. This is not counting underground factories. At a time when Taiwan's population was 14 million, an estimated 600,000 packets were sold daily, which meant an average per-capita consumption of 16 packets a year. In Asia, the biggest consumers of instant noodles are Taiwan and Japan, followed by South Korea, Hong Kong, and Singapore.

After many years of fierce competition, the Taiwanese instant-noodle market has begun to stabilize. Sales figures for the year 2000 showed that Uni-President held the biggest market share (50%), followed by Wei Lih (20%), the Vedan Group (18%), Ve Wong Corporation (7%), and the King Car Group (2%). It remains to be seen how the market will be affected by Master Kang's onslaught.

Master Kang instant noodles, made by Taiwan's Ting Hsin Group, are taking the Chinese mainland by storm, with estimated sales of 10 billion packets per year.

Moderation: the healthy choice

In the 40 years since instant noodles first appeared on the market, sales have risen steadily, but so has the number of news reports of the adverse aftereffects of eating instant noodles. The industry has long been unable to allay the general public's suspicions about the health effects of instant noodles. Many housewives have nagging doubts and won't let their children eat too many instant noodles.

One cautionary tale involves an American student at Tunghai University in 1983 who, having difficulty communicating in Chinese, relied on instant noodles for sustenance. On Sundays she would eat them for breakfast, lunch, and dinner. After eating like this for a whole month, she began to lose much of her hair.

Many nutritionists have finally come round to telling the media that it is best not to eat too many instant noodles. The reasons are that they have a high salt content and can cause high blood pressure, they contain preservatives that may cause cancer. Also, some unscrupulous manufacturers make their noodles using waste cooking oil, and there are worries that eating this oil can lead to digestive tract disorders and other ailments.

As doctors are quick to point out, besides the tendency of fatty foods to oxidize and spoil, instant noodles also have a very low vitamin value. People who eat them too often can develop a vitamin deficiency.

Yet the fact that over the years such fears and doubts about instant noodles have not been allayed has not had a significant effect on instant noodle sales. The main reason is that people generally eat them as snacks rather than as a food staple.

Do instant noodles actually contain preservatives? Lu Yi-fa, professor of Nutrition and Food Sciences at Fu Jen Catholic University, explains that the reason instant noodles keep for half a year is that they are fried in oil and contain little water. Their long shelf life is not, as the general public suspects, due to preservatives.

Nonetheless, Lu Yi-fa reminds consumers that Taiwan's hot and humid climate is the great enemy of food preservation. Because instant noodles are fried in fat during manufacture, they can easily oxidize and produce an odd flavor. To prevent this, manufacturers often add an antioxidant to the noodles or the oil. Paste and sauces packed in aluminum bags are often sterilized at high temperatures. Instant noodle products must conform with a Department of Health regulation that stipulates an antioxidant content of less than 200 parts per million.

Wei Lih's Sichuan-style noodles with black bean sauce hold a big share of the market.

Changing the world?

Over the past 40 years, instant noodles have become East Asia's best-selling snack. Today, instant noodles are making a clean sweep of mainland China and are fast winning the hearts of 1.2 billion Chinese. In recent years the instant noodle craze and the market it supports have also spread beyond Asia to Mexico, Venezuela, Costa Rica, Brazil, and Puerto Rico.

As the global output of instant noodles rises daily, manufacturers all over the world are increasingly relying on Australian wheat. The raw materials market is huge. With a view to breaking into the instant-noodle market, in March of last year U.S. Wheat Associates conducted a study at the Asian Noodle Technology Development Center in Singapore on closing the gap between American farmers and Asian consumers. They invited experts from Taiwan, Thailand, Indonesia, Malaysia, and the Philippines to spend a week researching all sorts of American wheat varieties to determine which made the noodles with the color, quality, and taste best suited to Asian palates.

U.S. Wheat Associates also predicts that Asian instant noodles will "change the world's eating habits," replace Italian pasta, and become popular the world over. Perhaps, Taiwan's "all-out noodle war" will one day become a World Noodle War.