Taiwan’s instant noodle market
For several years, Taiwan’s instant noodle sales suffered from the aftermath of food safety incidents, as well as the intense competition from the growing availability of other ready meal products, but things are starting take a turn for the better since 2016. According to Kantar Worldpanel, Taiwan’s FMCG market started to regain growth momentum (+2.9% YoY growth) from 1H 2016, and the instant noodles market is also achieving an impressive double digit growth, and its buyer base recovering up to 90% compared to the market’s peak year. The reason for instant noodles returning growth can be attributed to the underlying need for convenience food which still remained for Taiwanese consumers, and the market is also further stimulated by introduction of new products, including wider international brand selections and upscale,healthier choices.
International boom! ‘Korean Oni, Oba’ leading the growth trend
While local brands suffered, the food safety incidents provided the imported brands with a window of opportunity instead, and the Korean products are gaining the most benefit. Korea had been one of the growing tourist spot for Taiwanese in recent years, and the popularity of ‘Korean Craze’ is clearly reflected in the sales of related products, which also included instant noodles. Kantar Worldpanel’s 2016 Q3 data showed that one third of Taiwan’s top 10 selling instant noodles brands are Korean, including SHIN ramyun, OTTOGI Cheese ramen, Paldo Gomtang, and Ginseng chicken soup noodles, all intensely popular with the Taiwanese consumers. While the growing sales of Korean brands is no doubt contributed by the success of Korean TV dramas, support from retail channels and their active promotion strategies are also to commend, which includes various in-store promotions and set up of imported brand section, all helping stimulate the Taiwanese consumers in trying out international products.
Quick cooking noodle: healthier way to dine on the Nation’s favourite food
Consumer’s growing awareness for healthier dining is another driving force behind the market’s come back, and this is reflected by the uplifting sales of the quick cooking noodles products. Compare to traditional instant noodles, quick cooking noodles is viewed as the healthier alternative, hence driving its sales in 2016 by an impressive 15%. Interestingly, more than 50% of the quick cooking noodles sales came from upscale products; Kantar Worldpanel observed that other than increase in the buying population, consumer’s average sales consumption also grew by 8% YoY, which expanded the total instant noodles market sales by TWD$300 million. Not just the quick cooking noodles, the traditional instant noodles are also trending towards pricier products, reflecting consumers’s shift in preference for more tasty products, and growing willingness to pay more dollars for health and quality.
Function matters, so does brand communication
Take Taiwan Tobacco and Liquor Corporation’s Hua Diao chicken noodles for example, the black horse of the instant noodles market, with its clever utilisation of hunger marketing and limited edition, lead the product line to double its buyer base within just three years. Another success story, local veteran Vedan’s new brand ‘Zhenmientang’, communicated a simple yet effective ‘anyone can make it taste good’ slogan, attracted more than 400 thousand buyers in the first half of 2016 alone. In contrary, long time market leader Uni-President, despite the success of its short films at Cairns film festival, was not able to turn it into hard sales for its product lines. With Uni-President’s numerous instant noodles brands, it is vital for the company to consider how they can continue inspire consumers to choose their brand, without cannibalizing each other.
In conclusion, from studying the instant noodles market, it is clear that Taiwanese consumers dining habit had drastically changed since the eruption of food safety incidents. Even instant noodles are no longer just something that is purchased out of convenience, health and quality are also factors that needs to be taken into account, this is something for all manufacturers in the ready meal market to think about.