Instant noodle maker Tingyi faces headwinds as mainlanders opt for healthier choices
Instant noodle sales in China have slipped over the past year, leaving some analysts pessimistic on the fortunes for Tingyi
Food delivery services and a growing move towards healthy eating may be good for the well-being of urban Chinese, but it could be hurting the mainland’s instant noodle industry.
Chinese food and beverage maker Tingyi has been on a downwards spiral for the past year, with its core business - instant noodles - in hot water.
Third quarter sales for Tingyi, one of the leading producers of instant noodles, beverages and convenience foods in China, showed instant noodle sales slipping 8.75 per cent in the third quarter year on year, and high-end pack noodles slipping 18 per cent.
But bottled tea and water sales rose 3.55 per cent thanks in part to unseasonably hot weather, helping to narrow the decline in net profit to 1 per cent.
Unfortunately for Tingyi, which sells many of its products under the Master Kong brand, Chinese consumers appear to be losing their taste for instant noodles, with sales volumes slipping 12.5 per cent in 2015 on year, according to a report from consultancy Bain & Company.
Rawen Huang, founder and portfolio manager at Petrel Capital, said the growth in online delivery services were having a big impact on instant foods companies, including Tingyi.