A Multi-Faceted Exploration of China’s Decline in Instant Noodle Consumption by Tanya Rajabi

A Multi-Faceted Exploration of China’s Decline in Instant Noodle Consumption

Great speculation dominates the argument concerning exactly when in history and where in the world noodles were first introduced. Four thousand year old strings of noodles unearthed under an overturned bowl, however, eliminates any doubt as to the long withstanding preservation of the noodle in the Chinese diet.[i] Through thousands of years of serving as a staple ingredient in Chinese cuisine, the noodle has garnered endless unique varieties, methods of preparation, and uses with diverse meats and vegetables. One such variety of noodles that revolutionized the way noodles were consumed was the invention of the instant noodle in 1958. Momofuku Ando of Japan dehydrated steamed and seasoned noodles in oil heat to create the first instant noodles, and then established its industrial manufacturing. This product, which could be ready to consume in solely two minutes, quickly spread throughout Asia, Europe, and other parts of the world. Traditional, homemade noodles remain as the typical form of the dish consumed in rural areas. However, growing in popularity at the same time that China was beginning its rapid transformation into an industrialized state, the instant noodle practically served as fuel to propel the urbanization and sustenance to nourish the labor force driving the urbanization in large cities. If noodles are to be considered the staple of the Chinese diet, then it is only just to consider instant noodles as the staple of urban megacities like Beijing, Shanghai, and the likes. The unannounced need to hustle in all aspects of work and daily life, as well as limited time and money available to dedicate to cooking homemade dishes or enjoying meals at restaurants has placed instant noodles as the center of what advances individuals in urban centers. Furthermore, some might go beyond to claim that the dependence of urban dwellers on instant noodles is what drives the economy, society, and state of China as a whole. Today, China contains by far the largest instant noodle market in the world, with 38,970 million servings sold in 2017.[ii] Despite this statistic, China surprisingly has in recent years been experiencing a significant decline in the demand and dependence on instant noodles. Through this paper, it becomes evident that the fluctuations in the market for instant noodles can best be examined alongside the movement of rural migrant workers, changes in economic patterns, and the emergence of recent health trends in China.

Prior to the 1970s, China was primarily an agricultural economy, with approximately 82 percent of the country’s population residing in rural areas. However, reforms allowing private ownership of, or de-collectivizing, rural lands in the 1980s resulted in more efficient food production while consequently causing 240 million agricultural laborers to be in surplus. As a result, unemployed rural residents began traveling to cities in search of greater economic opportunities in factories, construction sites, and other forms of cheap labor.[iii] According to polls conducted in 2016 by the Ministry of Human Resources and Social Security, decades of urban migration have resulted in an estimated 282 million rural migrant workers, which constitute over twenty percent of China’s total population.[iv] These migrant workers represent one of the most marginalized sectors of the population, as they are generally forced to work long hours with low pay rates and unfavorable living conditions. The average monthly wage for migrant workers in 2017 stood at 3,485 yuan, or roughly 525 United States dollars, which is far from a comfortable living wage in urban settings like Beijing. Additionally, surveys conducted by the National bureau of Statistics revealed that the average migrant worker living in a medium-sized city in China owned solely 15.7 square meters of space, and over a third of workers did not own a fridge or any cooking technologies.[v] Due to the aforementioned difficulties facing migrant workers upon their arrival to cities, little money and time remain for them to purchase and cook the traditional, time-consuming Chinese meals they would enjoy back home with their families. Alternatively, noodles, which are a staple in a wide variety of dishes in the Chinese diet, are consumed in the form of instant noodles. The minimal cost, wide availability, and quick preparation time of instant noodle packets are favored by migrants and are suitable for their strenuous lifestyle. With the rapid annual increase in rural to urban immigration within the majority of the last forty years, the demand for instant noodles is believed to have had consequently increased by an annual rate of twenty percent in the beginning decades of its introduction.[vi] This great increase in demand for instant noodles was spearheaded by rural workers residing in cities, who are the largest consumers of instant noodles in China.[vii]

While rural migrants themselves suffer from low wages and harsh living conditions, their presence in factories and construction sites are responsible for the major industrialization and urbanization that Chinese cities have experienced in the second half of this century. However, the economic boom caused by rural to urban migration is slowing, and the migrants’ temporary stays in the cities of Beijing, Shanghai, and the likes are coming to an end as they begin returning to their hometowns.[viii] China is outgrowing its emphasis on manufacturing, construction, and other labor intensive jobs and has begun outsourcing these occupations to other countries in Southeast Asia. In their place, China now wants to focus on developing high-end technology and improving its service sector of the economy. Unfortunately, migrant workers do not have the skills and qualifications necessary to successfully work in these more advanced sectors of the economy, and as a result, millions of jobs have been lost. According to one rural migrant, “Today, it is harder to find a job and it is easier to lose one.”[ix]  However, these trends of unemployment have not gone unnoticed by the Chinese government. Rural provinces such as Guizhou have been encouraging migrant workers to return to their hometowns through incentives such as providing resources to start their own businesses, offering classes to gain greater skills in the workforce, and helping them find employment in their hometowns.[x] Due to the efforts of the government, as well as the unavailability of employment in urban locations, approximately 1.7 million fewer migrant workers resided in cities in 2015 than in 2014, indicating a migrant population decrease in China for the first time in thirty years. Similarly, between the years of 2010 and 2016, the growth in migrant workers significantly decelerated to 0.5 percent, in contrast to the previous migration rate of 5.2 percent.[xi] Migrants are willingly returning to their hometowns, and with these new entrepreneurs, China hopes to experience equivalent economic growth in its rural areas as well.

Occurring at the same time as the rather dramatic decrease in rural to urban migration has been the rapid decrease in sales of instant noodles. Data on instant noodle consumption in China has demonstrated that the number of packets of these convenient noodles sold have been unprecedently declining. In 2013, the sales of instant noodles in China exceeded 46.2 billion packets, which is equivalent to 1,465 packets of instant noodles consumed every second. It was recorded in 2016, however, that only 38.5 billion packets of instant noodles were sold, which is approximately a decrease in 8 billion packets over the course of three years. In terms of percentages, this difference in sales indicates a dramatic 17 percent drop in instant noodle consumption in China.[xii] Major instant noodle companies in China are currently suffering from the shrinking market size of instant noodles caused by the decrease in their demand. Tingyi Holding Corporation, which owns the popular instant noodle brand name Master Kong, reported in 2016 a revenue of 3.2 billion United States dollars, which was a 25.24 percent decrease from 2013’s revenue of 4.3 billion United States dollars. Similarly, another popular instant noodle brand in China, Uni-President, reported a 7.06 percent decrease in gross revenue and a net profit drop of 26 percent in 2016.[xiii] Instant noodle companies throughout China continue to struggle to keep their companies and brand names alive in the midst of the declining consumption of their products.

It is not merely a coincidence that the decline in instant noodle consumption in recent years is occurring simultaneously with the fluctuation in the rural and urban economies and migration patterns. As discussed previously, the slowing economy in urban locations and the spark in the economy of rural areas has resulted in the migration of rural workers back toward the countryside. This rural labor force was once greatly attracted to instant noodles due to their convenience, low cost, and availability. However, now that these migrants are being lured home with government incentives, they for the most part now have access to adequate cooking spaces and cheaper ingredients, longer periods of time dedicated to leisure, and are closer to families who can cook meals for them. Thus, the need for convenient, ready-made instant noodles is virtually eliminated once migrants return to their rural homes. Furthermore, more individuals in the labor force are choosing to remain in rural areas, where employment opportunities are increasing, rather than migrate to cities in search of work in the first place.[xiv] According to Zhang Xin, an economics professor at Tongji University, “far fewer low-paid migrants from rural China are moving to or living in cities, where they are one of the biggest consumers of instant noodles.”[xv] Therefore, as the number of rural migrant workers limited to impoverished living conditions in bustling cities are dwindling, the demand for quick, already-prepared meals like instant noodles continues to decrease as well in China.

As explored earlier, rural migrant workers in cities, alongside other Chinese residents in the lower economic class, are responsible for a great fraction of the instant noodle sales in China. However, individuals and families in the middle and upper classes are also regular consumers of instant noodles. The unlimited availability, quick preparation time, and portability of instant noodles tailors to the hectic, fast paced lifestyle experienced by residents living in the bustling urbanized areas of China, causing them to be in high demand even among the wealthy. However, Chinese citizens have begun taking interest in the recent upspring in health trends popular in the United States, such as limiting carbohydrate, sugar, salt, and gluten intake as well as emphasizing natural, fresh foods. According to Zhao Ping of the Academy of China Council for the Promotion of International trade, those following new fad diets “are more interested in life quality than just filling their bellies these days” and have deemed the original instant noodles as “junk food.” Seeking better alternatives to premade noodles with dehydrated vegetables and meats, customers have found delicious, high quality, and healthy noodles through food delivery companies.[xvi] Companies such as “Meituan Waimai” and “Ele.me” meet all of the requirements of convenience for busy urban residents. Mobile applications have been created to allow practically any dish to be ordered at customers’ fingertips and transportation methods have been arranged for rapid delivery to customers’ doorsteps.[xvii] Research conducted by the China Internet Network Information Center in 2016 reported that food delivery services had reached 295 million users, indicating a 41.6 percent increase in just one year.[xviii] As a result, the growing popularity and increased utilization of on-demand food delivery services by China’s growing middle class have made it difficult for longstanding instant noodle brands to prevent their sales from plummeting. In response, however, some companies are abandoning their outdated, “junk food” noodles and instead are taking measures to meet the demands of changing trends and fad diets in China. According to Alex Lo, president of Uni-President Enterprises, the instant noodle company is now focusing on high-end instant noodle products, which “[are] in line with the consumption upgrade in China.”[xix]

Whether the main reasoning behind the reduction in consumption of instant noodles is because of limited rural worker migration to China’s large cities, the desire for more nutritious and higher quality foods, or a culmination of both, it is without a doubt that movements in China’s economy and social tendencies have a direct impact on the state of the instant noodle.  However, noodles as a whole are so heavily engrained in the Chinese culture that these fluctuations in society have not had the power to eliminate noodles from the Chinese diet. Rather, the type and the way the noodles are prepared and served are simply transformed alongside the historical transformation of China itself. Noodles have served and will continue to serve as a manifestation of the preferences of the Chinese palate and the state of China as a whole.

 

[i] Roach, John. “4,000 Year Old Noodles Found in China.” National Geographic, National Geographic Society, 12 Oct. 2005, news.nationalgeographic.com/news/2005/10/1012_051012_chinese_noodles.html.

[ii] “Global Demand of Noodles.” History | World Instant Noodles Association., World Instant Noodles Association, 2018, instantnoodles.org/en/noodles/market.html.

[iii] Li, Shi. “The Economic Situation of Rural Migrant Workers in China.” China Perspectives, French Centre for Research on Contemporary China, 15 Dec. 2010, chinaperspectives.revues.org/5332.

[iv] Migrant. “282 Million Rural Migrant Workers in China.” GBTIMES, GBTIMES Beijing, 15 Mar. 2017, gbtimes.com/chinas-rural-migrant-workers-totals-282-million-2016.

[v] “Migrant Workers and Their Children.” China Labour Bulletin, China Labour Bulletin, 24 May 2018, www.clb.org.hk/content/migrant-workers-and-their-children.

[vi] Huocan, Lin. “Listed Instant-Noodle Manufacturers See Profit Declines in H1.” China Economic Net, Chine Economic Net, 12 Sept. 2013, en.ce.cn/Insight/201309/12/t20130912_1486469.shtml.

[vii] Atkinson, Simon. “Why Are China Instant Noodle Sales Going off the Boil?” BBC News, BBC, 20 Dec. 2017, www.bbc.com/news/business-42390058.

[viii] Liu, Coco. “Returning Migrants: the Chinese Economy’s next Great Hope.” South China Morning Post, South China Morning Post, 17 Mar. 2018, www.scmp.com/week-asia/business/article/2137034/returning-migrants-chinese-economys-next-great-hope.

[ix] Rasper, Anke. “World in Progress: Chinese Migrant Workers Return Home | DW | 25.01.2017.” DW.COM, Deutsche Welle, 25 Jan. 2017, www.dw.com/en/world-in-progress-chinese-migrant-workers-return-home/av-37269340.

[x] Reuters. “As China’s Economy Slows, Migrant Workers Head Home.” Fortune, Fortune, 10 Oct. 2016, fortune.com/2016/10/10/china-economy-migrant-workers/.

[xi] Chan, Tara Francis. “Falling Instant-Noodle Sales Points to the Economic Rise of Rural China.” Business Insider, Business Insider, 18 Dec. 2017, www.businessinsider.com/fewer-rural-migrants-moving-to-chinas-cities-2017-12.

[xii] “Sales of Instant Noodles Declining Fast in China.” The Straits Times, Singapore Press Holdings, 17 Dec. 2017, www.straitstimes.com/asia/east-asia/sales-of-instant-noodles-declining-fast-in-china.

[xiii] Zhuoqiong, Wang. “Instant Noodles Market Cools Off.” China Developing a Taste for the World’s Best Wine – EUROPE – Chinadaily.com.cn, 17 Aug. 2017, europe.chinadaily.com.cn/business/2017-08/17/content_30722149.htm.

[xiv] He, Laura. “China’s Growing Middle Class Lose Appetite for Instant Noodles.” South China Morning Post, South China Morning Post, 21 Aug. 2017, www.scmp.com/business/companies/article/2107540/chinas-growing-middle-class-lose-appetite-instant-noodles.

[xv] Chan, Tara Francis. “Falling Instant-Noodle Sales Points to the Economic Rise of Rural China.” Business Insider, Business Insider, 18 Dec. 2017, www.businessinsider.com/fewer-rural-migrants-moving-to-chinas-cities-2017-12.

[xvi] He, Laura. “China’s Growing Middle Class Lose Appetite for Instant Noodles.” South China Morning Post, South China Morning Post, 21 Aug. 2017, www.scmp.com/business/companies/article/2107540/chinas-growing-middle-class-lose-appetite-instant-noodles.

[xvii] Shi, Kaikai. “The 5 Most Popular Food Delivery Apps in China.” AllTechAsia, AllTechAsia, 9 Feb. 2018, alltechasia.com/5-popular-food-delivery-apps-china/.

[xviii] Liangyu. “China Focus: Sales of Instant Noodles Softening Fast in China.” XinhuaNet, XinhuaNews, 17 Dec. 2017, www.xinhuanet.com/english/2017-12/17/c_136832517.htm.

[xix] He, Laura. “China’s Growing Middle Class Lose Appetite for Instant Noodles.” South China Morning Post, South China Morning Post, 21 Aug. 2017, www.scmp.com/business/companies/article/2107540/chinas-growing-middle-class-lose-appetite-instant-noodles.

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