the tide of rising food prices finally drowned instant noodles.
Recently, it is reported on the Internet that the prices of Master Kang, uni president and Riqing food, the leading enterprises of instant noodles, are about to rise.
On February 16, uni president told the reporter of the international finance news that the current price rise is only the news circulating in the market, and the company will continue to observe the market dynamics.
Riqing food related people said that the price increase is true, but it is not possible to disclose which products have increased in price and how much.
Master Kang said that he did receive the price increase notice. At present, there are three products involved in price increase, namely classic barrel noodles, classic bag noodles and mini barrels. The final price is subject to the actual price of each platform. When asked why supermarkets have promotional activities instead, the customer service staff said that the company does not have promotional activities at present, perhaps because the local supermarket is promoting the products on schedule.
the leader took the lead in raising the price
On January 5 this year, Riqing enterprises took the lead in announcing that they would increase the ex factory prices of their main instant noodles products in China, including Hewei cup noodles, qianyiding (packaging, cup and bowl noodles), Riqing pasta, La Wang, etc.
Up to now, Master Kang and Riqing food have not disclosed specific information such as the price increase.
In early February, Bank of America Securities released a research report that the retail price of instant noodles in the mainland rose in January. The ex factory price of Master Kang’s main instant noodles products rose by more than 10% after the lunar new year. After the replacement of new packaging, the retail price of unified main instant noodles also increased by about 12%.
Bank of America Securities also believes that the unified ex factory price may also be raised later, marking the first significant price increase in the instant noodle industry in nearly 10 years.
Bank of America Securities also said that the price increase will help reduce the pressure on gross profit margin and improve the competition pattern of instant noodle industry.
According to Zhu danpeng, an analyst of China’s food industry, at present, China’s instant noodle industry is still in a low-level cycle stage, and the price rise can provide consumers with better products and better service system. on the whole, the price increase is benign, and the increase of 10% is also within a reasonable range, which will not affect the sales volume.
rising cost pressure
The price rise of leading enterprises of instant noodles is related to the pressure on costs caused by the continuous rise of raw materials.
The main raw materials of instant noodles are flour, palm oil, sugar, etc. The prices of these materials increased in varying degrees last year, among which the price of palm oil increased significantly, according to the statistics of FAO, the price of palm oil and other vegetable oil increased by 65.8% year-on-year in 2021.
In an interview with the media, Liu Jin, senior analyst of green Dahua futures, said that palm oil and flour accounted for 18% and 30% of the cost of instant noodles. Since the beginning of last year, the cost of these two raw materials has increased greatly, while other raw materials of instant noodles, such as chili powder and starch, have also increased to varying degrees.
Or affected by this, the performance of instant noodle enterprises is under pressure.
According to the financial report of Master Kang, in the first half of 2021, the revenue of its instant noodle business segment was 12.722 billion yuan, a year-on-year decrease of 14.67%, of which container noodles and high price bag noodles decreased by 12.5% and 22.8% respectively, instant noodle profit also decreased to 896 million yuan from 1.69 billion yuan in the same period of last year, a decrease of 47.1%
Uni president also encountered a similar situation. In the first half of 2021, its instant noodle business revenue was about 4.4 billion yuan, down 15.5% from 5.21 billion yuan in the same period in 2020.
The profit of Nissin food also declined. In the first half of 2021, its revenue was HK $1.854 billion, a year-on-year increase of 6.8%; However, the profit attributable to the owners of the company was 171 million yuan, a year-on-year decrease of 4.2%; in the first half of the year, the gross profit margin fell from 33.9% to 31.9%, and the net profit margin fell from 10.3% to 9.2%.
price rise or continuous
Not only instant noodle manufacturers, in fact, since the end of last year, affected by the rise in raw material prices, some rice noodle related food companies have also announced price increases.
The price will be raised by {123567} and {123566} at the beginning of 2021 {123707} and {123567} respectively.
On November 13, Chen Ke Ming Food Manufacturing Co.Ltd(002661) announced that in view of the continuous rise in the costs of flour, packaging materials and transportation, the company will raise the prices of various series of products from December 1, 2021.
On November 18, Sanquan Food Co.Ltd(002216) issued an announcement to reduce the promotion policy of some quick-frozen rice flour products and quick-frozen surimi products or increase the distribution price, with a price adjustment range of 3% – 10%.
On December 1, Zhengzhou Qianweiyangchu Food Co.Ltd(001215) also announced price increases ranging from 2% to 10%.
For the duration of the price rise in the food industry, Zhu danpeng said that it mainly depends on the development of the world epidemic. Perhaps the price rise will not only last until the end of this year, but also last longer.
