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October, 25, 2016

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Instant recovery eludes China's noodle makers

Emma Deng did something unusual on her recent Beijing-Shanghai five-hour high-speed train ride. Instead of snacking on a bowl of instant noodles, as was her wont, the frequent traveler unpacked lunch and beverages brought from KFC and Starbucks outlets at the Beijing South Railway Station.

"When you have choices of fresh food from restaurants, instant noodles become less attractive," she said.

Fast-food alternatives and health awareness have been dealing heavy blows to the instant noodles market in China, the world's largest.

Once the staple of train passengers and office staff working overtime, instant noodles are no longer having easy access to tummies in China.

According to the World Instant Noodles Association, consumption in the Chinese mainland and Hong Kong has declined from 42,470 million servings in 2011 to 40,430 million servings in 2015.

According to Mintel Group Ltd's report released in January, retail sales of instant noodles in China are estimated to have grown just 2.2 percent between 2010 and 2015, reaching 65.3 billion yuan ($9.7 billion) in 2015. Mintel expects a 1 percent drop in sales to 62.1 billion yuan by 2020.

Four noodle-makers-Tingyi Holdings, Uni-present, Baixiang and Jinmailang-command an 80 percent share of China's instant noodles market.

Leading brand MasterKong of Tingyi saw its net profit plunge nearly 65 percent year-on-year to $69.7 million in the first half of this year. Its second-quarter profit saw the sharpest drop in ten years, down nearly 14 percent year-on-year to $1.54 billion.

In the first six months of this year, instant noodles accounted for almost 37 percent of the group's revenue, 52 percent of market-wide sales and 43 percent of market share, according to Nielsen's statistics.

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A salesperson prepares a bowl of instant noodles at a food fair in Beijing in September. [Photo by Dafei/For China Daily]

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