Apr 13, 2020 (Nikkei) - Nissin Foods Holdings' Cup Noodles products are catching on as an emergency food, as people are told to stay home to slow the spread of the new coronavirus.
Many of those who dig in to Cup Noodles during disasters are eating the instant noodles for the first time in many years. The Japanese food processor aims to win new fans in the U.S., a growing source of profit in recent years.
In March, around 7.19 million cup-type instant noodle packages were sold at supermarkets in Japan, a 13% gain from a year earlier, according to data collected by Nikkei POS. The top-selling product was Nissin's 78 gram, standard size Cup Noodles. There is no data on overseas sales, but "demand is strong," a company representative said.
Nissin's April-December operating profit rose 2% from a year earlier to 35.5 billion yen ($325.8 million), based on international accounting standards. About 80% of that came from Japan, and roughly the same proportion came from its instant noodle business.
But strong sales growth is unlikely in Japan, given the country's aging, shrinking population. While the U.S. accounts for about 10% of the company's profit, that share has risen significantly since the late 2010s, after Nissin altered its strategy there. In addition to its three-for-$1 value packs, the company began focusing on premium products priced at more than $1 each.
While the Cup Noodles brand is well-known in the U.S., Nissin has been under pressure to cut prices due to fierce competition. The company views the U.S., with its multiethnic population, as an important arena. If it can win the fight for market share there, it believes it will have the upper hand in other parts of the world.
In the premium segment, last year Nissin released Cup Noodles Stir Fry, a microwaveable, take-out-style product. While most people in Japan make their instant noodles by adding boiling water to them, many Americans add the water first and cook the noodles in the microwave. Cup Noodles Stir Fry was developed with such differences in mind.
U.S. retail giant Walmart has begun selling the Japanese-style pan-fried noodle product at its 2,800 stores across the country. Nissin is trying to raise premium products to between 40% and 50% of sales, up from around 30% at present, by introducing items priced above $2.
