FEATURE
Accelerating Our Premium Strategy in NISSIN FOODS U.S.A.
The NISSIN FOODS Group's Mid- to Long-Term Growth Strategy 2030 outlines a plan to increase the proportion of core operating profits from overseas operations from 30% in 2020 to 45% by 2030. Here, we introduce our rapidly growing U.S. operations in FY 3/2023, which has emerged as the bona fide frontrunner of our overseas business.
Positioning in the U.S. Market
The U.S. Instant Noodle Market has Grown by Approximately 11% in 2022 Compared to 2019
The NISSIN FOODS Group is the leading company in the domestic Japanese instant noodle market and delivers its instant noodle products globally, with a focus on the Americas, China (including Hong Kong), Asia, and EMEA.
The bubble chart on the right shows the total demand for instant noodles worldwide. The vertical axis indicates the number of instant noodle meals consumed per person annually, while the horizontal axis represents the population of each region. The size of each bubble is calculated by multiplying the values of the vertical and horizontal axes, representing the total demand. While regions such as Asia (excluding India), including China, have already embraced the culture of consuming instant noodles on a regular basis, the Americas and EMEA have lower per capita annual consumption of instant noodles and, therefore, are considered to be regions where we can expect market expansion in the future.
In the U.S., triggered by a surge in at-home dining during the COVID-19 pandemic, the total demand in 2022 grew to a scale of 5 billion meals, achieving an increase of around 11% compared to 2019.
Global Demand for Instant Noodles & Our Strategy
Americas: U.S., Brazil, Mexico / Asia: Thailand, Vietnam, Singapore, Indonesia / EMEA (2022): UK, Germany, France, Spain, Italy, Switzerland, Finland, Netherlands, Denmark, Hungary, Sweden, Czech Republic, Poland, Serbia, Belgium / EMEA (2011): UK, Germany, France, Finland, Netherlands, Denmark, Hungary, Sweden, Czech Republic, Poland, Belgium
Trends in Instant Noodle Demand in the U.S.
Initiatives of NISSIN FOODS U.S.A.
Increased Demand and Differentiation Through Premium Strategy Bears Fruit Amid Inflation Following the COVID-19 Pandemic
In the U.S., under our “Innovative Premium” concept, we have been unveiling premium products that pursue new styles and tastes in the instant noodle segment. Along with a surge in at-home dining during the COVID-19 pandemic, FY 3/2023 saw the influence of inflation, which heightened the perception of instant noodles as a relatively affordable and delicious food option, leading to acceleration and stabilization in the overall demand for instant noodles.
The premium products launched by Nissin Foods USA in recent years have been performing well. The CUP NOODLES STIR FRY line that launched in FY 3/2020 brought unprecedented takeout quality to the table in the form of “soupless Asian dishes in a cup,” serving as a catalyst to accelerate our premium strategy. Under such initiatives, the proportion of premium products in our sales climbed from 29% in FY 3/2019 to 46% in FY 3/2023.
Trends for NISSIN FOODS U.S.A. (US$)
Proportion of Premium Composition for NISSIN FOODS U.S.A. (Based on Amount)
CUP NOODLES STIR FRY
Authentic, soupless Asian cup noodle dishes that are microwaveable and ready in minutes. Available in six flavors, including Teriyaki Beef and Korean BBQ, all tossed with high-quality vegetables like green beans and cabbage, all with no added MSG. These popular dishes offer the delicious taste of Asian noodles without the need to cook or order out.
Top Ramen Bowl
The Top Ramen you know and love, now in a bowl. Convenient for on-the-go, and with a microwave, you can enjoy Top Ramen anywhere, anytime. Each Top Ramen Bowl is stacked with veggies, including red bell peppers, green onions, corn, and carrots. Available in four flavors, these bowls come with a separate sauce not found in the classic Top Ramen, providing a new twist on an old classic.
HOT&SPICY FIRE WOK
We've added an extra kick to the rich flavor of HOT & SPICY noodles, crafting the spiciest, most flavorful ramen in NISSIN FOODS U.S.A. history. Each of the four flavors comes with a separate sauce, creating not just a spicy but a deep, savory experience. On our six-level spiciness scale, FIRE WOK flavors range from levels 4 to 6, offering an exhilarating level of heat.
CUP NOODLES STIR FRY RICE with NOODLES
CUP NOODLES isn't just noodles anymore! With the stirring success of the CUP NOODLES STIR FRY series, we have now created a new cup noodle sensation that brings together the texture of long-grain rice and bite-sized stir-fry noodles. All four flavors are topped with a variety of colorful vegetables, letting you savor the authentic Asian flavors you love.
Drivers of Our Solid Performance
Toward Establishing Competitive Advantage
In the U.S., a nearly 40% price revision was implemented throughout 2022 to address the issue of rising material costs and establish a sustainable supply structure through appropriate pricing. Coupled with the expansion of our premium product offerings, we have achieved a structural transition toward a more profitable framework.
One of the underpinnings of this is the brand power cultivated by the NISSIN FOODS Group. As the Group focuses on global expansion, we strive to uphold the core values of each brand while clarifying competitive advantages unique to each region and engaging in product development and marketing activities accordingly. The Group's innovative prowess, cultivated over decades, stands as a pivotal element of our competitive edge, robustly bolstering our global operations.
Our success in the U.S., amidst this rapidly shifting landscape, has hinged on translating the brand strength, marketing savvy, and product development skills we have honed in Japan to an international consumer base, coupled with crafting and executing finely-tuned production and sales strategies for each region.
MICHAEL PRICEPresident and CEO of NISSIN FOODS U.S.A.
The Innovative Edge to Drive Us Forward
When I assumed my position as President and CEO of NISSIN FOODS U.S.A. in 2018, the company's situation was quite gloomy—the many years of battling competition on price stressed the company in many ways. Our financial situation was challenged, we lost market share, we couldn't adequately invest in our infrastructure, and overall employee engagement was waning.
Fortunately, our brands, especially CUP NOODLES and Top Ramen, enjoy strong awareness and remain beloved by US consumers. Additionally, being the global leader in the instant ramen category, our R&D team is clearly the best in product development and innovation. Leveraging these assets and the tremendously talented and diverse group of local and expatriate employees, we had the framework to begin the process of rebuilding.
Working together as “ONE TEAM,” we defined a new mission that focused on building a business that concentrates on convenience, great taste, Asian-inspired flavor, and value. From that, we shifted our new business strategy away from battling our competition solely on price to engaging our consumers with delightful, delicious, and authentic meal solutions. Although our products sell at a slightly higher price, they still offer a great value. We defined this process as our “Premium Strategy.”
When we embarked on this strategy back in 2018, our ratio of “base” product sales to “premium” was 80:20. Now, after such successful product launches as CUP NOODLES STIR FRY and FIRE WOK, that ratio is nearly 50:50. This change has dramatically improved our financial situation, which allows us to grow our market share, invest in our infrastructure and employees: and most importantly ensure a long-term future for NISSIN FOODS U.S.A.
Toward Sustainable Growth
Propelling the Entire Market Forward with Our Premium Strategy to Become America's No. 1 Instant Noodle Brand
In the U.S., we are working to increase the demand for instant noodles while further bolstering our premium strategy. We anticipate the demand for instant noodles to continue growing and are set to launch operations at our third factory by 2025. As we boost production capacity and business efficiency, we are steadfast in our commitment to becoming America's number-one instant noodle brand.
