Over the past five years, instant noodles have made great strides in shedding the association of cheap college food or exotic products from Asia toward a food available in many different (and increasingly sophisticated) flavors, as well as a kitchen staple. which can be used in a wide range of dishes.
Founded in Japan in 1971, Nissin Foods (NFPDF) – Get a free reportOwned by Cup Noodles, Cup Noodles is one of the oldest ramen brands available on the US market, but it has been gaining a lot of attention lately thanks to its unconventional flavors, such as breakfast pancakes, noodles of egg and maple syrup or the super spicy Hot & Spicy FIRE WOK Packages promoted with the help of the New York City Fire Department.
Related: Honest Review: I Tried Pumpkin Spice Cup Noodles
Sean Silk, chief marketing officer at Nissin, spoke to TheStreet about the unique business challenges of continuing a well-established and beloved brand while experimenting in new directions. The interview has been edited for length and clarity.
'Ramen is the fastest growing area within soup itself…'
TheStreet: How is instant ramen selling right now? Did you experience an increase in sales during and after the pandemic (instant noodle market is projected to grow from $54.6 billion in 2022 to $81.84 billion in 2029)?
The ramen category itself grew during Covid because a lot of people were at home eating and stuff like that. The impressive thing is that it continues to grow. It has continued to grow even as prices and inflation have left their mark on the brands themselves. So the price of a package of ramen is still under 50 cents, which is very, very affordable, but it's still more expensive than it was 10 years ago. And really what's happening is that from a unit and volume perspective, the ramen category continues to grow.
It used to be a small segment within the store, but ramen is now the fastest growing area within soup. If we take the entire soup category and look at it between ramen and the rest of the wet soups or premium soups or bagged soups or anything else like that, ramen has really outperformed the rest of the category. From our point of view, we believe that retailers should give more space to ramen because that is where the consumer really votes. They are voting with their feet and buying more ramen than ever.
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Over the past decade, many new instant noodle brands have hit the U.S. market. Do you see this as a business competition or is it good for greater product recognition?
Silk: Both, I think. There are certainly customers who will say, “Hey, I want to try this different new company,” and that generates some interest. But I would say that Nissin is doing very well in this environment and the way we see it is that (the competition) is creating more interest in ramen, not less. The more people who are interested in ramen, the better for us because we honestly believe that we are going to win in that scenario based on the quality of the products, the value that they offer and the different ways that we offer it.
There is also a growing niche interest in very spicy products and brands competing on how much “spiciness” they can contain. Is this something you've observed in Nissin?
I think what you're pointing out is that there are a lot of spicy options in what we would call the multicultural set of stores. FIRE WOK is one of those brands that we are bringing to what we would call the general ramen audience. Spicy noodles are very popular in Vietnam, many Asian markets and as an international brand we have obviously done a lot of business in Vietnam and Japan and places where spicy noodles are a big market. What we've done is apply that technology to what we're doing with FIRE WOK right now; the chili is infused into the noodles, the spiciness is not provided by different packages. It is in the product itself.
“We want everyone to eat ramen in as many ways as possible”
Do you expect instant noodles as a category to move further away from its initial reputation as cheap college food in the coming years? What else awaits us in 2024?
The category began as instant lunch in pillow-like packages. From the 1970s to the 2000s, that's pretty much what's in the ramen category. Nissin identified this and said, “We're not going to win this game, so we want to bring new ideas and new technology to the ramen category.” It's rare that you see a manufacturer launch a successful format like a pillow pack and then introduce it into a bowl or tray or other different packaging formats. And now we will also launch spicy products and increase that scale.
So we're really trying to bring more ideas more creatively to more people in different ways and customers have the opportunity to go from ramen that's 33 cents a pack to something that's more cost-effective and varied. What we want to do is get everyone eating ramen in as many ways as possible and as often as possible, so we have to present it in different ways and give people different reasons and occasions to bring it into their homes.
