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Globalization of instant noodles

Globalization of instant noodles
Wheat-based food is a popular, low-cost option during difficult economic times

Last year marked the 50th anniversary of the invention of the instant noodle and its introduction to the Japanese market. A second milestone in 2008 was the consumption around the world of more than 100 billion meals of the flavorful, inexpensive and convenient food, which requires only boiling water. From 2002 to 2007, there had already been an increase of 66% in production, according to data from the World Instant Noodle Association (WINA) in Japan. 

Thus, the product is one of a number of wheat-based foods whose globalization continues to stimulate international trade in the world’s top-ranked grain in terms of harvested area. 

The instant noodle, it could be argued, has been Japan’s main contribution to global cuisine, or at least to the diet of a wide variety of consumers, from students and office and construction workers to the children of harried mothers with no time to cook. Indeed, in a survey in 2000 the Japanese voted instant noodles as their country’s number one contribution to the world in the 20th century, ahead of karaoke, the compact disc player and other ubiquitous electronic gadgets. 

The product is now known under various names like top Ramen and Cup Noodles, and it is sold with a seemingly infinite variety of flavorings, noodle types and packaging. Production and sales are measured in individual servings or meals, which is simply one packaged piece of product typically weighing between 65 and 100 grams. 

Current trends suggest that the food category will continue to grow in popularity, particularly in rapidly developing and urbanizing countries like Indonesia, Vietnam, Brazil and Nigeria, where wheat is a non-traditional food, not to mention China, where wheat noodles have been consumed for 4,000 years. 

INDONESIA’S URBANIZATION 

In Indonesia, according to the USDA, a 50% share of annual imports exceeding 5 million tonnes of wheat and wheat flour goes to noodle production, of which instant noodles are the biggest segment. In 2007, consumption was 15 billion meals, up 38% from five years ago. Indonesia ranks as the number two producer in the world. 

Indofood is the country’s largest processed food company, and it dominates the market for instant noodles, upon which its success has been based. It operates two mega flour mills, including the P.T. Bogasari mill in Jakarta, which has a daily milling capacity of 12,000 tonnes, to supply wheat flour to a network of noodle plants spread through the archipelago nation. 

Indonesia was one of the first nonwheat growing countries where instant noodles have become an urban staple food. This was partly due to government support through subsidies of imported wheat to provide low-cost food for lower income groups in cities. 

Nigeria is a country that could duplicate Indonesia’s experience, though without wheat subsidies. Production began only in the late 1990s, but already 1 billion servings were sold in 2007 and demand is accelerating. The dominant producer is a joint venture between Indonesia’s Salim Group, owner of Indofood, and Tolaram Group of Singapore. 

CHINA NUMBER ONE 

Easily the number one market is China, which accounts for over half of global instant noodle demand and the lion’s share of growth. Consumption over five years increased 117% to 50 billion servings in 2007. Rapid urbanization and the change to fast-paced lifestyles have caused a switch in preference from traditional noodles to the easier-to-prepare variety. 

Instant noodles are at the vanguard of the entry of wheat-based foods into the diets of southern Chinese, where the traditional grain staple has always been rice. 

In China, annual sales of instant noodles are now put at $6.6 billion by industry analysts. Tingyi Corporation has grabbed a market share of over 44% with six large plants. It has used its success in instant noodle brands to diversify and build a branded food and beverage empire. Tingyi is a Hong Kong-listed company with majority ownership from Taiwan’s Ting Hsin, and a 30% minority share by Japan’s Sanyo Foods. 

The next two largest instant noodle producers in China are Nissin’s joint venture, with a 14% share, and another Taiwanese company, Uni-President, at 11%, bringing the top three to 70% overall. This is a high degree of concentration for a market which is expected to double again within four years to $13 billion. 

Vietnam is another country where all wheat is imported, but instant noodles have expanded at a breakneck pace. The market now exceeds 4 billion servings per year. The market leader is a joint venture between Japan’s Sanyo Foods, with its AceCook brand, and a stateowned Vietnamese food company. 

In the two countries where the instant noodle enjoyed its earliest success, Japan and Korea, the market has matured and overall demand growth has ceased. However, South Korea is still among the top two in per capita consumption at 64 servings per year, having lost its number one position in 2007 to Indonesia with 65. 

JAPAN’S SPECIAL ROLE 

In Japan, one of the top wheat importers at over 5 million tonnes per year, total consumption has held steady for several years at around 5.5 billion meals. However, as the birthplace of the instant noodle, the country still plays a special role. Production of all noodle and pasta types account for 28% of wheat use, and instant noodles represent 27% of that category. 

Hundreds of new instant noodle products are launched on the Japanese market every year, mainly based on new flavor variations, innovations in packaging, or the use of other grains like rice. 

Nissin Foods, whose founder, Momofuku Ando, invented the instant noodle a half century ago, enjoys a 40% to 50% market share in Japan. The number two player is Toyo Suisan with its Maruchan brand. 

Nissin Foods, a company whose entire history has been based on its founder’s invention, has pioneered the introduction of the instant noodle to many other countries. It is now a diversified food company with 25 plants in 10 countries, nearly 17,000 employees, and annual sales turnover of $3.2 billion. 

Not surprisingly, the focus of international expansion of the leading instant noodle companies is now the four large and rapidly growing economies known as the BRIC countries (Brazil, Russia, India and China). In January, Nissin announced its agreement to acquire a 33.5% share in the largest instant noodle producer in Russia for $298 million. Russia is the ninth-largest market for instant noodles. Nissin built a plant in Brazil in 1981 after first establishing a sales subsidiary in 1975. The market for its products continues to grow there. 

The greatest growth potential may be in India, where the market has nearly quadrupled in just five years to 1 billion meals. But with 1.1 billion people, that still amounts to less than one serving per person per year. 

The two main Japanese producers also dominate the U.S. market, which is the fourth largest and continues to expand. However, in contrast to Japan, the Maruchan brand is the market leader in the U.S. with a two-thirds share. Nissin Foods has almost all of the remaining third. 

Nissin introduced the novel food item into the U.S. market with exports before building its first U.S. plant in the early 1970s. Now each company has two plants, one on each coast. Competition has been fierce, as there were at one time at least eight manufacturers in the U.S. A third company is a niche player, Nongshim Ltd, featuring spicy Korean flavors. 

Maruchan also claims an 80% share of the Mexican market thanks to exports from its Los Angeles factory, which accounts for one quarter of total output, according to a company spokesperson. 

Insiders now report insufficient capacity in North America to meet expanding demand in recessionary times, particularly for the 3-ounce (85-gram) "pillow packs" that sell at retail for just 20¢ to 25¢ each. 

BARRIERS TO ENTRY 

Barriers to entry can be high, which helps to explain the domination of the global market by a handful of multinational companies. There are large capital costs associated with the production process, which involves both steaming and deep frying in palm oil prior to drying and packaging. Separate production lines are needed for top Ramen pillow packs, and Cup Noodles. The learning curve to achieve consistent product quality can be steep, adding to risk. 

Economies of scale are critical to competitiveness. The highest capacity production lines now churn out 1,200 meals per minute. The ability to negotiate low prices for consistent quality wheat flour and palm oil is also a key, since these two ingredients make up about 60% and 40% of the product by weight. 

Product development and advertising costs can also be prohibitive. Companies are constantly striving to introduce new flavors to stimulate demand. Flavor packets are developed for each country to match local palates. 

Packaging innovations are also critical in creating demand and getting an edge on rival products. The most revolutionary was the introduction in 1971 by Nissin of instant noodles sold in a styrofoam container, making possible a hot, ready-to-eat meal with practically no set-up, preparation or clean-up beyond a teapot to boil water. The product is distributed, cooked and eaten in the same container. 

Creating brand loyalty is a key success factor. Among certain consumer groups, instant noodle products have achieved nearly a cult following, as evidenced by the numerous websites and blogs devoted to discussion of the myriad brands and panoply of flavors. 

The major producers have been able to first gain footholds in promising markets through exports and local distribution supported by advertising to create brand recognition. Indofood first established its Indomie brand in Nigeria with exports, and then built a production plant. 

Instant noodles are well-suited to overseas shipments due to their very long shelf life, resistance to breakage, and light weight. For these reasons and because they are good for air drops, they are commonly used in disaster relief programs. 

Cheap and convenient, the instant noodle can provide budget relief to consumers in disastrous economic times as well. Some studies have shown sales to positively correlate with declines in GDP and rising unemployment in mature markets, as people forego more expensive foods. If this is so, the instant noodle would appear to have bright prospects for the foreseeable future in many countries.
 

Photos of Lady GaGas Third Leg

The rumors may possibly be true. Photos have been leaked which show Lady Gaga sporting not two but three legs.

7 tricks to Viral Web Marketing

Viral marketing (word-of-mouth marketing) is a really cool thing. Just think about it... instead of spending an insane amount of money on newspapers ads, TV commercials or banner ads, you spent nothing - and let your fans do all the work for you.

With viral marketing, your campaigns will suddenly get a life of its own - and start to spread like a virus. Everyone want to see it, and when they do, they all want to share it.

It is immensely powerful, usually having 500-1000 times greater impact than what you get from regular advertisements.

But how?

There are a lot of tricks to viral marketing. Here are 7 important ones:

1: Make people feel something

The most important trick of all is to create a very strong emotion. You need to have an opinion, to express an idea with commitment and dedication. You want people to:

• be filled with love or hate.
• be very happy or insanely angry
• be an idiot or a genius
• be deeply compassionate or an egoistic bitch

You want people's blood to be pumping of excitement.

Forget neutral, trying to please everyone, supporting several target groups or any of the many ways to be unbiased. Viral marketing is 100% about emotions.

2: Do something unexpected

This one explains itself. If you want people to notice you campaign, you have to do something different - something unexpected. Forget about trying to promote your products as just being great - everybody does that. Forget about trying to make it look cool - everyone else has "been there, done that".

Remember the bear being attacked by a man? That was unexpected - and it is one the most effective viral advertisements ever.

...and above all - never be a copycat.

3: Do not try to make advertisements (that sucks)

One of the biggest mistake companies make is when they think viral marketing is just advertisements that people share - it is not. Traditional marketing is about promoting your product, showing how good it is, giving it center stage - and generally being incredibly selfish (and possibly using supermodels or movie stars). But guess what, nobody cares about you!

Viral marketing is all about a good story. When BMW put out BMW Films, the main ingredient was not the cars, but the story. Replace the car with another one, and it would still be great. When Sony made their Bravia TV ads, the product was not even seen - yet everyone remembers it.

Forget about you, your product or your company. Focus exclusively in creating a good and interesting story. Sure, you can add you product into the mix, but it must not be the most important thing.

4: Make sequels

People have just seen your campaign. They think it was interesting, unexpected and their emotions has reached a high level - you have their complete attention.

Now what do you do?

If you do like most companies you will simply do nothing... and that is a big mistake. When you got people's attention you need to act, and one the best ways of doing that is to give them more - make sequels. This can be many things;

• It can be extra movies similar in concept to the first one - like BMW Films and Nissan did.
• It can be a behind the scenes look
• Bloopers
• A blog about the process (like Nissan did)
• Extra material, goodies etc.
• ...or all of the above

Never leave people standing with nothing.

BTW: Forget about countdown releases - i.e. releasing a new episode every 2 weeks. People's attention span does not last that long. Give them everything now!

5: Allow Sharing, downloading and embedding´

Sharing is what viral marketing is all about. Everything you do to make that easier is going to improve your campaign. That means that you need allow people to:

• Download the content, in a usable format (videos in MPG, pictures in JPG etc.)
• Allowing them to easily embed the content on their own sites (Note: remember bandwidth issues)
• Sending it to friends, either using a link or by sending the content directly.
• Publishing it on varies social networks - Digg, YouTube etc.
• Allow people to add it the bookmarking sites

Note: This also easily be overdone. You do not want to clutter up your page with a zillion "share me, dig this etc." icons.

6: Connect with comments

Another important element is to connect with your audience. Remember you got their attention, they are excited and now they want talk. Comments is one of the most effective ways to do this.

Keep in mind that the best viral marketing campaign is one that creates a strong emotion. This means some people will really like it - while others will get very angry. You have to accept both in your comments, and you have to welcome both opinions. But, at the same time you must prevent individuals to wage war against each other.

It is not a sin to delete comments from people who attack another person, or if the comment is off-topic. But, it is a sin to delete comments from people who just have an negative opinion.

And, most importantly. Connecting with people through comments means talking back. Do not add comments if you do not want to participate yourself.

7: Never restrict access!

Viral marketing is also about your campaign getting a life on its own - spreading like virus. In order to do that, in order to become "viral", it needs to be free.

Never add restrictions to the mix.

• Do not require people to register
• to become members
• to download special software
• to enter "unlock" codes
• ...or to do something in order to get the right link.

Viral marketing is never about exclusivity. It is about getting it out there for everyone to see.

---

There is a common message in all of these tricks. It is that you need to make it right - or not do it at all. Only the best viral marketing campaigns make it - the rest literally sucks.

If you have any tips of your own, I sure would like to know about them! Also, If would very like to see any cool viral advertisement that you might know.

Other cool "virals"

The Smirnoff viral

One of the first really successful viral campaigns in the "YouTube age"

Berlitz language

Not originally designed for viral, but stupid Germans and fridays quickly changed that

Some biscuit company

Again, not designed for viral, but the unexpected elements made people share it

Dove Evolution

A true viral campaign, showing artificial beauty - and it worked!

The Escalator

Another true viral campaign. worked too!

Copy Goes Here

A very funny movie by Coudal Partners, making fun of advertising companies.

BaekdalMONKEYS

A movie I made to promote my report on "Actual Browser Sizes". It was seen by about 800 people within the first few days - but with only limited viral effect.

.

HP FingerSkilz

Viral campaign from HP

VIA

Differentiating in increasingly undifferentiated markets

In the increasingly cluttered world of branded packaged goods it is quite common for brand managers to say in frustration that a category has become commoditised and that there is absolutely no possibility of creating a sustainable functional brand differentiator. 

But here are 2 examples which show that that need not be so. 

As we all know the starting point for functional differentiation is to offer some product attribute that meets a consumer need. However, to expect research to discover any substantial unmet needs nowadays is often too ambitious - in fact much research on cluttered categories comes to no other real conclusion than that all the consumer needs is a better product at a lower price. 

Hence it is more realistic to set out with the declared objective for your research to search for any insight on a new facet or extra dimension to a consumer need to help your brand stand apart.

To illustrate this, recent research conducted on the crowded toothpastes market revealed that consumers had no real unmet need - and that the only call from consumers was the old story that the benefit of brushing one's teeth should simply last longer.

More exploratory work on this theme led to the insight that consumers believed that toothpastes work best during the process of brushing and immediately afterwards - but that the benefit of the toothpaste vanishes immediately the user consumes the first morsel of food/drink thereafter.

This insight led to the creation of a "brush brush" audio mnemonic (i.e. the sound of brushing every time users in the ad opened their mouths ) that told the consumer that this toothpaste continues working for a full 12 hours regardless of whether the user is eating, drinking or sleeping. Evaluation of this as an ad concept revealed that consumers did indeed believe because of the "brush brush" mnemonic that the therapeutic effect of this brand of toothpaste continued working even after eating/drinking.

This produced one of the most memorable ad campaigns ever in the category - and subsequent brand tracking revealed high identification with this benefit, and an increased brand share.

Our second example comes from a category that you might expect would be an even greater challenge - the household insecticide market.

Advertising for mosquito coils typically talks of increased efficacy and lasting longer - and every brand in the market says the same things. However, a stray consumer comment in research, that smoke from the coil does not penetrate curtains (where mosquitoes are believed to hide) because the smoke loses its strength by the time it reaches the corners of the room, led to the development of an ad campaign that spoke about new properties in the smoke that took it to the furthest corners of the room and able to penetrate the thickest of curtains.

This attribute quickly became the acid test of efficacy for the category and single-minded communication on this property led to our brand being uniquely associated with it despite other brands trying to jump on the band wagon later.

Summing up :
• In many product categories these days all functional needs that were there to be discovered, have already been discovered

• Insights therefore are no longer so much about discovering new consumer needs...but about exploring well recognised needs to greater depths to uncover a hitherto unused facet or dimension.
This means:

• looking for a new dimension to the functional brand benefit

e.g. goes on working despite eating - as a new dimension to the works longer need;

e.g. penetrates curtains - as a new dimension to the efficacy need

• discovering an executional device like the "brush brush" mnemonic to express this new dimension of the brand benefit.

As seen by these 2 case studies the dimensions and the executional device were new - not the basic underlying consumer needs themselves.

When you have nothing new to say - as is the case in most cluttered branded packaged goods today - then say it differently. Scope for brand differentiation will rarely lie in addressing a new need, but more and more in presenting a solution to an old need from a new angle.

In other words in the world of brand differentiation today the 'How' has become more important than the 'What'.

Flyar | Augmented Reality Twitter Visualization Screensaver

Flyar is a screensaver, Twitter visualization application that uses Augmented Reality and gesture interaction. It enables users to see themselves in real time, inside a pc screen, surrounded by virtual birds that flutter about or fly towards them to deliver incoming tweets. Developed by YDreams. Get it at: http://ww2.ydreams.com/flyar/

Saugrippe.com::: Campaign against swine influenza.

Agency: barfuss.creative.group


A stunt campaign against swine influenca. With this promotion they pull attention to contagiosity at Oktoberfest.