Noodles in the Philippines

7/23/2019 Noodles in the Philippines

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NOODLES IN THE PHILIPPINES

Euromonitor International

February 2015


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N O O D L E S I N T H E P H I L I P P I N E S P a s s p o r t I

E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1

Trends ......................................................... ................................................................. ................ 1Competitive Landscape ..................................................... ........................................................... 2Prospects ..................................................................................................................... ................ 3Category Data ........................................................ ................................................................. ..... 3

Table 1 Sales of Noodles by Category: Volume 2009-2014 ...................................... 3Table 2 Sales of Noodles by Category: Value 2009-2014 ......................................... 3Table 3 Sales of Noodles by Category: % Volume Growth 2009-2014 ..................... 4Table 4 Sales of Noodles by Category: % Value Growth 2009-2014 ........................ 4Table 5 Sales of Instant Noodles by Leading Flavours: Rankings 2009-2014 .......... 4Table 6 NBO Company Shares of Noodles: % Value 2010-2014 ............................. 5Table 7 LBN Brand Shares of Noodles: % Value 2011-2014 .................................... 5Table 8 Distribution of Noodles by Format: % Value 2009-2014 ............................... 5

Table 9 Forecast Sales of Noodles by Category: Volume 2014-2019 ....................... 6Table 10 Forecast Sales of Noodles by Category: Value 2014-2019 .......................... 6Table 11 Forecast Sales of Noodles by Category: % Volume Growth 2014-

2019 ............................................................. ................................................ 7Table 12 Forecast Sales of Noodles by Category: % Value Growth 2014-2019 ......... 7


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N O O D L E S I N T H E P H I L I P P I N E S P a s s p o r t 1


NOODLES IN THE PHILIPPINES

HEADLINES Total volume sales of noodles grow by 5% in 2014 and current value sales by 8% to PHP27.2

billion

Increasing variations in flavour are seen in noodles in 2014

Snack noodles sees the highest retail volume growth in 2014 at 8%, but with minimal actual

increase

Unit prices of noodles continue to see a slow rise alongside increasing product and flavour

variety

Monde Nissin Corp and its Lucky Me brand retain the lead in noodles in 2014

Retail volume growth is expected in noodles at a 4% CAGR during the forecast period

TRENDS

In 2014, sales of noodles in the Philippines continued to grow in volume and value terms.

Increasingly penetrating noodles in the Philippines are Asian-inspired speciality flavours, not

just from the Philippines but from neighbouring Asian countries too. Aside from the product

offering of local brands being seen as expanding in terms of flavour offerings, imported

noodles are also gaining more consumer awareness.

Continuing at 5%, total volume growth seen in noodles in 2014 was marginally slower than

the CAGR growth of the review period. This may be because of the continued view of

categories such as cups/bowl and pouch instant noodles as lower-priced food options, and,

with the improving Philippine economy, Filipinos are more able to buy higher-priced

alternative food products. Growing awareness of the health and wellness trend may also have

negatively affected growth of noodles, which consumers continue to associate with health

hazards, as noodles are not a fresh but a processed food product.

The fastest retail volume growth in 2014 continued to be in snack noodles. This may be

attributed to the relative maturity of other types of noodles, while snack noodles remains

young and unexplored, with very limited numbers of players and available brands. Despite

displaying the fastest volume growth, low actual volumes showed only a minimal actual

increase.

The average unit price of noodles increased by 3% in 2014. Noodle manufacturers needed to

regulate their price increases, especially for instant noodles as these are products primarily

patronised for their low prices. Increasing the price by too much may lose customers from the

mass market base.

The ranking of popular instant noodle flavours remained relatively stable and unchanged overthe review period. At the top spot remains soy sauce & calamansi (the local lime), followed by

chicken in second place and beef in third. Soy sauce & calamansi is the preferred flavour for

pouch instant noodles. These flavours have continued to occupy the top positions and it has

yet to be seen if the evolving number of available flavours of instant noodles will change the

rankings.

Many Asian-inspired flavours have appeared in noodles in the Philippines. Notable new

flavours which have been launched include the Philippine-inspired line of Pancit ni Mang

Juan, taking flavours of local dishes and infusing them into pouch instant noodles.


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Unpackaged noodles remain popular especially in wet markets in the Philippines where they

are weighed and bought. In particular, plain noodles continue to be sold thus, especially with

the benefit of lower prices and the consumers ability to buy them in smaller quantities,

sometimes for use just on the same day.

For instant noodles, distribution remained relatively unchanged over the review period. Beingan easy-to-store product for sale, instant noodles can be found everywhere from large retail

distribution outlets to independent small grocers and convenience stores.

COMPETITIVE LANDSCAPE

Monde Nissin Corp retained its dominance in noodles in the Philippines with a 60% retail

value share in 2014, particularly because of its strong position in instant noodles. The

established brand name as well as continuous flavour innovations have worked for this

company and allowed it to maintain its lead. This same company also saw the biggest

increase in actual value sales in 2014.

The strategy implemented by companies in the review period of introducing larger pack sizes

in instant noodles seems not to be picking up with all players. Aside from other players

possibly not having the economies of scale for this, it is also possible that this strategy has not

gained massive support from consumers either.

What appears to be more successful is the continued introduction of Asian speciality flavours

into noodle product lines. With the continuously growing interest in flavours from Asian

neighbours, these flavours are appearing not just in noodles but also in other packaged food

products in the Philippines.

As well as flavours from outside the country, those from inside the Philippines are also

interesting. A key product launch of the review period was Pancit ni Mang Juan by Universal

Robina Corp. The infusion of Filipino favourites into instant noodles has succeeded in the

country. This may have benefited as well from noodles actually taken as a meal by lower-

income consumers, where the flavour of a full meal may be an attractive selling point for thesecustomers.

While local competition heavily dominates instant noodles in the Philippines, an advantage of

international brands and manufacturers is that they compete instead in terms of the products

they bring in, such as cup noodles imported from Asian neighbours. While local

manufacturers also try to infuse their products with Asian flavour variations, imported brands

bring in instant noodles from countries like Korea. This goes alongside the continued

fascination of Filipinos by their exposure to Korean and Japanese culture through television

shows and music.

Generally, instant noodles in the Philippines is dominated by economy brands which compete

for sales based not just on price but also on flavour. Premium brands, on the other hand,

consist mainly of imports, which battle for value share mostly on the basis of the authentic

flavours they bring in, straight from the country the flavours come from.

The only significant packaging innovation observed over the review period continued to be the

offering of instant noodles in larger pack sizes, supposedly offering better value for money.

This has yet to pick up and succeed in the Philippines. This aside, no other packaging

innovation has been observed.


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PROSPECTS

Noodles will continue to succeed in the Philippines with positive growth prospects over the

forecast period. Not just a snack but also a low-cost meal alternative for lower-income

consumers, noodles will continue to enjoy the patronage of these consumers as long as price

levels are maintained and any increase is controlled and not too drastic. The increase in value growth will be seen to slowly decline over the forecast period, despite

maintaining positive growth rates and increasing actual value sales of noodles in the

Philippines. This may be attributed to increasing purchasing power as a result of the improved

economy, whereby consumers will have the abili ty to purchase higher-priced meal

alternatives. Another factor is the maturity of noodles, where the question also is whether

much more can be done with the large presence of variants and flavours.

Instant noodles is expected to show a better performance than noodles overall throughout the

forecast period. This may be attributed to the continued convenience of this product and,

especially with the increasingly busy lifestyles of Filipinos, this is expected to remain as a

quick food option.

Unit prices of noodles are expected to decline at -1% CAGR in constant terms over the

forecast period. Manufacturers are likely to make an effort to control any increases so as not

to lose the largely mass market consumer base.

Distribution is not expected to change over the forecast period as noodles are widely

distributed in various distribution outlets nationwide in the Philippines.

Companies can be expected to continue to try different innovations in noodles, and not just in

terms of flavours or packaging, so as to keep figures growing. Measures will be put in place to

keep prices low. While Pancit ni Mang Juan, launched in the review period, is far from failing,

volume sales remain negligible and innovations that will change the course of noodles in the

Philippines have yet to be seen.

CATEGORY DATA

Table 1 Sales of Noodles by Category: Volume 2009-2014

tonnes2009 2010 2011 2012 2013 2014

Chilled Noodles - - - - - -Frozen Noodles - - - - - -Instant Noodles 149,924.8 158,755.1 168,902.3 178,946.6 188,958.2 198,247.0- Cups/Bowl Instant 8,262.7 8,593.2 8,979.9 9,428.8 9,947.4 10,643.8

Noodles- Pouch Instant Noodles 141,662.2 150,161.9 159,922.4 169,517.7 179,010.7 187,603.3Plain Noodles 18,700.8 19,542.4 20,324.1 21,035.4 21,666.5 22,208.2Snack Noodles 110.5 122.6 136.7 149.7 162.3 174.6Noodles 168,736.1 178,420.1 189,363.1 200,131.8 210,787.0 220,629.8

Source: Euromonitor International from official statistics, trade associations, trade press, company research,store checks, trade interviews, trade sources

Table 2 Sales of Noodles by Category: Value 2009-2014

PHP million2009 2010 2011 2012 2013 2014


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Noodles

- Pouch Instant Noodles 14,955.0 16,001.9 17,202.0 18,406.2 19,676.2 21,210.9Plain Noodles 1,619.2 1,675.8 1,751.2 1,838.8 1,941.8 2,069.9Snack Noodles 13.7 15.2 18.1 19.9 21.7 23.7Noodles 19,299.8 20,567.6 22,061.6 23,602.4 25,204.1 27,211.2


Table 3 Sales of Noodles by Category: % Volume Growth 2009-2014

% volume growth2013/14 2009-14 CAGR 2009/14 Total

Chilled Noodles - - -Frozen Noodles - - -Instant Noodles 4.9 5.7 32.2- Cups/Bowl Instant Noodles 7.0 5.2 28.8- Pouch Instant Noodles 4.8 5.8 32.4Plain Noodles 2.5 3.5 18.8Snack Noodles 7.6 9.6 58.1Noodles 4.7 5.5 30.8


Table 4 Sales of Noodles by Category: % Value Growth 2009-2014

% current value growth2013/14 2009-14 CAGR 2009/14 Total



Table 5 Sales of Instant Noodles by Leading Flavours: Rankings 2009-2014

ranking2009 2010 2011 2012 2013 2014

Soy Sauce & Calamansi 1 1 1 1 1 1Chicken 2 2 2 2 2 2Beef 3 3 3 3 3 3Seafood 5 4 4 4 4 4Chili 4 5 5 5 5 5


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Table 6 NBO Company Shares of Noodles: % Value 2010-2014

% retail value rspCompany 2010 2011 2012 2013 2014

Monde Nissin Corp 58.7 59.3 59.7 59.9 59.9Universal Robina Corp 16.9 16.8 18.2 18.5 18.6Nissin-Universal Robina 5.5 5.5 5.4 5.4 5.5

CorpZest-O Corp 4.3 3.9 2.3 2.0 1.9SM Retail Inc 0.4 0.4 0.4 0.4 0.4Indofood Sukses Makmur 0.2 0.2 0.2 0.2 0.2

Tbk PTNestl Philippines Inc 0.4 0.4 - - -Supervalue Inc - - - - -

Others 13.6 13.6 13.7 13.6 13.5Total 100.0 100.0 100.0 100.0 100.0


Table 7 LBN Brand Shares of Noodles: % Value 2011-2014

% retail value rspBrand Company 2011 2012 2013 2014

Lucky Me Monde Nissin Corp 59.3 59.7 59.9 59.9Payless Universal Robina Corp 16.8 18.2 18.5 18.6Nissin Nissin-Universal Robina 5.5 5.4 5.4 5.5

CorpQuick Chow Zest-O Corp 2.3 2.3 2.0 1.9SM Bonus SM Retail Inc 0.4 0.4 0.4 0.4Indomie Indofood Sukses Makmur 0.2 0.2 0.2 0.2

Tbk PTTekki Zest-O Corp 1.6 - - -Maggi Nestl Philippines Inc 0.4 - - -SM Bonus Supervalue Inc - - - -Others 13.6 13.7 13.6 13.5Total 100.0 100.0 100.0 100.0


Table 8 Distribution of Noodles by Format: % Value 2009-2014

% retail value rsp2009 2010 2011 2012 2013 2014

Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0- Grocery Retailers 100.0 100.0 100.0 100.0 100.0 100.0-- Modern Grocery 45.7 45.8 46.0 46.3 46.9 47.3

Retailers--- Convenience Stores 2.0 2.0 2.1 2.2 2.2 2.3--- Discounters - - - - - ---- Forecourt Retailers 0.2 0.2 0.2 0.2 0.2 0.2


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--- Hypermarkets 4.4 4.9 5.3 5.5 5.8 5.9--- Supermarkets 39.1 38.7 38.4 38.5 38.7 38.9-- Traditional Grocery 54.3 54.2 54.0 53.7 53.1 52.7

Retailers--- Food/drink/tobacco - - - - - -

specialists--- Independent Small 12.5 12.0 11.0 11.0 10.5 10.2

Grocers--- Other Grocery 41.8 42.2 43.0 42.7 42.6 42.5

Retailers- Non-Grocery Retailers - - - - - --- Health and Beauty - - - - - -

Retailers-- Mixed Retailers - - - - - --- Other Non-Grocery - - - - - -

RetailersNon-Store Retailing - - - - - -- Vending - - - - - -- Homeshopping - - - - - -- Internet Retailing - - - - - -- Direct Selling - - - - - -Total 100.0 100.0 100.0 100.0 100.0 100.0


Table 9 Forecast Sales of Noodles by Category: Volume 2014-2019

tonnes2014 2015 2016 2017 2018 2019

Chilled Noodles - - - - - -Frozen Noodles - - - - - -

Instant Noodles 198,247.0 207,245.3 215,805.1 224,666.8 233,889.9 243,530.2- Cups/Bowl Instant 10,643.8 11,417.8 12,259.6 13,102.7 13,957.1 14,845.2


Source: Euromonitor International from trade associations, trade press, company research, trade interviews,trade sources

Table 10 Forecast Sales of Noodles by Category: Value 2014-2019

PHP million2014 2015 2016 2017 2018 2019




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Table 11 Forecast Sales of Noodles by Category: % Volume Growth 2014-2019

% volume growth2014/15 2014-19 CAGR 2014/19 Total



Table 12 Forecast Sales of Noodles by Category: % Value Growth 2014-2019

% constant value growth2014/2015 2014-19 CAGR 2014/19 TOTAL

Chilled Noodles - - -Frozen Noodles - - -Instant Noodles 3.1 3.2 17.3- Cups/Bowl Instant Noodles 5.3 5.5 30.7- Pouch Instant Noodles 2.7 2.8 14.8Plain Noodles 1.7 1.7 8.9Snack Noodles 3.3 3.7 20.2

Noodles 3.0 3.1 16.6


Documents

Noodles in the Philippines