The two-car train chugs out of Master Kong's Dream Exploration Park in eastern China, filled with children giddy from shooting cartoon cabbages to dunk in animated pots of instant noodles. Next stop: A factory churning out 4,000 packets of the real thing every minute.
They may not inspire the same levels of awe as Shanghai Disneyland, but the noodle-themed playground and nearby assembly lines are propelling Tingyi Holding Corp. into its own world of tomorrow.
The owner of the Master Kong brand makes half the 3.4 million tons of instant noodles eaten annually in China, yet revenue is stagnating as middle-class consumers abandon the salty, fatty cups for healthier options. Tingyi is on a mission to reinvent the humble noodle, pouring millions of dollars into customer education, food science, Olympic Games sponsorships and "Kung Fu Panda" movie shorts to convince diners the cheap meal can be part of their gastronomic aspirations.
China's packaged-food market, valued at $226 billion by Euromonitor International Plc, is helping forge domestic companies that rival some of the world's biggest food giants, from state behemoth Cofco Corp. to dairy company Inner Mongolia Yili Industrial Group Co. and meat producer WH Group Ltd. But swaying Chinese taste buds may be easier than swaying hearts and minds. In a nation where even eggs and milk can be deadly fakes, consumers have become cynical about home-grown food and are willing to pay a premium for foreign brands they assume contain better ingredients and had to pass tougher safety checks.
The opportunity to charge premium rates and the shortage of domestic supply for products is pushing companies like WH Group and Bright Dairy & Food Co. to look abroad for ammunition to help them keep their noodles, pork and yogurt in kitchen cabinets and on refrigerator shelves.
Chinese companies have announced more than 80 overseas deals valued at about $12 billion in the food industry since 2009.
The biggest deal was in 2013, when WH Group acquired Virginia-based Smithfield Foods Inc., the world's largest pork producer, for $6.95 billion. Smithfield owns Armour salami, Smithfield bacon and Eckrich sausages, among others.
Chinese per-capita consumption is 39.4 kilograms a year, and domestic hog farms can't keep up with demand. U.S. pork exports to China and Hong Kong totaled 545,000 metric tons last year, a 61% increase from 2015, according to the U.S. Meat Export Federation.
Smithfield can't export sausage, ham and bacon from its U.S. factories because China prohibits imports of processed meat. So WH Group opened an 800 million-yuan factory in Zhengzhou that will produce 30,000 metric tons of those meats when it reaches full capacity next year.
Master Kong and his competitors seek to stem a 12% decline in China's total instant-noodle sales since 2013 to 82 billion yuan, with a further drop to 62 billion yuan forecast by 2021, according to London-based Euromonitor.
Tingyi's sales declined 23% from 2013 to 2016, and instant-noodle sales fell 10% last year to $3.24 billion from a year earlier, according to data compiled by Bloomberg. Sales of products including mid-end packets and snack noodles plunged 39% in the first quarter of 2017, compared with a year earlier, the company said May 22.
Sales of Master Kong brand instant noodles declined from 2013 to 2016 as consumers sought healthier alternatives.
The two-car train chugs out of Master Kong's Dream Exploration Park in eastern China, filled with children giddy from shooting cartoon cabbages to dunk in animated pots of instant noodles. Next stop: A factory churning out 4,000 packets of the real thing every minute.
The owner of the Master Kong brand makes half the 3.4 million tons of instant noodles eaten annually in China, yet revenue is stagnating as middle-class consumers abandon the salty, fatty cups for healthier options. Tingyi is on a mission to reinvent the humble noodle, pouring millions of dollars into customer education, food science, Olympic Games sponsorships and "Kung Fu Panda" movie shorts to convince diners the cheap meal can be part of their gastronomic aspirations.
