The Two Instant Noodle Giants Continued To Increase In Beverage In The First Half Of The Year

? ? ? Recently, uni President China (00220. HK) and Master Kong Holdings (00322. HK) have issued semi annual reports.

Among them, in the first half of the year, uni president achieved 13.07 billion yuan of revenue, a year-on-year increase of 10.1%; The gross profit increased by 7.3% to 4.533 billion yuan, but the gross profit rate decreased by 1 percentage point to 34.8%; The profit attributable to equity holders during the period was 847 million yuan, down 20.4% year on year; The basic profit per share was 19.62 points.

Over the same period, Master Kang recorded a revenue of 35.396 billion yuan, a year-on-year increase of 7.47%; The gross profit rate was slightly lower than that of the unified accounting for 31.05%, which was 2.38% lower than that in the first half of 2020; The profit attributable to shareholders was 2.035 billion yuan, down 14.5% year on year.

It is worth mentioning that although the two major instant noodle enterprises have achieved revenue growth in the first half of the year, their gross profit margins have declined to varying degrees“ The global epidemic trend of new crown pneumonia has not been effectively curbed. " Tongyi attributed the decline in gross profit rate to the continuous rise in the prices of bulk raw materials.

Master Kang also mentioned the rise in raw material prices in the financial report. The company believes that in the post epidemic era, consumers' health awareness has been improved, "with the control of the epidemic, outdoor consumption has gradually recovered, and home consumption habits have also continued. The diversification of consumption scenarios, the development of o2o model and community group buying mode bring new challenges and opportunities to the group. "

Instant noodle sales decline

According to Nielsen data, in the first half of 2021, the overall sales volume of instant noodle industry declined by 7.7% year-on-year, and the sales volume declined by 7.3% year-on-year. Affected by the high base last year, the alleviation of the epidemic situation this year and the return to normal consumer demand, the two instant noodle giants have declined in this business.

According to the financial report, in the first half of the year, the revenue of uni president instant noodle business was 4.398 billion yuan, down nearly 600 million yuan compared with the same period in 2020, accounting for 93.36% of the company's food business income and 33.81% of the total revenue. However, the group's self heating food "small stove" continued to be affirmed by the market, and the first half of 2021 showed double-digit high-speed growth.

In the first half of the year, Master Kang's instant noodle business recorded a revenue of 12.722 billion yuan, down 14.67% year-on-year. During the period, the gross profit rate of Master Kang instant noodles decreased by 6.46 percentage points to 23.89% year-on-year due to the rise of raw material prices and the change of combination. Due to the year-on-year decline in revenue and gross profit margin, the company's shareholders' share of profits in the first half of the whole instant noodle business declined by 47.13% to 896 million yuan.

In the past, instant noodles were considered as emergency food, and most of them were used on trains and high-speed railways. AI media consulting believes that the extension of consumption scenarios will stimulate the development of convenient food industry, and health will become one of the important trends in the development of fast food in the future.

In recent years, with the upgrading of consumption and the enhancement of consumers' health awareness, cheap instant noodles characterized by high salt and high oil have met the ceiling. As early as a few years ago, uni president and Master Kang began to actively layout the medium and high-end market. Through its sub brands, Tongyi focuses on different consumption scenarios and groups, such as "Zhonghua cuisine" as the selling point, the "Jiwei restaurant" for the high-end bag cooked noodles market, and the "Manhan big meal" targeting the new white-collar workers.

Master Kang is not willing to be outdone. He has comprehensively arranged various scenes such as office, family and outdoor, and launched "Express Express Express noodle restaurant" series of bowl noodles, boiled noodles and self heating noodles. In addition, the brand of plain noodles was launched for students to cater to the trend of leisure staple food. In addition to the two giants, jinmailang has also entered the middle and high-end market through "Laofan's fast-food noodle restaurant", but its price is far lower than that of Master Kang and Tongyi's high-end instant noodles.

AI media consulting believes that the development of fast food industry is bound to be accompanied by industrial upgrading and industry segmentation. Enterprises will speed up product innovation, and at the same time, it will carry out differentiated segmentation for target groups to meet diversified needs.

Uni President China believes that health, safety and characteristics are the trend of food innovation and development in the future. Innovative products in the new era not only have outstanding appearance and excellent quality, but also need to be more safe and nutritious. Master Kang adheres to the strategy of multi price and gradually strengthens the layout of high-end products to meet the diversified needs of consumers with multiple tastes and specifications.

Double digit growth in beverages

According to the unified financial report, the beverage business income during the reporting period was 7.86 billion yuan, up 24.95% year-on-year. Specifically, tea drinks, juice and milk tea all maintained double-digit high-speed growth, with growth rates of 20.2%, 40.5% and 25.4% respectively, of which the income of tea beverage was 3.482 billion yuan, accounting for 44.3% of the total income of beverage business.

During the period, the expenditure on sales and marketing increased to $3.133 billion, up 19.4% compared with the same period last year. This was mainly due to the increase in operating costs of the group's investment in brand and channel expansion and construction, and the increase in beverage revenue compared with the same period last year, resulting in an increase in transportation costs.

In the first half of the year, Master Kang's beverage business achieved revenue of 22.276 billion yuan, up 26.45% year-on-year. Due to the decrease of sales growth and sales expense rate, the profit margin attributable to shareholders increased by 41.04% in the reporting period.

Judging from the data alone, the business volume of Master Kang beverage is almost three times that of the unified one. According to Nielsen data, in the first half of the year, the overall sales volume of Master Kang beverage industry increased by 15.7% year-on-year, and the sales volume increased by 17.6% year-on-year. During the period, Master Kang's instant tea (including milk tea) accounted for 42.1% of the market, ranking first in the market; Fruit juice sales accounted for 17.5%, ranking second in the market; The sales of packaged water and ready to drink coffee accounted for 6.2% and 12.1% respectively. According to the third-party survey data, PepsiCo carbonated beverage sales accounted for 33.2% of the total market, ranking second.

Master Kang, which has the right to distribute Pepsi carbonated drinks in China, will not be able to shake its position in the Chinese beverage market in the near future. However, with the continuous improvement of consumers' health concern, generation Z has gradually become the main force of beverage consumption, and the demand of carbonated beverage market has gradually declined, showing a new trend of refinement and personalization.

According to the data from e-commerce platform and COFCO nutrition and Health Research Institute, among the new carbonated drinks in recent five years, the proportion of new products of beverages under 200ml in the new beverage products is on the rise, and even in 2020, the proportion will reach 27%.

Industry insiders analyzed to reporters that, on the one hand, "mini cans" products conform to the single economy and "one person eating" economy, which can reduce waste. On the other hand, small capacity packaged drinks can also satisfy consumers' taste psychology and give consumers the impression of "convenience, material benefits and environmental protection".

Uni President China said that in the future, it will continue to comply with the new consumption trend, actively expand the taste of products, promote the diversification of specifications, etc., such as the launch of joint brand products with 330ml bottle body. The company believes that the small bottle can not only meet the aesthetic preference of consumers for "cute fashion", but also meet the needs of the new generation of young people for lightweight consumption and healthy lifestyle.

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