Noodles in the Philippines

NOODLES IN THE PHILIPPINES Euromonitor International February 2015

NOODLES IN THE PHILIPPINES

LIST OF CONTENTS AND TABLES Headlines ..................................................................................................................................... 1 Trends ......................................................... ................................................................. ................ 1 Competitive Landscape ..................................................... ........................................................... 2 Prospects ..................................................................................................................... ................ 3 Category Data ........................................................ ................................................................. ..... 3 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12

Sales of Noodles by Category: Volume 2009-2014 ...................................... 3 Sales of Noodles by Category: Value 2009-2014 ......................................... 3 Sales of Noodles by Category: % Volume Growth 2009 -2014 ..................... 4 Sales of Noodles by Category: % Value Growth 2009-2014 ........................ 4 Sales of Instant Noodles by Leading Flavours: Rankings 2009-2014 .......... 4 NBO Company Shares of Noodles: % Value 2010-2014 ............................. 5 LBN Brand Shares of Noodles: % Value 2011 -2014 .................................... 5 Distribution of Noodles by Format: % Value 2009-2014 ............................... 5 Forecast Sales of Noodles by Category: Volume 2014-2019 ....................... 6 Forecast Sales of Noodles by Category: Value 2014-2019 .......................... 6 Forecast Sales of Noodles by Category: % Volume Growth 20142019 ............................................................. ................................................ 7 Forecast Sales of Noodles by Category: % Value Growth 2014 -2019 ......... 7

© Euromonitor International

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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 

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Increasing variations in flavour are seen in noodles i n 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

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

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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. 

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Continuing at 5%, total volume growth seen i n 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 relati ve maturity of other types of noodles, while snack noodles remains young and unexplored, with very limited numbers of players and a vailable brands. Despite displaying the fastest volume growth, low actual volumes showed only a minimal actual increase. The average unit price of n oodles increased by 3% in 2014. Noodle man ufacturers needed to regulate their price increases, especially for instant noodles as these are products primarily patronised for their low prices. Increasing the price b y too much may lose customers from the mass market base. The ranking of popular instant noodle flavours remained relatively stable and unchanged over the 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 Phili ppine-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 consumer’s ability to buy them in smaller quantities, sometimes for use just on the same da y. For instant noodles, distribution remained relatively unchanged over the review period. Being an 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. 

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The strategy implemented by companies in the review period of introducing larger pack sizes in instant noodles seems not to b e 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 a s a meal by lowerincome consumers, where the flavour of a full meal may be an attractive selling point for these customers. 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 f rom 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. 

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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 de cline 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 n ot 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, i s 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

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Chilled Noodles Frozen Noodles Instant Noodles - Cups/Bowl Instant Noodles - Pouch Instant Noodles Plain Noodles Snack Noodles Noodles Source:

2009

2010

2011

2012

2013

2014

149,924.8 8,262.7

158,755.1 8,593.2

168,902.3 8,979.9

178,946.6 9,428.8

188,958.2 9,947.4

198,247.0 10,643.8

141,662.2 18,700.8 110.5 168,736.1

150,161.9 19,542.4 122.6 178,420.1

159,922.4 20,324.1 136.7 189,363.1

169,517.7 21,035.4 149.7 200,131.8

179,010.7 21,666.5 162.3 210,787.0

187,603.3 22,208.2 174.6 220,629.8

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 million 2009


2010

2011

2012

2013

2014

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17,667.0 2,711.9

18,876.6 2,874.7

20,292.3 3,090.3

21,743.7 3,337.5

23,240.6 3,564.4

25,117.6 3,906.6

14,955.0 1,619.2 13.7 19,299.8

16,001.9 1,675.8 15.2 20,567.6

17,202.0 1,751.2 18.1 22,061.6

18,406.2 1,838.8 19.9 23,602.4

19,676.2 1,941.8 21.7 25,204.1

21,210.9 2,069.9 23.7 27,211.2


Table 3

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

% volume growth


Table 4

2013/14

2009-14 CAGR

2009/14 Total

4.9 7.0 4.8 2.5 7.6 4.7

5.7 5.2 5.8 3.5 9.6 5.5

32.2 28.8 32.4 18.8 58.1 30.8


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

% current value growth


Table 5

2013/14

2009-14 CAGR

2009/14 Total

8.1 9.6 7.8 6.6 9.4 8.0

7.3 7.6 7.2 5.0 11.7 7.1

42.2 44.1 41.8 27.8 73.7 41.0


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

ranking

Soy Sauce & Calamansi Chicken Beef Seafood Chili


2009

2010

2011

2012

2013

2014

1 2 3 5 4

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

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Source:

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Table 6

NBO Company Shares of Noodles: % Value 2010-2014

% retail value rsp Company Monde Nissin Corp Universal Robina Corp Nissin-Universal Robina Corp Zest-O Corp SM Retail Inc Indofood Sukses Makmur Tbk PT Nestlé Philippines Inc Supervalue Inc Others Total Source:

2011

2012

2013

2014

58.7 16.9 5.5

59.3 16.8 5.5

59.7 18.2 5.4

59.9 18.5 5.4

59.9 18.6 5.5

4.3 0.4 0.2

3.9 0.4 0.2

2.3 0.4 0.2

2.0 0.4 0.2

1.9 0.4 0.2

0.4 13.6 100.0

0.4 13.6 100.0

13.7 100.0

13.6 100.0

13.5 100.0


Table 7

LBN Brand Shares of Noodles: % Value 2011-2014

% retail value rsp Brand Lucky Me Payless Nissin Quick Chow SM Bonus Indomie Tekki Maggi SM Bonus Others Total Source:

2010

Company

2011

2012

2013

2014

Monde Nissin Corp Universal Robina Corp Nissin-Universal Robina Corp Zest-O Corp SM Retail Inc Indofood Sukses Makmur Tbk PT Zest-O Corp Nestlé Philippines Inc Supervalue Inc

59.3 16.8 5.5

59.7 18.2 5.4

59.9 18.5 5.4

59.9 18.6 5.5

2.3 0.4 0.2

2.3 0.4 0.2

2.0 0.4 0.2

1.9 0.4 0.2

1.6 0.4 13.6 100.0

13.7 100.0

13.6 100.0

13.5 100.0


Table 8

Distribution of Noodles by Format: % Value 2009-2014

% retail value rsp

Store-Based Retailing - Grocery Retailers -- Modern Grocery Retailers --- Convenience Stores --- Discounters --- Forecourt Retailers


2009

2010

2011

2012

2013

2014

100.0 100.0 45.7

100.0 100.0 45.8

100.0 100.0 46.0

100.0 100.0 46.3

100.0 100.0 46.9

100.0 100.0 47.3

2.0 0.2

2.0 0.2

2.1 0.2

2.2 0.2

2.2 0.2

2.3 0.2

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--- Hypermarkets --- Supermarkets -- Traditional Grocery Retailers --- Food/drink/tobacco specialists --- Independent Small Grocers --- Other Grocery Retailers - Non-Grocery Retailers -- Health and Beauty Retailers -- Mixed Retailers -- Other Non-Grocery Retailers Non-Store Retailing - Vending - Homeshopping - Internet Retailing - Direct Selling Total Source:

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4.4 39.1 54.3

4.9 38.7 54.2

5.3 38.4 54.0

5.5 38.5 53.7

5.8 38.7 53.1

5.9 38.9 52.7

-

-

-

-

-

-

12.5

12.0

11.0

11.0

10.5

10.2

41.8

42.2

43.0

42.7

42.6

42.5

-

-

-

-

-

-

-

-

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0


Table 9

Forecast Sales of Noodles by Category: Volume 2014-2019

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2014

2015

2016

2017

2018

2019

198,247.0 10,643.8

207,245.3 11,417.8

215,805.1 12,259.6

224,666.8 13,102.7

233,889.9 13,957.1

243,530.2 14,845.2

187,603.3 22,208.2 174.6 220,629.8

195,827.5 22,708.5 187.0 230,140.8

203,545.4 23,150.6 199.1 239,154.7

211,564.1 23,641.1 211.4 248,519.3

219,932.8 24,177.7 223.9 258,291.5

228,685.0 24,761.0 236.8 268,527.9

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 million

Chilled Noodles Frozen Noodles Instant Noodles - Cups/Bowl Instant Noodles - Pouch Instant Noodles Plain Noodles Snack Noodles Noodles


2014

2015

2016

2017

2018

2019

25,117.6 3,906.6

26,006.8 4,120.5

26,848.9 4,362.4

27,708.3 4,605.6

28,566.8 4,850.7

29,457.0 5,106.0

21,210.9 2,069.9 23.7 27,211.2

21,886.3 2,110.3 24.8 28,142.0

22,486.5 2,145.1 25.7 29,019.7

23,102.7 2,179.8 26.7 29,914.8

23,716.0 2,216.2 27.6 30,810.6

24,351.0 2,254.2 28.5 31,739.7

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Source:

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Table 11

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

% volume growth


Table 12

2014/15

2014-19 CAGR

2014/19 Total

4.1 6.4 4.0 2.4 5.7 4.0

4.2 6.9 4.0 2.2 6.3 4.0

22.8 39.5 21.9 11.5 35.6 21.7


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

% constant value growth


2014/2015

2014-19 CAGR

2014/19 TOTAL

3.1 5.3 2.7 1.7 3.3 3.0

3.2 5.5 2.8 1.7 3.7 3.1

17.3 30.7 14.8 8.9 20.2 16.6



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Noodles in the Philippines

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