Japan's Noodle King Faces Increasing Competition as Foreign Brands Strengthen Their Presence

Recently, it was reported that Nissin Foods, a major Japanese food company, pressured retailers to raise the prices of its instant noodles due to increased raw material costs. This action has prompted a warning from the Japan Fair Trade Commission (JFTC). Nissin demanded that retailers increase the prices of its five products, including its popular brand, Cup Noodles, by approximately 5% to 13%. This practice takes away price competition, one of the differentiation strategies of retailers, which is a violation of the Anti-Monopoly Act.

Figure 1. Nissin Cup Noodles

Nissin's actions seem to be driven by the dominance of domestic brands in the Japanese instant noodle market, which leaves consumers with few alternatives. According to the Korea Agro-Fisheries & Food Trade Corporation (aT), domestic brands comprise about 65% of Japan's instant noodle market. For Nissin, which holds a 46.8% share of the Japanese cup noodle market, the lack of significant competition further consolidates its market position.

However, the landscape is gradually changing. According to the Ministry of Agriculture, Forestry and Fisheries of Japan (MAFF), Japan's instant noodle production has been steadily declining, from 422,000 tons in 2019 to 368,000 tons in 2023. It is speculated that this is because the price of Japanese instant noodles has been steadily rising, while consumer incomes have not. In contrast, foreign brand imports have been increasing. In the first quarter of 2024, the sales in Japan of three major Korean instant noodle companies—Nongshim, Samyang, and OTOKI—rose by 8.9%, 13.5%, and 7.7%, respectively, amounting to KRW 24.8 billion, KRW 4.2 billion, and KRW 7 billion.

Figure 2. Instant Noodle Production in Japan

It is not just Korean products that are expanding their presence in the Japanese market. According to Tridge Transaction Data Services (TDS), the export value of three major Vietnamese instant noodle companies—Acecook, Bich Chi Food, and Masan Consumer—had increased by 71.3%, 30.9%, and 26.1%, respectively, in Aug-24 compared to the total export value in 2022.

Figure 3. Export Value of Three Major Vietnamese Instant Noodle Companies to Japan (HS Code: 190230)

In the case of Acecook, Hao Hao Spicy and Sour Shrimp Noodles and Pho Noodles were the most exported to Japan. Bich Chi Food mainly exported rice noodle products like Pho cake (a type of wider rice noodles) and noodle soup. Masan Consumer exported various instant noodles under its brand Omachi, which are mostly traditional instant noodle products rather than rice noodles. Overall, while Vietnamese companies exported products like rice noodles such as pho, wheat noodle products such as Hao Hao were exported in greater quantities.

Figure 4. Products of Three Major Vietnamese Instant Noodle Companies

Conclusion

Leading Korean instant noodle manufacturers, such as Nongshim, Samyang Ramen, and OTOKI, are gradually penetrating the Japanese market. Similarly, Vietnamese instant noodle companies are rapidly gaining traction in the Japanese instant noodle market. Cross-referencing various data sources, including Tridge TDS, reveals that the Japanese instant noodle market is experiencing a decline in local production while seeing a rise in imports of foreign brands. This suggests a shift from market dominance by local manufacturers to an increasing share held by foreign brands. Given Japan's position as the fifth-largest consumer of instant noodles worldwide, targeting the Japanese market with instant noodle products from countries such as Korea, Vietnam, and India appears advantageous.