Why rising noodle prices are a signal of fragility in the economy. Photo / 123RF
OPINION
If the entire (cooked) length of instant noodles sold around the world in a single year were laid out in a line, the resulting 6.2 billion kilometre giga-noodle would stretch well beyond Pluto and into the depths of space. It is a fact as miserable as it is marvellous.
Instant noodles sit among the most potent weapons ever devised in the unending struggle against starvation: a product that towers, among processed foods, at the extreme value end of the cost-per-calorie scale and which its makers now proudly classify as a piece of “social infrastructure”.
They are a portable, resilient and long-lasting store of nourishment in times of need — from dire to impulsive and all points between. There is a reason that instant noodles have replaced cigarettes as the primary currency of the informal economy in dismally catered US prisons. This ready-to-eat grub, pioneered in the late 1950s to feed a ruined Japan in the protracted aftermath of war, takes the prize for being cheap and fast, but delicious.
And yet, precisely because of those qualities, the rising demand for instant noodles can look a lot like a societal and economic red flag — a signal, especially in developed countries, that something has broken or is at least under severe strain. They are an index of the primacy of need over greed in straitened times.
On one hand, if you can suspend judgment on the health risks associated with high-salt, ultra-processed foods, as most instant noodles are, there is something to celebrate in the relentless en-noodlement of the global diet. Particularly so for two Japanese companies, Toyo Suisan and Nissin Foods (whose founder invented the product), which have significant positions in a global market that analysts estimate to be worth north of US$54 billion ($88.5b).
In 2022, according to the World Instant Noodles Association, humanity collectively bought a record 121 billion servings of instant noodles — some 17 per cent more than in 2018. In countries as diverse as Nigeria, Bangladesh and Turkey, the surge has been far more acute, with increases ranging from 53 per cent to 425 per cent. That represents instant noodles doing their thing: rising from the shelves to provide affordable and durable calories to inflation-hit masses.
The pandemic, with its lockdowns, disruption of food supply and the need for habitual non-cooks to feed themselves, was responsible for driving a good part of the 2020-2021 growth. But noodle consumption, as the sales figures and share prices of the Japanese duopoly testify, has continued to grow strongly in a post-Covid world.
Where the red flags start waving, though, is among consumers in richer countries where — in a term chillingly used by Japan’s instant noodle makers — households have been pulled into a global cycle of “food product down-trading”. By the end of 2022, both the US and UK consumption of instant noodles had risen 14 per cent over five years. Japan, having entered an era of inflation after decades of deflation, now eats more of them than it did in 2018, even though its population is smaller.
The empowerment of instant noodles as the favourite currency in US jails points (albeit in extreme terms) to the increasing gaps that the food is called upon to fill. In his 2022 book Orange Collar Labor, the academic Michael Gibson-Light uses the testimonies of inmates and staff to describe a prison system that, in part because of financial incentives for private operators to cut costs, no longer provides enough food to sustain an adult. The instant noodles, in this environment, become critical units of survival. Much like cash, says Gibson-Light, a single noodle packet can store value for some time, act as a standardised unit of account and be easily exchanged for services and goods between buyers and sellers.
Outside prison, though, noodles are showing their strength in adversity. According to analysts who cover the noodle-makers, the pattern of buying has shifted revealingly in America’s sub-US$1-per packet market. Here, where Toyo and Nissin command about 70 and 30 per cent shares respectively, they ensure that, even when prices do go up, they maintain a cheapness relative to other benchmarks such as tinned soup.
US households have become increasingly sensitive to food-price rises and, in many cases as a matter of survival, are meeting calorie deficits with instant noodles. They buy in bulk — either from Amazon or from wholesalers like Costco — to take advantage of noodles’ resilience: unlike most other food, they can be bought today as a hedge against the risk that even noodle prices keep rising.
The en-noodlement of the world is not, says a Nissin spokesman, a temporary boom. That is not great cause for joy. For all the resilience of the product, its rise is a signal of fragility.
Written by: Leo Lewis
© Financial Times