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Instant Noodles in Thai Market

Preeyanuch Manomathaya
538 56237 29
M.A. in Labor Economics and Human Resource Management
Chulalongkorn University
July 2010

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Instant Noodles in Thai Market

July 2010

ABSTRACT
Instant noodles are one of the essential food products in Thai market. The food was consumed
by Thais from every socioeconomic level and become popular in both urban and rural area. The demand
for instant noodles has been at the high level ever since it was firstly launched over 30 years ago as well
as its sales which have consistently expanded through times. Instant noodles are also widely called in
Thai MaMa after the strongest brand in Thai market. Some people have even claimed that the products
sales record is a unique economic indicator of Thailand so called MaMa Index. The report aims to
demonstrate the picture of Thai instant noodles market in term of price, competition and marketing as
the same time analyze if the product can truly be one of the countrys economics indicators.
Keywords: Instant Noodles, Thailand economic indicator, Food products, Market competition

Preeyanuch Manomathaya
July 2010
Chulalongkorn University
Bangkok, Thailand

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Instant Noodles in Thai Market

Preeyanuch Manomathaya
Chulalongkorn University
July 2010

Abstract
Instant noodles are one of the essential food products in Thai market. The food was consumed
by Thais from every socioeconomic level and become popular in both urban and rural area. The demand
for instant noodles has been at the high level ever since it was firstly launched over 30 years ago as well
as its sales which have consistently expanded through times. Instant noodles are also widely called in
Thai MaMa after the strongest brand in Thai market. Some people have even claimed that the products
sales record is a unique economic indicator of Thailand so called MaMa Index. The report aims to
demonstrate the picture of Thai instant noodles market in term of price, competition and marketing as
the same time analyze if the product can truly be one of the countrys economics indicators.

I.

Introduction
Many Thais claim that the sales record of instant noodles mirrors the economics situation in

Thailand as well as the Thais lifestyle. Some economists have paid high attention to the movement of the
products as well as the local reporters who publish many interviews and special columns on instant
noodles or so called by the given nickname MaMa Index, the index which seems to be a unique
economics indicator for Thai society.
My interest in the topic was stimulated by the observation that instant noodles have become
parts of Thais daily lives. In the middle of hamburger crisis, there was a report that the sales of instant
noodles in Thai market has expanded. During the FIFA World Cup period in May 2010 many journalists
expressed their interest on the sales of instant noodles which jumped 50% compares to the same period
last year. 1 With its cheap price, easiness to prepare and quantity that can satisfy the rambling stomach,
instant noodles or so widely called in Thai MaMa can fulfill Thai consumers needs in every angle.
The paper will focus on instant noodles market situation, price, market competition and what the
leading companies do in order to increase their profits and contend against their competitors.

Saha Pathanapibul PLCs executive interview, Komchadluek Newspaper ; Source

http://www.komchadluek.net/detail/20100618/63336/-.html

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II.

Literature Review
Instant noodles were industrially produced in Thailand in 1970, shortly after it was firstly

introduced to Japan market in 1958. 2 Nowadays, instant noodles have become one of the most popular
food products which are consumed by Thai from all socioeconomic level in urban and rural area. The
product was also called MaMa after the MaMa instant noodles brand which is the biggest brand in the
market.
There are three leading brands; MaMa, WaiWai and YumYum plus few small brands like FF and
other import instant noodles from Korea, Indonesia and Japan competing fiercely in Thailands instant
noodles market which expected to value around Bt.11.2 billion in 2010 3 .

InstantNoodlesMarketShare2010
11%

19%
49%

21%

MaMa
(Producers:ThaiPresidentFoods
andSahaPathanapibulPLC)
WaiWai
(Producer:ThaiPreservedFood
Factory)
YumYum
(Producer:Ajinomoto)
others

Over the past decade local consumption of instant noodles has expanded by almost 50%. For
2010 the domestic consumption is expected to rise by 5-6% from the positive influences of the current
political crisis and the World Cup when consumers stocked up more of the product due to the curfew and
as to prepare for the late night football matches. 4 Although the producers have regularly introduced new
flavors of instant noodles to the market, the most preferable flavors of all time for Thais are Tom Yum
(Spicy Soup) and Moo Sub (Minced pork soup) which share at least 60% of the market.

Assoc.Prof.VisithChavasit&DenpongPhromyothi,TheRoleofInstantNoodlesinThailand,InstituteofNutrition,
MahidolUniversity,2000
3
InstantNoodles,2010:FocusonValuedAddedProductsandExport,KasikornResearchCenter;Source
http://www.kasikornresearch.com/EN/KEcon%20Analysis/Pages/ViewSummary.aspx?docid=24948
4
ThaiPreservedFoodFactorysexecutiveinterview,MatichonOnline;Source
http://www.matichon.co.th/news_detail.php?newsid=1277186923&catid=05

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Thailand, not only produces instant noodles for domestic consumption, the country has exported
the growing amount of instant noodles each year, within the pass nine year export amount of instant
noodles increases by over 114%. From 2000, the country has exported over 198,099 tons of instant
noodles and with the implementing of ASEAN Free Trade Area (AFTA) earlier in 2009 together with the
faint signs of economic recovery in European and US markets, the export rate expanded to 29,321 tons
from the 2008 record of 26,817 tons. Kasikorn Research Center has expected the export amount of
instant noodles to neighboring countries in ASEAN such as Laos, Myanmar, Vietnam, and Cambodia to
increase by 23-25% this year.

Tons

DemesticConsumptionandExport
20012009
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0

Export
Domestic
Consumption

2001 2002 2003 2004 2005 2006 2007 2008 2009

III.

Prices

Due to the fact that instant noodle is one of the core consumer goods in Thai market, for a
decade its price has been controlled by Department of Internal Trade (DIT), Ministry of Commerce. The
bureau has set the maximum price of pack instant noodles at the maximum of Bt.8. At present instant
noodles prices flexibility are limited to be between Bt.5 to 8 per pack. In 2007 as the prices of raw
material for food manufacturing the global market had strongly fluctuated, instant noodles were
immediately put into the Priority Watch List (PWL) product which the DIT would need to closely monitor
the movement and check the prices every 2 weeks. 5 Although recently the product was moved down to
Watch List (WL) category, its price and promotion as well as production and distribution are still regularly
monitored.

MEAsIntelligenceUnit,TheThailandResearchFund;Source
http://www.measwatch.org/autopage/show_page.php?t=20&s_id=451&d_id=449

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From 2000 to 2006, the average price of instant noodles in Thailand was no more than Bt.5 per
6

pack until in 2007 the two main producers in the market; the producers of MaMa and YumYum brand
had submitted their requests for the governments permission to increase the prices of pack instant
noodles by Bt.1 due to the jump of raw material prices such as wheat flour and palm oil.
The data collected by the Office of Industrial Economics shows that the increase of prices for the
first time in nearly ten years has no negative affect to the circulation of the products in the real market
since within 2007 since Thai consumers still consumed as high level of instant noodles as ever but the
decrease of domestic consumption in 2008 was caused by the heavily stock up on inventory of the
retailers at the end of 2007 when the news about the price increase had come out as to make higher
profit from the product. By the year 2009, we see an outstanding rebound of the domestic consumption
since the retailers inventories were at low level and in need of restocking.
2006

2007

2008

2009

Production Capacity

144,056.73

147,871.44

141,224.00

151,252.75

Jan-April
2010
49,530.24

Domestic Consumption

119,778.15

125,144.23

113,649.73

122,580.18

39,056.19

Export

22,412.12

23,909.42

26,817.86

29,321.23

9,557.66

Unit: Tons
Source: The Office of Industrial Economics

During the peak of economics recession when Thai economy shrunk over 4%, the sales record of
instant noodles also fell. In February 2009, Thai President Foods PCL experienced the first fall in 38 years
of its MaMa instant noodles sales record. The producer has started the first price war in Thai instant
noodles market by launching its first budget saving instant noodles flavors (Egg Protein flavor and
Chicken Soup) at the price of Bt.5 or Bt.1 lower than the market price of Bt.6 with strong objective to
capture the lost of its sales during the economic crisis. At present the prices of instant noodles in Thai
market are between Bt.5 to Bt.8 for pack instant noodles and between Bt.10 to Bt.15 for cup noodles
as for the bowl instant noodles which are premium products, the prices are from Bt.20 to Bt.30.

DepartmentofInternalTrade(DIT),MinistryofCommerce;Source
http://www.dit.go.th/Service/Pr/Gain/control/list_menu.asp

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IV.

Competition
There are three giant players in Thai instant noodles market; MaMa, WaiWai and YumYum. Each

holds the market shares of 49%, 21-22% and 19-20% respectively 7 . Due to the fact that instant noodles
are a completely substitute product with price controlled by the government and only a handful of
dominant competitors in the market, each producer needs to diversify its products to make more profit
and expand its revenue.
With maximum price set by the government, the technique of price discrimination or charging
different groups of consumers at different prices cannot be used in Thai instant noodles market. The
producers, on the other hand, use Product Differentiation technique by diversifying their products to
attract different group of targeted consumers. The three main competitors are developed their instant
noodles to the high-end products for more specific group of consumers. Mama has created Oriental
Kitchen, Korean style instant noodles with bigger package then launched to the market at the price of
Bt.15 to keep up with Korean wave which has hit Thailand hard a few years ago while YumYum
introduced YumYum Premium Bowl; microwavable instant noodles with real minced pork, fish ball and
mushroom at the price of Bt.30 to capture the adult consumers with higher purchasing power. For
WaiWai, the company decided to attract different group of consumers by introducing Serda, instant
noodles that specially manufactured for Muslims by Halal standard under the inspection of The Halal
Standard Institution of Thailand.

MaMa Oriental Kitchen

YumYum Premium Bowl

WaiWai Serda

To satisfy the demand from kid and teenager group, YumYum introduces its smaller pack of
instant noodles YumYum Shangnoi with a colorful package and elephant mascot, at the same time
promote its noodles as snack that can be consumed instantly without boiled water or cooking. WaiWai on
the other hand has done some re-branding and launched its WaiWai Quick into the market. The
producer redesigned the package, uses sassy looking girls as brand mascots and did a lot of
advertisement using some sexy female stars as the brand ambassadors while MaMa developed its MaMa

ThaiPreservedFoodFactorysexecutiveinterview,MatichonOnline;Source
http://www.matichon.co.th/news_detail.php?newsid=1277186923&catid=05

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White Noodles (V-Series) with lesser in calories and fat to attract female consumers with weight
concerns.

YumYum Shangnoi

WaiWai Quick

Although the demand for pack instant noodles in the Thai domestic market is always at the
high level but the market seems to reach its limit of expansion. With fixed price of pack instant noodles,
MaMa and YumYum, for several years, have continuously promoted their cup noodles which can be sold
at higher price (Bt.12-15) as a way to increase their revenues and substitute the profit lost from the
increasing prices of the raw materials.
Cup noodles are designed to response to the demand of middle class people and to the modern
lifestyle of white collar workers with higher income. Mr. Pipat Paniangvait, President of Thai President
Food, stated that the producers need to shift their focus from pack noodles to cup noodles since there is
still a large room for market expansion for cup noodles. The market share of cup noodles, in comparison
with the pack noodles, is only 6%. Thai President Food has expected that within the next 20 years, cup
noodles will share around 20% of Thailands instant noodles market. While Kasikorn Research Center has
forecasted that the shares of cup noodles in Thai instant noodles market will increase around 40% in
comparison to last year record to around Bt.896 million. 8

Mama Paper Cup Noodles

WaiWai Quick Cup

YumYum Cup

The three producers have also regularly introduced new flavors as to cover as many target
groups of consumers as possible. Based on the research done by Kasikorn Research Center on 1,025

InstantNoodles,2010:FocusonValuedAddedProductsandExportsKasikornResearchCenter;Source
http://www.kasikornresearch.com/EN/KEcon%20Analysis/Pages/ViewSummary.aspx?docid=24948

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sample consumers in January 2009 9 ; 22.8% of sample consumers tend to switch brands and try new
flavors. The research shows that the loyalty of consumers to each brand is not very high. Thai consumers
tend to move around and try new flavor all the time. In response to this factor, the producers introduce
at least 1 new flavor each year to attract more consumers and at the same time, giving the new flavors
the market trial. Some survive the trial and become the classic flavors while some have very short life on
shelf. The flavors of instant noodles in Thai market can be categorized into 2 groups; 1) Classic Flavor or
the favorite flavors of all time such as Tom Yum Kong (Spicy shrimp soup), Moo Sub (Minced pork soup)
and Tom Yum Moo Sub (Spicy minced pork soup) etc. 2) Neo Flavor or newly launched flavors such as
Sukiyaki, Kee Mao (Spicy stirred fried noodles) and BBQ Duck etc.

V.

Sales Promotion Activities

Apart from product differentiation, to compete with the competitors in Thai instant noodles

market, the producers also need to implement various marketing and sales promotion schemes. MaMa,
YumYum and WaiWai invest a large amount of money in marketing each year to keep their share in the
market and win further some shares for their rivals.
Marketing Mix is the important promotion technique that is widely used by the sated producers
in Thai market. The four elements of the technique are The 4 Ps which stands for Product, Price, Place
and Promotion.

10

InstantNoodles,2010:FocusonValuedAddedProductsandExport,KasikornResearchCenter;Source
http://www.kasikornresearch.com/EN/KEcon%20Analysis/Pages/ViewSummary.aspx?docid=24948
10
TheMarketingMix,BusinessStudies,BBC,Source
http://www.bbc.co.uk/schools/gcsebitesize/business/marketing/marketingmixrev1.shtml

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The first P is for Product, the producers as stated earlier have regularly differentiate their
products in form of size, packaging and flavor as to efficiently meet the consumers needs. Moreover the
producers have tried to end the criticism from the academicians that instant noodles are Junk Food with
high salt, fat and carbohydrate content by fortification with amino acids or addition of meat, egg and
vegetables to improve nutritive values.
The second P stands for Price; although price technique is not frequently used in the instant
noodles market. There is no direct increase or decrease in price of instant noodles in Thailand but the
producers often use the opportunity of launching new product with different packaging, sizes and
sometimes flavors to temporary increase the prices and boost their revenue.
The third P in the marketing mix is Place. Instant noodles producers in Thailand implement the
technique by increasing the distribution channels. The products were not sold only in hypermarket or
supermarket but in convenience stores and small retailers close to the consumers homes. According to
the survey done by Kasikorn Research Center on Instant noodles consumers behavior in January 2009,
38.9% of 1,025 samples choose to buy instant noodles from convenient store by buying less amount at
the time but more in frequency.
The last P is Promotion, three giant producers spend large amount of money in this section
each year. Above the line (ATL) marketing tactic or advertising through mass media such as Television
and Radio spots are heavily used as to create brand distinction and boost sales of freshly introduced
products. At the same time below the line (BTL) marketing is also used to reach more specific group of
consumers. The producers usually set some small booths in hypermarkets and superstores to generate
trials of newly launched products. The marketing technique which has been successfully used in Thai
instant noodles market for a long time is sweepstakes campaign. MaMa is well known of its gold
sweepstakes campaign which has been annually organized since 1998 while YumYum and WaiWai as well
regularly launched the sweepstake campaign with various types of winning prizes such as Cars, Vacation
package and cell phone.
Corporate Social Responsibility or CSR policy has been used as one of the marketing technique in
Thai instant noodles market. The producers used the tactic to build brand image as a trustable and social
responsible brand. The companies are taking part in education sponsorship as well as religious festival.
MaMa has invested around Bt.300 million in 2008 in CSR campaign while WaiWai has recently announced
its latest CSR campaign worth over Bt.40 billion to support agricultural sectors.

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VI.

Instant Noodles as Economic Indicator

Although instant noodles were claimed by many people as a unique economic indicator of Thai

economy or MaMa Index, the idea that the instant noodles which are the cheaper food will be
consumed more during the economic recession seems to be out of date.
Instant noodles can no longer be categorized as food for the poor or claimed to be sold very
well only during the economic crisis. With heavy promotion, long term brand building and product
development, instant noodles have become a part of Thais eating lifestyle. The products are consumed
by people from every class, gender and age. It has been among the top choices of food that consumer
will think about when they are hungry. Every household tends to have some instant noodles stocked in
the kitchen. Its popularity can be seen through the rocket high sales record of the products in some
important period such as recent world cup and during the political crisis and curfew earlier this year.
According to the market research done by Thai President Food, the biggest producers of the instant
noodles in Thailand, each Thai consumes 37 packs of instant noodles per year and within the next few
years the amount is expected to increase to 40 packs per person a year which will be very close to the
consumption record per capita of Japanese consumers where instant noodles were originated.

VII.

Conclusion
Instant noodles have become an important part of Thai peoples lifestyle. The product is among

the top choice that people will think of when it comes to convenient food. The key to success of the
product is its affordable price, convenience, accessibility, wide variety of choices and acceptable flavor.
Although Thai instant noodles market cannot be counted as perfectly competitive, the governments
price regulation policy and the fierce competition in the market which consists of a few competitors have
forced the producers to continuously develop their products, expand the distribution channels and come
up with a lot of promotion campaign which at the end beneficial for the consumers.

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References:

Assoc.Prof.Visith Chavasit Denpong Phromyothi, The Role of Instant Noodles in Thailand, Institute of
Nutrition, Mahidol University, 2000
Saha Pathanapibul PLCs executive interview, Komchadluek Newspaper;
http://www.komchadluek.net/detail/20100618/63336/ -.html
Instant Noodles, 2010: Focus on Valued Added Products and Export, Kasikorn Research Center;
http://www.kasikornresearch.com/EN/KEcon%20Analysis/Pages/ViewSummary.aspx?docid=24948
Thai Preserved Food Factorys executive interview, Matichon Online;
http://www.matichon.co.th/news_detail.php?newsid=1277186923&catid=05
MEAs Intelligence Unit, The Thailand Research Fund;
http://www.measwatch.org/autopage/show_page.php?t=20&s_id=451&d_id=449
Department of Internal Trade (DIT), Ministry of Commerce;
http://www.dit.go.th/Service/Pr/Gain/control/list_menu.asp
Instant Noodles, 2010: Focus on Valued Added Products and Export, Kasikorn Research Center;
http://www.kasikornresearch.com/EN/KEcon%20Analysis/Pages/ViewSummary.aspx?docid=24948
The Marketing Mix, Business Studies, BBC;
http://www.bbc.co.uk/schools/gcsebitesize/business/marketing/marketingmixrev1.shtml