NONGSHIM
U.S.A.
COMPANY HISTORY
Ramen originated in China roughly 4000 years ago. Following this, other Asian cultures
adopted them some time later. After World War II, Japan experienced an intense food shortage
and turned to noodles as a cheap source of needed calories. Today, the ramen noodle is known
worldwide and is part of over 100 billion meals every year (World Instant Noodle Association,
2013).
NONGSHIM Korea was established in 1965, operating in Korea for most of its 48 years in
business. The company manufactures and sells food and beverages, and exports its products to
80 countries around the world. NONGSHIM is a $1.6 billion food manufacturer and the leading
ramen noodle company, with a market share of 56% in South Korea (Canada International
Markets Bureau, 2010; Food Engineering, 2006).
NONGSHIM America is a private company based in California since 1994 under its holding
company, NONGSHIM Korea. In June 2005, NONGSHIM opened its $75 million 268,000 feet
USA plant and headquarters in Rancho Cucamonga, California. NONGSHIM America currently
has 11 office locations, providing 11 snacks and 41different noodle products in the United States,
Canada, and Mexico.
Since the opening of the California plant, NONGSHIM America has shown a rapidly
growing sales trend. Total sales in the United States and North America increased from $69 to
$135 million dollars from 2005 to 2012.
INDUSTRY ANALYSIS
Product Category:
Product Form:
-Maruchan Instant Lunch
-Nissin Original Cup of Noodles
Budget Level:
-Fast Food/Resturant
-Nissin's Souper Meal
-Maruchan's Yakisoba
-Campbell Select Harvest
-Lipton Secret Noodle Soup
Generic Level:
-Snacks and Meals
-Candy
-Ice Cream
-Donuts
NONGSHIM’s direct competitors in the product form section are Nissin and Maruchan. In
this section, NONGSHIM’s competition also consists of similar instant cup noodle products
produced by other competing American companies. In a more detailed analysis, NONGSHIM’s
Cup of Noodles product directly competes with Nissin’s “Original” Cup of Noodles product and
Maruchan’s Instant Lunch product.
In the category of instant soups there is also an array of other competitors, many of which are
very large companies such as Lipton and the Campbell Soup Company. These companies do not
exclusively manufacture or produce ramen instant noodle soups. Lipton, though known for its
tea, also produces noodle soups that come in packages, with or without chicken. Campbell
produces an assortment of food products, mainly soups, juices, broths, and sauces. Campbell has
hundreds of kinds of soups, but none are ramen. Its most popular soups are chicken noodle,
tomato, and cream of mushroom. Lipton and Campbell are category competitors of
NONGSHIM in that they can satisfy a consumer’s need for instant soup.
In the generic section, NONGSHIM competes with other companies that produce snacks and
noodles, such as Twin’s burritos, Lean Cuisine meals, Kraft’s Easy Mac, and Don Miguel’s tacos.
This section of competition is more focused on products that are alternatives to NONGSHIM’s
instant cup of noodles product. For example, Twin’s burritos and Kraft’s Easy Macs are
considered alternatives to NONGSHIM’s instant noodles because they are all microwavable
snacks that only take about 3-4 minutes to prepare and cook.
At the budget level, all products and services competing for the same customer dollar are
considered. NONGSHIM’s budget level competitors are fast food restaurants, ice cream
producers, donut producers, and even movie rentals because they all fall in the category of either
food or entertainment. For example, a customer may purchase a box of NONGSHIM cup of
noodles or he/she may use his/her money toward the purchase of a movie rental or a banana split
at a local ice cream shop. The consumer will also purchase products and services from the
budget section if products in the generic product category, or products from levels of competition,
are not available to the consumer.
Maruchan
Maruchan is a top competitor for NONGSHIM. Maruchan has been in business in the
United States since 1978; it therefore has larger brand recognition. Maruchan opened its first
American branch in Irvine, California, and was America's top selling dry soup by 1983. In 2004,
they introduced Yakisoba-Japanese stir-fry noodles, the official soup of the 1984 Summer
Olympics in Los Angeles. Currently, Maruchan has a total of four locations in the United States.
Products: Maruchan Ramen Noodles comes in a variety of flavors, including: Shrimp, Pork,
Beef, Chicken, Hot & Spicy, among others. Their instant cup noodles come in nine flavors, far
more compared to the number of flavors produced by NONGSHIM.
Quality: Maruchan Ramen noodles are made in Richmond, Virginia and Irvine, California in the
United States. The nutritional information given by Maruchan instant noodles differ from those
of NONGSHIM. For example, NONGSHIM has 240 calories, 50% sodium, and 14% fat,
whereas Maruchan Chicken flavor instant noodle soup has 290 calories, 58% sodium and 18%
fat.
Sales: Maruchan is the cheapest instant noodle in the market. Locally, the product sells for $1 or
less. Maruchan noodles can be found in almost every American grocery store or supermarket.
Sales in the United States were $663,117 million in 2009, which is the highest when compared
with NONGSHIM and Nissin. Maruchan sales increased in 2009 compared to 2008.
Nissin
Nissin Food introduced the original instant noodles in 1958 in Japan. In 1970, Nissin Food
Products Co., Ltd. established Nissin Foods (USA) Co., Inc. in Gardena, California.
NONGSHIM exported instant noodles to the United States beginning in 1971. Nissin currently
has a total of seven products with different flavors in the United States, and NONGSHIM
currently has 10 products. Both companies produce noodle soup bowls and Top Ramen. Nissin
began producing and selling the highly popular Cup O' Noodles in the United States in 1973.
Unlike Nissin Foods, NONGSHIM will increase the number of stores in their distribution chain,
which includes large retailers such as Wal-Mart and Costco, along with actively offering
promotions such as special events and free samples.
Products: Nissin has seven types of products: chow mein, bowl noodle, rich & savory, cup
noodles, Top Ramen, and chow noodles. The most popular products are cup noodles and Top
Ramen.
Quality: Their instant noodle has 268 calories, 53% sodium and 15 % fat.
Sales: Nissin Noodle Soup bowls cost about $1.59 or less in some stores. Nissin’s sales in the
United States were $302.27782 million in 2009. Nissin’s aggregate sales had dropped 11.6 %
from the previous year due to the negative effects of foreign exchange fluctuations
The following egg diagrams of the instant noodle industry and the snack industry show the
different products that are offered by NONGSHIM in the inner circle. In the middle circle, the
direct competitors are placed near the associated product that NONGSHIM may compare to. In
the outer circle, the indirect competitors are closely related to the direct competitors and
NONGSHIM, but they are not as directly comparable to NONGSHIM as the direct competitors
are.
Instant Noodle Industry Egg Diagram
Snack Industry Egg Diagram
Product Feature Matrix ~ Instant Noodle (Cup Noodle)
Product(s)
Price
Size
Calories
# of flavors
Trans Fat
Sodium
Cholesterol
Sugar
Cooking directions
Made in
Awards
NONGSHIM
Shin Cup
$1.29
2.64 oz. (75 g)
250
1
0g
1350 mg
0g
4g
3 steps
U.S.A.
2007 Chef’s Best
Nissin
Cup Noodle
$0.39
2.25 oz. (64 g)
300
10
0g
2524 mg
5 mg
6g
2 steps
U.S.A.
none
Maruchan
Instant Lunch
$0.99
2.25 oz. (64 g)
290
9
0g
1380 mg
0g
4g
2 steps
U.S.A.
none
Reference
Fabulos Food Plants:Noodle Culture Club, 2006, Food Engineering.
Packaged food Sales, 2010, Canada International Markets Bureau.
Expanding Market, 2013, World Instant Noodle Association.