Impact of the COVID-19 outbreak On the Global Instant Noodles Market
The degree of the impact of the COVID-19 pandemic varies from country to country. Due to effective containment strategies, a few countries are reviving their economies and enforcing measures to sustain growth. The number of recent instances has plateaued or is declining in other countries. Therefore, many countries are debating at the next right step for reopening their economies. Some nations are at the peak of the infection and are taking the necessary measures to fight the outbreak. All countries are deploying measures such as physical distancing, limiting travel, encouraging the use of personal protective equipment, and increasing the number of centers for checkups and tracing. This pandemic situation has affected the commodity industry in many ways. The demand for essential commodities, such as groceries, has been increasing significantly.
COVID-19 has created a panic situation among consumers with temporary closures of retail stores in an attempt to limit the impact of the virus. This has led to panic purchasing among the consumers and the stockpiling of food products with a long shelf life, such as instant noodles. For instance, Toyo Suisan, an instant noodles manufacturer in Japan, stated that the demand for instant noodles has witnessed an increase and is higher than usual. Stockpiling among the consumers has also resulted in creating immense pressure on supermarkets & hypermarkets, convenience stores, and food suppliers globally, which is rapidly accelerating the transition to e-commerce. Online shopping has been experiencing substantial growth over the past few years, with groceries being the least contributing category. However, in this current situation, the grocery category accounts for the largest share of the total e-commerce orders.
As a result of stockpiling, retailers are running out of stock, and the grocery shelves for popular items sit empty, which is eroding the consumers’ brand preferences. This is promoting the consumption of the products manufactured by small regional players. It will take time for the top market players to bridge the demand-supply gap, which can be a game-changing opportunity for local and new brands of instant noodles in the global market.
Although the demand for instant noodles is anticipated to increase, issues such as supply chain disruptions, logistics, limited availability of raw materials, and unavailability of labor are anticipated to restrict the growth of the global instant noodles market to some extent. With restrictions in cross-border transportation of commodities, the manufacturers are highly dependent on local raw material suppliers, which increases the bargaining power of the suppliers. The limited availability of raw materials and low production capacities of the manufacturers is expected to create a sizeable demand and supply gap, resulting in the increased retail prices of the product in the next couple of months.
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