Chinese agricultural firm carves new FMCG product line

By Kacey Culliney

- Last updated on GMT

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Agriculture company dives into the 'lucrative' noodle sector
Agriculture company dives into the 'lucrative' noodle sector
Shanxi-based Deyu Agriculture has developed a new line of MSG-free, easy-cook noodles that will enable it to delve into an unknown yet lucrative fast moving consumer goods (FMCG) sector in China.

The corn and grain specialist has launched a wide variety of noodle products – including flavoured, fragrant and high-gluten – set to be distributed in more than 20,000 supermarkets and convenience stores across 29 of China’s provinces.

“In China, the noodles market is huge and maintains an annual growth rate over 15​%,” Jimmy Hao, CEO of Deyu, said, “the demand is tremendous.”

This shift aims to capture a sizeable share of the country’s growing noodle market, Hao told FoodNavigator-Asia.

Increased incomes, urbanisation and an increasingly modernised retail sector is all set to drive this sector further, he added.

Recent Mintel research​ suggested that manufacturers can seize instant market value with healthier, non-MSG noodles in China.  Deyu’s noodle line is positioned at the healthy end of the market, he said.

They are “dried and made from wheat flour, egg powder and fragrant mushroom powder with a little salt. They are free from additives, including MSG, and non-fried to ensure low salt, low sugar and low fats,” ​he detailed.

The line includes plain noodles, and flavoured – fragrant mushroom and chicken egg, he said; flavours identified as “most popular among Chinese consumers according to our market analysis.”

Strong among competitors

Hao said that being a diversified food company will aid the company’s shift into a new market segment.

“We can fully utilise our resources, especially our supply chain, extensive sales network and well-recognised brand names…Strong advantages in industrial resources, distribution channels, marketing, branding and financial resources,”​ will ensure a solid entry into this new market sector for the company, he said.

There has been a shift from simple price competition to product quality and brand rivalry, he said, and “this accelerates the closing down of small size enterprises with low production capacity, inferior technology and unreliable product quality.”

“We use high quality raw materials for production, choose the most popular flavours and set moderate prices in line with what Chinese consumers can afford,”​ Hao said.

Deyu will not undertake the noodle production, he said, in line with its model of ‘light assets’. Several Original Equipment Manufacturing (OEM) noodle producers will be used, he added.

Within the next two to three years, the company hopes to become a well-recognised, “outstanding”​ brand, he said.

The company plans to diversify further, Hao said, “by introducing more staple food products such as rice and oil.”​ 

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