Commentary on Political Economy

Wednesday 13 March 2024

 Readers of this Blog would know that I have long insisted on what I have called "the Asiatization of Western life". With this phrase I meant to draw attention to the steady and precipitous decline in Western standards of living and political and social institutions that persistently and consistently and disastrously continue to resemble the standards obtaining in the East - standards that may be categorized broadly as "Oriental despotism". Here is a fresh illustration of this cataclysmic process in today's Financial Times.

Why instant noodles are an eco­nomic red flag

If the entire (cooked) length of instant noodles sold around the world in a single year were laid out in a line, the res­ult­ing 6.2bn 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 $54bn.

In 2022, accord­ing to the World Instant Noodles Asso­ci­ation, human­ity col­lect­ively bought a record 121bn 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 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-$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 online or from whole­salers to take advant­age of noodles’ resi­li­ence: unlike most 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.

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