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The potential impact of reducing sodium in packaged food: The case of the Chinese instant noodles market

Author

Listed:
  • Yu Chen
  • Chen Zhen

Abstract

Reducing sodium intake has been identified as a priority and cost‐effective intervention in lowering the risk of hypertension and cardiovascular diseases. To accomplish the population‐wide sodium reduction, two main strategies regarding food supply have been widely discussed: one is to set mandatory standards for the sodium content of foods and the other is to call for efforts from the food industry to voluntarily reduce sodium. Using the Chinese instant noodles market as an example, we estimate a random‐coefficients logit demand model to quantify the degree of substitution between competing products and between sodium and fat. The demand estimates are then used to simulate three sodium reduction strategies: a unilateral reduction by one firm, and industry‐wide reductions by multiple firms with and without reformulation of fat content. We find that voluntarily sodium reduction by a single firm results in its sales loss to its competitors; an industry‐wide sodium reduction causes demand reduction to be more evenly distributed across participating firms; and an industry‐wide reduction accompanied by an increase in fat content largely negates the adverse effect of sodium reduction on sales but risks an increase in population fat intake. [EconLit Citations: D12; I18; L66].

Suggested Citation

  • Yu Chen & Chen Zhen, 2022. "The potential impact of reducing sodium in packaged food: The case of the Chinese instant noodles market," Agribusiness, John Wiley & Sons, Ltd., vol. 38(1), pages 3-20, January.
    • Handle: RePEc:wly:agribz:v:38:y:2022:i:1:p:3-20
    DOI: 10.1002/agr.21727
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    References listed on IDEAS

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    1. Committee on Strategies to Reduce Sodium Intake of which Ronette Briefel is a member., 2010. "Strategies to Reduce Sodium Intake in the United States," Mathematica Policy Research Reports b0308d32d9694d40811d1de0e, Mathematica Policy Research.
    2. Ackerberg, Daniel & Lanier Benkard, C. & Berry, Steven & Pakes, Ariel, 2007. "Econometric Tools for Analyzing Market Outcomes," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 63, Elsevier.
    3. Jonathan Pearson-Stuttard & Chris Kypridemos & Brendan Collins & Dariush Mozaffarian & Yue Huang & Piotr Bandosz & Simon Capewell & Laurie Whitsel & Parke Wilde & Martin O’Flaherty & Renata Micha, 2018. "Estimating the health and economic effects of the proposed US Food and Drug Administration voluntary sodium reformulation: Microsimulation cost-effectiveness analysis," PLOS Medicine, Public Library of Science, vol. 15(4), pages 1-18, April.
    4. Steven Berry & Philip Haile, 2016. "Identification in Differentiated Products Markets," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 27-52, October.
    5. Chen Zhen & Eric A. Finkelstein & James M. Nonnemaker & Shawn A. Karns & Jessica E. Todd, 2014. "Predicting the Effects of Sugar-Sweetened Beverage Taxes on Food and Beverage Demand in a Large Demand System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 1-25.
    6. repec:mpr:mprres:6559 is not listed on IDEAS
    7. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    8. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
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    Cited by:

    1. Staudigel, Matthias & Oehlmann, Malte & Roosen, Jutta, 2024. "Demand effects of unilateral versus industry-wide sugar reduction scenarios," Food Policy, Elsevier, vol. 126(C).
    2. Cengiz, Ezgi & Rojas, Christian, 2024. "What drives the reduction in sodium intake? Evidence from scanner data," Food Policy, Elsevier, vol. 122(C).
    3. Daum Kim & Kohya Takahashi & Koshi Maeda, 2025. "Effects of health claims on demand structure and market power: The case of the yogurt market in Japan," Agribusiness, John Wiley & Sons, Ltd., vol. 41(3), pages 833-855, July.
    4. Pei Zhou & Yizao Liu, 2024. "Promoting healthy diets through food reformulation: The demand for “better‐for‐you” beverage," Agribusiness, John Wiley & Sons, Ltd., vol. 40(3), pages 641-660, July.
    5. Lingga, Doriani & Simanjuntak, Damiana, 2024. "Product Differentiation in Food-Product Markets: Evidence from the Asian Instant Noodles Industry," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 16(2), June.

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