The Tangled Story of Instant Ramen

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2:08Momofuku Ando had a dream. He wanted to turn ramen. Delicious noodles. Delicious noodles from something that was artisanal, that was made and served fresh in little shops, into a cheap, mass-produced instant food. This is not a dream of our moment, but it was a very mid-20th century kind of dream, which was when he was dreaming this dream. Yeah, an age of science, an age of convenience, an age where scientists could help us eat faster and more efficiently. Yes, yes. Industrial food as mid-20th century dream. His dream was also, as I'll talk about in the show, a very post-war Japanese economic miracle kind of dream.

2:52And so Ando had a friend of his build him a shed out back behind his house in Osaka. He bought a used noodle-making machine, brought it home on his bike, set it up in the shed. And every day for a year, he is out there in the shed from 5 in the morning until 2 the next morning, trying to figure out how to make his instant ramen dream come true. He is the Thomas Edison of the instant noodle. Kind of seems like he read the Thomas Edison biography and is... Dicking it to heart. Yes. He's a businessman. He is not a chef. But this doesn't stop him. He tries adding eggs, starch, yams, milk powder, spinach juice.

3:36Finally, he gets better at making the noodles. But he's still stuck on this last key step. How do you preserve them so that they're not fresh and going to go bad, but stable? You can just put them in the cabinet and then cook them up in an instant whenever you want them. And one day, Ando sees his wife making tempura in the kitchen in the house. And he notices that the batter is giving off these bubbles of moisture in the pan. And he realizes that by frying the freshly made noodles, he could dehydrate them and preserve them. Eureka! This is the moment. So he flash fries his noodles, lets them cool, and then he adds boiling hot water to the noodles.

4:22And voila, they rehydrate and cook within minutes. He has invented instant ramen, a product that human beings on planet Earth will eat 123 billion with a B servings of in 2024, in the distant future. This is the story that they tell at the Cup Noodle Museum in Osaka, Japan. It's a corporate museum. A corporate museum, indeed, that has a full-scale replica of the shed. They also tell this story at the other Cup Noodle Museum in Yokohama, where there is another full-scale replica of the shed. Maybe it's a replica of the replica. One doesn't know. But the official story, this story I just told you, leaves out some important details.

5:12Perhaps most importantly, Momofuku Ando was not the first person to figure out that you could preserve ramen by flash frying it. He wasn't even the first person to patent instant ramen in Japan. They don't want you to know this at the Cup Noodle Museum. Telling you the things they don't want you to know on business history. But look, Ando was the guy who made the instant noodle great, who built Top Ramen and Cup Noodle into global convenience food superpowers. And crucially, centrally, he was the guy who told his story better than anybody else. I'm Jacob Goldstein. I'm Robert Smith. This is Business History, a show about the history of business.

5:55Today on the show. Ramen. The foundational product, a foundational product of our modern age. Fuels higher education. Absolutely. PhDs only eat ramen. Only eat ramen. And it has a weirdly warm place in our hearts, given that it is this industrial mid-century food. Yeah, the warm place is the salt. The salt and the hot water. The hot, salty water going down. A lot of the salt blood pressure thing going on. When I was in elementary school and I was home alone in the afternoons on the weekday afternoons, sometimes I'd eat a pack of ramen raw. You ever do that? I have done it. It is kind of delicious.

6:36It's not bad. The only question is, do you go flavor pack or no? Like how spicy you feel? No, no flavor pack. My best ramen moment was when I was in South Korea. I was watching a baseball game. And instead of peanuts and Cracker Jack, you go down to the convenience store at the stadium, buy a cup of ramen, add hot water, and then you slurp it at your seat. It is remarkably ubiquitous. You know, people talk about eating it in Nigeria and in Poland and, you know, rich countries, poor countries, Asia, Europe, Africa, the Americas. ramen has conquered the world, right? Instant ramen has conquered the world.

7:15So how did it happen and why? It happened largely because of this guy, Momo Fukuondo. So let's talk about him. He was born in 1910 in Taiwan. His name at the time was Gopek Huck. I'm not sure if I'm pronouncing that correctly. His parents died when he was very young. He'd later say he couldn't remember their faces. And he was raised by his grandparents. He spent his childhood in their textile store doing chores. And when he was 22, he went into the textile business for himself with money he had inherited from his parents. And at the time, at the time, Taiwan was a Japanese colony. This is the first part of the 20th century.

7:54And Ando had an uncle near Osaka, and that led him eventually to move to Osaka, move to Japan, and set up a textile company there. And then World War II started, which just took his textile business out of business. But one thing that will become clear about Ando that I think is really the essence of his story in some ways is he is a hustler. He is a guy who just keeps coming up with new businesses. And he's going to come up with a lot before he gets to ramen. So during the war, he's selling charcoal. He's selling some kind of optical equipment for the war effort. But then a manager at the factory is suspected of fraud.

8:33fraud and apparently Ando reports the fraud, but he ends up getting arrested. It's unclear really what happened, but it is clear that he got arrested. And he's put in a cell and he sees prisoners fighting over tiny servings of food. And he'll later say this is part of his impetus to want to create this kind of cheap, abundant food. He gets out 45 days later and not long after he gets out, Japan surrenders and the war is over. around this time he marries a japanese woman named masako ando takes her name actually ando changes his first name to momofuku side note as some people some listeners may have been thinking already isn't there a fancy basically ramen chain food chain in america today called momofuku is it a coincidence robert you actually talked to uh david cheng right the guy who started the chef and he said it was a coincidence that momofuku meant good peach or lucky peach or Yeah, yeah.

9:29And so, yeah, he was not basing it on Momofuku Ando. Or so he says. Or so he says. Surely he must have known. Anyway, so we're in post-war Japan now. There is a profound food shortage. In fact, the U.S. had been, you know, deliberately cutting off Japan's supplies of food imports during the war. And now after the war, the harvest in Japan is bad. It's quite a desperate situation. People are eating peanut shells. They're stealing vegetables from the fields. And Ando is this entrepreneurial guy out of prison, wants to start a business. Also, I think genuinely wants to do something helpful. So he starts getting into the food business.

10:13He finds an abandoned military base on a beach and finds a bunch of demobilized soldiers with nothing to do and opens up a salt plant. And the soldiers are working for him, making salt on the beach. Another company he starts extracts the marrow from discarded animal bones to make some kind of nutrition supplement. And around this time, a couple things come together to plant the seeds of the big idea, the ramen, the instant ramen idea in his mind. One, the U.S. is occupying Japan. And the U.S. is bringing food from the U.S. to help stave off famine. In particular, the U.S. is bringing in surplus wheat.

10:59It's a classic American move. Yeah, because we have wheat farmers, and it's a great way to take our bounty and move it to another place, even if they don't traditionally eat much wheat. Right. And so they had eaten some bread in Japan, and before the Portuguese had brought bread, they didn't eat much. But the Americans, they're bringing in this flour and turning it into white bread, which is not a normal thing in the Japanese diet. And there are these like PR vans going around, which I think means like the vans with the big speaker on top driving around being like, America is giving you bread, you know, and they're putting it in school lunches and this sort of thing.

11:37If you're hungry, eat some bread. Bread is good. America, good. That's the gist. Yeah. So they're trying to get people to eat the bread. Ando knows about this. And there's a moment when this is happening that is like a key moment, according to him, where he's walking by a train station. And he sees this long line of people. And they look haggard. You know, their clothes are worn and they're kind of downcast. And it's this long line. It's like, what is this line? And he looks at the front of the line and he sees that the people are waiting to get a bowl of ramen. Noodles, hot broth, it just looks so good and so satisfying.

12:21You would wait a long time for it. And Ando thinks, this is ridiculous. Like, we're trying to talk people into eating bread, this food people basically don't want. That is not a Japanese food. We should be turning that wheat into ramen, this food that people are lining up around the block for. Which is a very smart business thing to notice. There's a huge demand for something that has a low supply. There's this large supply of bread that no one wants. I mean, it's great. So there is this sort of corporate autobiography of Ando that talks about this moment. And he says he actually goes to a guy from the Ministry of Health with this idea, turn the weed into ramen.

13:05But he says there was a problem. At the time, however, ramen and Japanese udon were solely the domain of small-scale businesses. There was no pipeline connecting U.S. flour surpluses with the structures necessary to produce and distribute noodles. The lack of adequate manufacturing facilities amounted to a bottleneck. A bottleneck. One of the things we often see in the history of business. And you can make a lot of money if you figure out a way to solve the bottleneck. We need a printing press, but for ramen noodles. Which is what he's going to do. Yeah, I mean, ramen at this time is a craft product.

13:39I actually thought of cars before Henry Ford came along. You know, it's made in small batches. It's made fresh. It's the kind of thing we sort of fetishize today, like, ooh, small batch. That sounds nice. But you're not going to feed a hungry nation with it. You just can't turn these shiploads of wheat into ramen in this way. So Ando has this idea, and maybe he would have solved this problem right away, but for the fact that he got arrested again. Wow, criminal. This time it was for tax evasion, for what it's worth. Ando's story is that it was a misunderstanding about a scholarship program he started for his workers.

14:16What really happened, I don't know. But again, it's clear that he was arrested, his assets were seized, and this time he spent two years in prison. This is some time. Yeah, that's a lot of time to think about ramen. And you don't even have instant ramen to eat while you're in prison because it hasn't been invented yet. So he gets out, and now he is ready to make his big ramen breakthrough after he runs a credit union for six years until it fails and goes bankrupt. He tries a lot of things that don't work is what I'm saying. Now, you know what? I have to say this makes me love him. Not that he was some lifelong chef who wanted to perfect this culinary thing, but he's a guy who tried a bunch of things.

14:56He's just looking for a way through. He just keeps working at it. Okay, now he's ready. Yeah. For going out in the shed in the backyard, supposedly having the breakthrough. This is the late 50s. By 1958, he figures it out. Robert Smith, let's go to the official corporate narrative. I'm sure you can read this on a big wall at the Cup Noodle Museum. On August 25th, 1958, chicken ramen, the world's first instant noodles, was launched. Since chicken ramen, a food ready to eat in just two minutes after adding hot water, was a product inconceivable under the conventional wisdom of the times, It was dubbed Magic Ramen.

15:33They may have dubbed the noodles Magic Ramen. Nobody else called it Magic Ramen. They called it Magic Ramen, yes. The thing that is clear from the historical record, these noodles were not inconceivable under the conventional wisdom of the time. In fact, someone else seems to have conceived them before Momofuku Ando. Robert, we've got more history, this time not from an official corporate history, but from the book The Untold History of Ramen by a historian named George Solt. A much smaller company had already released an identical product in 1955 called Flavored Chinese Noodles, three years before the release of chicken ramen.

16:14But the company was forced to halt production after a few months due to weak sales. Interesting. I turn now to Exhibit B, a Harvard Business School case study entitled Momofuku Ando and the Globalization of Noodles, which points out that flash-frying noodles to preserve them was a technique that had been used since the early 20th century in Taiwan. Where he's from. Where he's from. They called this noodle dish GC Mian, which I'm probably mispronouncing, but I want to say it so I can quote directly from the Harvard Business School case study, which says, Taiwanese families shipped packages of GC Mian to their relatives living in Japan when the country experienced post-war food shortages.

17:02It seems like Momofuku Ando did not invent instant ramen. Even if he did go to the shack, he wasn't the first guy to figure it out. You know, I'm OK with that. I'm OK with that. If there's one thing I've learned during this show, it's that, you know, invention is fine. Invention's great. I'm glad there are inventors out there. But ideas are plentiful and execution is rare. When we did that story about Edison and the movies, we talked about the similar theme, right? Edison basically did not invent the movies, but he got credit, at least in America, for inventing the movies. And when we talked about that, we talked about Joseph Schumpeter, the famous economist, the guy who came up with the term creative destruction, which they love today in Silicon Valley.

17:47And he wrote beautifully about the difference between inventors and entrepreneurs, which is what we're talking about here. So give us that. As long as they are not carried into practice, inventions are economically irrelevant. And to carry any improvement into effect is a task entirely different from the inventing of it. And a task, moreover, requiring entirely different kinds of aptitudes. It is therefore not advisable, and it may be downright misleading, to stress the element of inventions as much as many writers do. Or podcasts do. Yeah, we do. That's us. We are stressing it too much. Because the inventor is so fun, right?

18:25Like, yes, execution is what matters. But like the guy in the shed trying to come up with how to do it, that is delightful. I think we like the lesson that anyone can be struck by lightning. The light bulb goes off. You come up with an idea and change the world. If the real story is now you have to actually work hard and do all the hard implementation things to change the world, well, that's not as much fun. That's just a job. That's drudgery. And I used to think, I mean, Edison, the guy who more than anybody created the inventor narrative, you know, famously has 1 % inspiration, 99 % perspiration.

19:01And I used to think that was like what you need to get to the invention. But no, it's what you need after the invention to get to business success. Like once you have the idea, all of the work is before you. And I used to think that the myth of the inventor was an American thing or a Silicon Valley thing. But this story suggests that, no, it is in fact a global human thing. We love an origin story. We love an inventor. And so Ando was apparently not the inventor creating magic noodles out of 1 % inspiration, 99 % perspiration, and 1 % cooking oil. I know that is 101%. Add in 3 % salt and you've got the secret recipe.

19:50But he was a great entrepreneur. He was the guy who brought instant ramen to the world, which we will talk about after the break.

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22:21Momofuku Ando's first instant ramen, it does seem like it was good ramen. It was called chicken ramen because he actually cooked in some way, cooked the noodles in chicken broth before he flash fried them. Ooh, the flavor was baked right in. The flavor was fried right in. And so there was no flavor packet initially. You just add the hot water and you get some chicken. And there was in the block of noodles, it was a block of noodles like now in a, you know, in a top ramen pack. But it had a little divot on top. And the idea was you crack an egg into that divot and then you pour the hot water over the whole thing and the egg kind of poaches while the noodle cooks.

22:56I like that. That sounds delicious. Bring that one back. Yeah. He calls his ramen company Nissin Foods. The official story is that the new name symbolizes his desire to create a rich flavor purely each day, because nichi means day and shin means pure. Now, we could talk about Ando making instant ramen in his house with his family, hundreds of packs a day. We could talk about him putting on a suit and doing a demo at a fancy department store in Tokyo, calling out to passers-by. Those things really happened. But you know what I want to talk about? I want to talk about Momofuku's real Edison move, suing all his rivals.

23:36Oh, so good. First, he tries to trademark the chicken ramen name in late 1959 and finds there are already 13 other companies making a similar product under that name. Goes to court, wins exclusive rights to the name. Next problem, somebody else has already patented his flash frying method. Another guy who was born in Taiwan, actually, and had been running a noodle shop in Japan for years by that point. And so Ando negotiates with the guy, winds up buying the patent. And according to that HBS case study, the contract apparently included a provision not to talk publicly about any relationship to Momofuku's chicken ramen.

24:19He's already building up the myth. He's already building up the myth. First rule of buying up intellectual property rights. Don't talk about buying up intellectual property rights. But I guess somehow the word leaked anyways because a newspaper asked Ando about this deal. Here's what he said. I am not thinking about monopolizing the instant ramen business. I want to authorize the use of the patent by companies with excellent facilities and technology. If it can be used to prevent surplus production and sharp price drops, I believe that the industry can be stabilized. He's saying, I want to share the miracle that is instant ramen.

24:54This sounds like J.P. Morgan to me, creating his, you know, monopolies in 1900. Why do we have all these steel companies competing with each other and making a chaotic market? Wouldn't it be much better if one steel company sold all the steel in an orderly fashion? I'm not in it for the money. I'm in it to prevent surplus production of ramen. So Ando starts threatening rivals with patent violation lawsuits, reaches agreements with 20 companies to share patent rights in exchange for a portion of their revenues. They're all kind of banding together. Some of the other ramen companies, they're a lot by this point, hold out and form their own cartels.

25:32And in the end, the government gets involved and brokers a deal. Are they fighting in the streets? Like, do they go hitting each other over the head with dried noodles? They go to the factory and break all the news into little pieces. That's a good one. So in the end, the government gets involved, brokers a deal, and there wind up being three ramen cartels. Ando is, you know, kind of at the center of one of them. This is important. There is a bigger idea here. This is a Japanese economic miracle idea, right? These decades, the decades after the Second World War, Japan has this period of incredible growth.

26:06And the government is quite involved. It is not free market growth like we might idealize it in the United States. The Japanese government is doing in a lot of industries what it is doing in ramen. It's managing the economy so that there is some competition. You want competition because you want innovation. You want people to feel motivated every day. But there is a limit to that competition. Not too much. You don't want it to drive people out of business. No profit whatsoever. Yeah, that is the government's point of view. Whether that is optimal or not, we can debate. It worked for a lot of East Asian countries around this time.