How ＂big＂ can a bottle of mineral water be？

　　reading prompt

　　Bottled water actively promotes high-quality, segmented, and functional products to the general public, and the quality, brand culture, water source, brand, landing ability, and even appearance of the product become the key to determining the success or failure of the brand.

　　Beer is an indispensable drink for people, coffee and tea can help people refresh themselves in the afternoon, sweet and sour juice is loved by teenagers, and the most bland water has become the most profitable drink.

　　On September 8, Nongfu Spring, known as "the porter of nature", was listed on the Hong Kong Stock Exchange, and Zhong Shanyuan, the founder who once became China’s richest man, also ushered in his highlight moment.

　　According to Qichacha data, there are currently 64,000 mineral water-related enterprises in China. In the past ten years, the annual registration volume of related enterprises has been on the rise. In 2019, 7,393 new enterprises were registered, an increase of 103% over 10 years ago. In the first half of this year, 3,929 new enterprises were registered in the mineral water industry, an increase of 8.5% year-on-year. 71% of the registered capital of enterprises is within 1 million, and only 10% are over-10 million.

　　Industry insiders point out that the listing of Nongfu Spring will have a profound impact on the entire Chinese food and beverage industry. After this leading Chinese beverage company raised a large amount of funds through the IPO, the possible business direction change, business model transformation and new product launch may attract the attention of the entire industry.

　　Why did plain water become a "money printing machine"?

　　From the veteran Wahaha to Master Kong, and then from the high-profile Hengda Ice Spring to the strong rise of Hundred Years Mountain, from a nobody to a water giant, what did Nongfu Spring rely on to rise?

　　In 1996, Zhong Shanshan, who turned from media to business, founded Nongfu Spring. At that time, the mainstream of the packaged drinking water market was still "pure water", and Wahaha and Robust were the eldest and second in the market respectively. As a latecomer, what does Nongfu Spring rely on to make a comeback? Zhong Sui believes that for a small business to grow and develop, the type of business it operates must be unique, and it must be profiteering, because there is no scale effect for you to accumulate slowly.

　　According to the data, Nongfu Spring’s main products cover packaged drinking water, tea beverages, functional beverages and fruit juice beverages. From 2012 to 2019, it maintained the first market share of packaged drinking water in China for eight consecutive years.

　　From the brand logo of "beautiful mountains and rivers", to the classic red and white mineral water bottle design, to "Nongfu Spring is a little sweet" "We don’t produce water, we are just nature’s porters" These national advertising slogans, it can be said that Nongfu Spring is not only a drinking water company, but also a first-class design company and advertising company.

　　The sales of Nongfu Spring mainly rely on the dealer network of capillaries across the country, but Nongfu Spring is also actively exploring new retail models. Smart end point retail equipment is a new attempt. As of the end of 2019, Nongfu Spring has placed nearly 60,000 smart end point retail equipment in nearly 300 cities across the country to meet consumers’ immediate purchase needs for beverages.

　　On the Cruelty of Competition from Huiyuan Delisting

　　On August 28, Nestle ? and Tsingtao Brewery Group reached a strategic cooperation. The latter will take over the drinking water business of Nestle ? in China for many years, and Nestle ?’s own brand "Nestlé Youhuo" will also be operated by Tsingtao Brewery.

　　When Nestlé exited the Chinese market, many people were wondering whether such a big world-class giant had given up on China’s bottled water market. Was bottled water really not profitable? Soon, Nongfu Spring used its own listing to tell the answer.

　　In 2019, Nongfu Spring’s annual revenue was 24.021 billion yuan, and the profit was nearly 5 billion yuan. As for the Nongfu Spring mineral water we are most familiar with, every 1 yuan of sales revenue can bring a gross profit of 6 cents.

　　At present, Nongfu Spring is undoubtedly the king of the industry, but who can predict what will happen next. In the beverage industry, it happens from time to time to catch up, surpass and lag behind. In 2007, Huiyuan successfully listed as the first stock in Hong Kong Chinese New Year, which was enthusiastically sought after by global investors, and the scale of financing reached 2.40 billion Hong Kong dollars. In 2007, Zhu Xinli, founder of Huiyuan, ranked 91st on the Forbes China Rich List, with assets of 6.13 billion yuan on the list.

　　At that time, Huiyuan was also very popular. In addition, Coca-Cola later offered a high price of 17.92 billion Hong Kong dollars to acquire Huiyuan, Huiyuan seemed to have reached the peak of its life. However, what happened later was somewhat unexpected. The acquisition was stopped, and Huiyuan also fell into trouble due to various reasons such as illegal lending. In 2018, Huiyuan began to suspend trading, and 20 months later, the Stock Exchange decided to cancel Huiyuan’s listing status.

　　As an excellent mineral water quality in Chongqing, the reserves exceed 250 million cubic meters per year, and it also had glory in the 1980s and 1990s. During the Beijing Asian Games, Zhongliangshan mineral water ranked among the top ten in the country, accounting for 70% of the market share. Now it is no longer brilliant. Ren Minghua, secretary general of the Chongqing Geology and Mining Association, vividly likened it to "bamboo shoots after a rain, no forest". At present, except for the "Zhongliangshan" brand, which has a small number of small bottles of mineral water for supply to Zhongbai supermarkets, some hotels and enterprises, the rest are bottled, and there is almost no bottled mineral water for sale in the retail market.

　　Xu Bing, general manager of Chongqing Zhongliangshan Mineral Water Co., Ltd., told reporters that more resources and less mining are the current situation of mineral water in Chongqing that cannot be ignored. The problems hindering the development of mineral water enterprises in Chongqing are mainly "one big, three high and one low". The investment in building a factory is large, the production cost is high, the transportation cost is high, the Quality Standard is high, and the "threshold" of purified water is low, resulting in difficult development.

　　"To find a suitable, safe and clean water source, we must go through more than a dozen links such as exploration, testing and certification in the early stage. After production, in addition to paying more than a dozen taxes and fees, we also need to consider transportation costs." Xu Bing said that this is only the first step. The next market development will not be possible without huge capital investment. Under the pressure of big brands, it is difficult for small brands to break through.

　　"The fundamental problem lies in the consumption concept, and the market needs to change the consumption concept." The person in charge of the Chongqing Natural Resources Protection Bureau believes that the direction of Chongqing mineral water enterprises should be to develop together and achieve mutual benefit and win-win results.

　　How can we seek innovative breakthroughs?

　　Our country’s mineral water market has grown from scratch, from small to large, and its development speed has shocked Western peers. According to Euromonitor statistics, the sales scale of our country’s bottled water has increased year by year from 106.92 billion yuan in 2013 to 183.09 billion yuan in 2018, with an average annual compound growth rate of 11.8%. In 2019, the market size exceeded 200 billion yuan.

　　The reporter learned in the interview that China’s bottled water industry has undergone two rounds of consumption upgrades. The first round is the consumption upgrade from other bottled water to purified water. The second round is the transformation from purified water to natural mineral water. The third round will be more segmented. In the bottled water market, functional products such as maternal and infant water and children’s water have been developed to meet the consumer needs of different groups.

　　Liao Lei, Secretary-General of the China Mineral Water Professional Committee, believes that in the context of consumption upgrading, it is precisely because of high profits and a clear target market that bottled water actively promotes high-quality, segmented and functional products to the public in terms of competition. And product quality, brand culture, water source, brand, landing ability and even appearance have become the key to determining the success of the brand.

　　"I hope that mineral water producers, regardless of their size, can actively do a good job in the’core ‘and find their own development model and development space." Zhao Yali, chairperson of the China Beverage Industry Association, said that due to the domestic conditions of mineral water development and the requirements of consumption upgrading, the domestic mineral water industry is seeking breakthroughs.