Nongfu Spring is a Chinese bottled water and beverage company headquartered in Xihu District, Hangzhou, Zhejiang province. It is owned and chaired by founder Zhong Shanshan As reported by Reuters, Nongfu Spring has filed an Initial Public Offering with the Hong Kong Stock Exchange seeking US$1 billion for a stake in the company. It has stated its intention to seek a listing in the third quarter 2020. As set out in it its prospectus, the company recorded revenue of 24 billion yuan in revenue in 2019, up from 20.47 billion yuan a year earlier. The prospectus shows Nongfu Spring recorded profit of 4.95 billion yuan in 2019, a 20.6% increase on its 3.61 billion yuan profit the previous year. The prospectus outlines that IPO funds are intended to be used to increase and develop its production, distribution and marketing capability and capacity, as well as explore market opportunities in overseas territories.
Impacts of COVID-19
The company announced its revenue and net profit decreased in the three months ending March 31, 2020, compared to the same three month period in 2019. Mainland production plants closed at Chinese New Year were returned to normal operation. In January 2020, Nongfu Spring announced it was providing water and other beverages to major hospitals in Wuhan, the epicenter of the COVID-19 pandemic. In February 2020, the company established beverage and food self-service stations around the country for people to access during the lock down.
History
The company was established on September 26, 1996. It launched its first packaged drinking water product in 1997 with water sourced from Zhejiang Thousand-Island Lake and became a joint stock company Nongfu Spring Co., Ltd in 2001. It developed and launched a range of beverage products, including Farmer’s Orchard, Scream and Oriental Leaf and used marketing slogans, most notably ‘a little bit sweet’ to popular effect. Through growth and acquisition Nongfu Spring has become China’s largest bottled water producer and a top three producer in the bottled tea and juice market According to Nielsen research data, Nongfu Springs natural water became in 2012 the most popular bottled water in China. On April 10, 2013, the Beijing Times accused the company of intentionally not adopting Chinese national water standards and instead adopting the lower standards of Zhejiang province. This started a dispute between the company and the newspaper. In November 2013, the company accused the Beijing Times of defamation and also filed a lawsuit in the Beijing Second Intermediate People's Court against the newspaper, which demanded 60 million yuan. In 2016, Chairman of the company, Zhong Shanshan, announced a new strategy to diversify the company and to globalize operations Nongfu Spring is part of the Yangshengtang group of companies, which also includes pharmaceutical companies Beijing Wantai and Hainan Yangshengtang Pharmaceuticals. Sponsorship of major sports has become a feature of Nongfu Spring’s marketing, and in 2019 Nongfu Spring signed a two-year deal with the International Swimming Federation as partner for FINA major events in 2020 and 2021. Nongfu Spring has diversified its product base to include coffee and tea beverages, fruit products, yogurt and rice. According to its prospectus, the soft beverage market in China in terms of retail sales value was RMB991.4 billion in 2019. It is forecast to reach RMB1,323 billion by 2024.
Products
Nongfu Spring’s first packaged drinking water product was launched in 1997. The company ceased to remove natural minerals from its bottled water in 1999 and marketed its water products as natural water. Nongfu Spring now offers a full range of water products from its 10 natural water sources across China. It is currently finalizing purchase of its first overseas water source and production facility, Otakiri Springs, in New Zealand. In 2003, it launched its Nongfu Orchard range of fruit drinks with fruit grains. The following year it targeted the teenage market with its range of ‘Scream’ drinks as it sought to expand its consumer base. In 2008, it launched water-soluble vitamin C drinks, Shuirong C100. In 2010, it launched "Victory Vitamin Water" beverage. In 2011, "Oriental Leaf" sugar-free tea beverage. In 2012, "Whisked Milk Tea" series of milk tea beverages. In 2014, the company launched its 17.5°oranges, its first entry into the fruit matket and an expansion of its product offering. In 2015, "Nongfu Spring" Natural Mineral Water,"Nongfu Spring" natural drinking water, and "Nongfu Spring" natural mineral water with the sports cap. In 2016, "Nongfu Spring" Natural Mineral Water, 17.5°NFC 100% Orange Juice & Apple Juice, Tea π, Fruit flavored soft drink. Nongfu Spring 100% NFC Orange Juice, Apple Banana Juice & Mango Blended Juice. In 2018, in response to consumer demand, the company expanded its range of natural water products to include a 12L disposable barrel. In 2019, Nongfu Spring it entered the coffee market for the first time with its TanBing range of coffee products.
Awards
In 2015 Nongfu Spring Natural Mineral Water received 5 top international design awards:
6 May 2015, The Dieline Awards 2015 1st Place for Non-Alcoholic Beverages,
21 May 2015, D&AD – Wood Pencil award,
29 May 2015, Best Design Award and the Gold Award in the Non-alcoholic Beverage Packaging Design Category, in the 17th International Food and Beverage Creative Excellence Awards.
