Nongfu Spring to Expand Nonwater Beverage Segments to Offset Near-Term Headwinds for Packaged Water

Nongfu Spring upholds its market leadership in the packaged water market in China through scalable distribution and production network. In a commoditized category with high price elasticity, Nongfu Spring strives to control costs such that a balance can be achieved between properly incentivizing channel partners and generating economic profits for the company. Through endeavors in product development and brand building, Nongfu Spring has expanded from packaged water to nonwater ready-to-drink, or RTD, beverages such as tea, functional and juice beverages. These nonwater categories have contributed almost half of the revenue growth for the company in the past five years. Notably, the company has expanded its tea segment in recent years led by sugar-free products.