Nongfu Spring
| Company type | Public |
|---|---|
| Industry | Bottled water, soft drinks, beverages |
| Founded | September 26, 1996 |
| Founder | Zhong Shanshan |
| Headquarters | Hangzhou , China |
Area served | China, expanding internationally |
Key people | Zhong Shanshan (Chairman) |
| Products | Bottled water, soft drinks, tea beverages, fruit products, yogurt, coffee, rice |
| Parent | Yangshengtang group |
| Website | www |
Nongfu Spring (; literally "farmer's mountain spring") is a Chinese company specializing in bottled water and soft drinks, with its headquarters located in Xihu District, Hangzhou, Zhejiang province. Established and led by Zhong Shanshan, the firm generated revenues of $3.4 billion in 2019. Nongfu Spring is listed on the Hong Kong Stock Exchange under the ticker symbol 9633.
History
Nongfu Spring was established on September 26, 1996, and introduced its first packaged drinking water product in 1997, sourcing from Zhejiang's Thousand-Island Lake. It transitioned into a joint stock company by 2001. In 2020, the company launched its initial public offering on the Hong Kong Stock Exchange, successfully raising about US$1 billion by setting the share price at HKD 21.50, the highest point of its anticipated range.
The company broadened its beverage offerings with brands such as Farmer's Orchard, Scream, and Oriental Leaf, employing marketing campaigns like ‘’a little bit sweet’’ to enhance brand awareness. Through a combination of organic expansion and acquisitions, Nongfu Spring became China's leading bottled water manufacturer and secured a position among the top three producers in bottled tea and juice sectors.
By 2012, data from Nielsen identified Nongfu Spring as China’s most favored bottled water brand. In 2013, the firm encountered controversy regarding water quality standards but countered by initiating a defamation suit against the Beijing Times.
In 2016, Chairman Zhong Shanshan revealed plans for diversification and global expansion. Nongfu Spring operates under the Yangshengtang group umbrella, which also includes pharmaceutical companies Beijing Wantai and Hainan Yangshengtang Pharmaceuticals.
In 2018, activist Nut Brother utilized Nongfu Spring bottles in an exhibition aimed at raising awareness about pollution in rural areas.
According to its 2020 prospectus, Nongfu Spring recorded revenue of 24 billion yuan (approximately US$3.4 billion) in 2019, an increase from 20.47 billion yuan the previous year, with net profit growing by 20.6% to reach 4.95 billion yuan.
Sponsorships constitute a significant part of the company's marketing strategy; notably, Nongfu Spring secured a two-year agreement with the International Swimming Federation (FINA) for prominent events held in 2020 and 2021.
The company has diversified into categories including coffee, tea beverages, fruit products, yogurt, and rice. Nevertheless, revenue and net profits declined during the first quarter of 2020 due to disruptions caused by COVID-19, with production resuming after closures related to the Chinese New Year.
In September 2020, Nongfu Spring completed its IPO on the Hong Kong Stock Exchange at HKD21.50 per share, raising approximately US$1 billion at the upper limit of its pricing range.
Nashua property purchase
Concerns related to national security emerged following Nongfu Spring's acquisition of a commercial property in Nashua, New Hampshire. Valued at US$15 million but purchased for US$67 million, this site is situated near vital infrastructure including a water utility facility, the city's airport, defense centers, and a Federal Aviation Administration control center. This transaction sparked opposition from local Republican legislators and prompted proposals for legislation aimed at prohibiting property acquisitions by Chinese buyers within the state.
Products
Nongfu Spring introduced its inaugural packaged drinking water product in 1997 and, by 1999, discontinued the removal of natural minerals, promoting the water as naturally sourced from ten distinct locations throughout China. The company is in the process of completing the acquisition of Otakiri Springs in New Zealand, which will serve as its first international water source and production site.
Significant milestones in product development include:
- 2003: Debut of Nongfu Orchard fruit beverages containing real fruit bits; shortly after, the launch of ‘Scream’ drinks aimed at the teenage demographic.
- 2008: Release of Shuirong C100, a vitamin C-enhanced drink that dissolves in water.
- 2010: Introduction of "Victory Vitamin Water," a functional hydration option.
- 2011: Launch of "Oriental Leaf," a tea beverage free from added sugar.
- 2012: Rollout of the "Whisked Milk Tea" product line.
- 2014: Entry into the fresh fruit market with oranges featuring a 17.5° sugar content.
- 2015: Broadened bottled water offerings to include natural mineral water packaged in glass bottles and water formulated for infant consumption.
- 2016: Release of a special edition mineral water, expanded juice varieties such as 100% NFC orange, apple-banana, and mango blends, alongside tea π fruit-flavored teas and fruit-flavored soft drinks.
- 2018: Responded to consumer needs by adding a 12-liter disposable barrel to its natural water product lineup.
- 2019: Ventured into the coffee sector with the introduction of TanBing coffee beverages.
This extensive and varied product range exemplifies Nongfu Spring’s deliberate strategy to diversify beyond traditional bottled water into functional drinks, fruit products, and coffee, targeting a wider array of consumer preferences.