Recently, Nongfu Spring, known as the “porter of nature,” has found itself in the midst of controversy. It all started when a brand expert publicly stated in a forum that “natural water is reservoir water” and “Evergrande Ice Spring has better water quality than Nongfu Spring.” Not long ago, Nongfu Spring had just announced a 50-billion-yuan investment to build a comprehensive industrial base for drinking water and beverages in Zhejiang, relying on natural water resources.
Suddenly, the debate over the superiority or inferiority of natural water and mineral water became a focal point. Industry analysts pointed out that statements like “Evergrande Ice Spring has better water quality than Nongfu Spring” could hold some ground to a certain extent, but it’s not a blanket statement as there may be differences in the specific quality of mineral water and natural water in different regions.
Natural Water = Reservoir Water?
On January 21, 2024, during the annual character summit of the 2023 China Brand Festival, brand positioning expert Gu Junhui publicly stated in a keynote speech, “I asked many people, what kind of water is Nongfu Spring? More than 50% answered mineral water and spring water. They don’t even call themselves mineral water; they say it’s natural water, acting as the porter of nature. What is natural water? Isn’t natural water just reservoir water?”
Regarding the quality of water, Gu Junhui further cited Evergrande Ice Spring as an example, claiming that it comes from Changbai Mountain, one of the world’s three major water sources, and is far superior to Nongfu Spring in terms of water quality. He emphasized the importance of storytelling, taking inspiration from Nongfu Spring, stating, “Nongfu Spring teaches us the first thing is to choose a good name unless you are the leader in this industry; otherwise, consumers won’t remember.”
Gu Junhui’s statement caused a stir. Nongfu Spring is a well-known brand and a leading enterprise in the bottled water and beverage industry. Evergrande Ice Spring was once a brand under Evergrande Spring Water Group and is now a natural mineral water brand under Cuilin Spring Water Group.
In terms of scale, Evergrande Ice Spring and Nongfu Spring are not comparable. In the first half of 2023, Nongfu Spring achieved a total revenue of about 20.462 billion yuan, a year-on-year increase of 23.3%. Packaged drinking water products generated revenue of about 10.442 billion yuan, a year-on-year increase of 11.7%, accounting for 51.0% of the total revenue. Evergrande Ice Spring incurred losses for three consecutive years, with a total loss of 4 billion yuan. The brand was eventually sold for 1.8 billion yuan, with the highest annual sales reaching only 1.09 billion yuan.
Regarding water quality, Nongfu Spring’s customer service responded to Gu Junhui’s statement by stating that the label clearly indicates it is natural water, and the relevant labels undergo strict national scrutiny. They considered Gu Junhui’s statement as freedom of speech and stated that they have no right to interfere unless it affects the company, in which case they would report it to higher authorities.
Jiang Han, a senior researcher at Pangu Think Tank, said, “Evergrande Ice Spring’s water quality does belong to mineral water. It comes from deep underground, contains rich minerals. However, this advantage is not absolute because mineral water and natural water in different regions may have differences in specific quality.”
Long-standing Water Quality Dispute
The “water business” has been jokingly referred to as nature’s money-printing machine. Both Zong Qinghou and Zhong Shanshan became China’s richest individuals by selling water. However, the fierce battle around water quality in the industry has never ceased.
Nongfu Spring was the first to introduce the concept of “natural water” to the industry. In 2000, when the purified water market was nearing saturation, Nongfu Spring differentiated itself from other companies producing “purified water” by promoting the concept of “natural water” and claiming that “purified water is groundwater, while natural water is water from natural sources.” Nongfu Spring’s founder, Zhong Shanshan, once claimed that scientific experiments proved that long-term consumption of purified water is not beneficial to health. Since then, Nongfu Spring stopped producing purified water and focused only on natural water.
In 2000, Nongfu Spring planted water lilies separately in purified water and natural water. The result was that water lilies grew faster in natural water than in purified water. Nongfu Spring’s strong marketing campaign firmly established the idea that “natural mineral water is superior to natural water and purified water” in consumers’ minds.
According to the official website of Nongfu Spring, water can be roughly classified into four categories based on its source: natural water, natural mineral water, drinkable purified water, and other drinkable water. Natural water is described as originating from wells, mountain springs, reservoirs, lakes, underground springs, or high mountain glaciers. Natural mineral water is naturally outflowing or collected through drilling from deep underground, containing specific amounts of minerals or trace elements. Drinkable purified water comes from surface, underground, or public water supply systems and does not contain minerals or trace elements. Other drinkable water refers to packaged drinking water other than natural water, natural mineral water, and drinkable purified water, which may contain artificially added minerals.
Evergrande Ice Spring’s official website states that its deep mineral water series belongs to drinkable natural mineral water. It selects high-quality natural water sources, directly extracts water from the source, and only performs necessary treatments on the original water. Some mineral content exceeds the national standard for drinkable natural mineral water (GB8537). The water contains potassium, sodium, calcium, magnesium, and silicic acid, among other minerals essential for the human body, suitable for long-term consumption.
Jiang Han stated that Nongfu Spring’s concept of “natural water” gives it a certain advantage in water quality. Natural water’s source is from the surface, such as mountain springs, reservoirs, underground water, etc. After natural filtration and mineralization, it contains certain minerals and trace elements. Compared to purified water, natural water is more in line with the mineral composition required by the human body. However, compared to mineral water, natural water’s mineral content may be lower. Therefore, Nongfu Spring’s natural water has a certain advantage in water quality, but the specific quality needs to be judged based on the water source and product testing results.
Regarding the conclusion that “Evergrande Ice Spring has better water quality than Nongfu Spring,” Wu Daiqi, CEO of Shiqi Cheng Company in Shenzhen, believes that without third-party testing and comparison of the water source of the products produced by the enterprise, such a conclusion cannot be drawn.
Accelerating Land Grab
In recent years, Nongfu Spring has shown strong overall development momentum, opening up a “second growth curve” in the beverage sector. However, in the drinking water sector, it seems to have reached a certain bottleneck and still needs to expand production capacity to maintain market competitiveness.
At the beginning of 2024, Nongfu Spring announced signing an investment agreement with the People’s Government of Jiande City, Zhejiang Province, for the “Nongfu Spring Jiande Drinking Water and Beverage Comprehensive Industrial Base Project.” They agreed to obtain the right to use about 1,000 acres of industrial land through bidding, with a total investment of 50 billion yuan for the project. Since its listing, Nongfu Spring has been continuously exploring water sources, with 12 water sources so far, including Qiandao Lake in Zhejiang and Wanlv Lake in Guangdong.
However, in the current natural water industry, Nongfu Spring is no longer the only player. Starting from 2015, domestic natural mineral water brands have continuously emerged. In addition to the naturally advantaged Baisha Mountain, in 2022, China Resources C’estbon launched the drinkable natural mineral water “C’estbon Lu.” In addition, Yueni Senlin launched the “Youku” natural soft mineral water, and Yili Group introduced the “Yike Huoquan” natural mineral water, all attempting to enter the water market.
As the new concept of natural mineral water stirs up the market, Nongfu Spring has also introduced corresponding products to respond. In 2021, Nongfu Spring launched “Changbai Snow,” a natural snow mountain mineral water, claiming to originate from a self-flowing cold spring less than 60 kilometers from Tianchi in the original forest of Changbai Mountain. After 30-60 years of deep volcanic basalt filtration and natural purification, it is a low-sodium, silicic acid-type natural snow mountain mineral water.
Jiang Han stated that Nongfu Spring, with its slogan “We don’t produce water; we are just the porter of nature,” has deeply resonated with people. This advertising slogan has successfully shaped Nongfu Spring’s natural and healthy brand image. As one of the earlier bottled water brands in China, Nongfu Spring has high brand awareness and market share, and consumers have a high level of recognition and loyalty to the brand.
Wu Daiqi believes that for water and beverage products, their nature as low-cost and consumable products is an important factor for their success. While brand positioning is crucial, other aspects such as the company’s distribution capabilities, product visibility, and reasonable pricing are also essential and should not be overlooked.
On January 24, in response to issues like “natural water is reservoir water,” Beijing Business Daily sent an interview request via email to Nongfu Spring, but as of the time of writing, no response has been received.