Laoshan coke slogan

It has been confirmed that Nongfu Spring is listed in Hong Kong!

As the most profitable bottle of water at present, Nongfu Spring started its official IPO on August 25th, and will be listed on the main board of Hong Kong Stock Exchange on September 8th with the code "9633".

Nongfu Spring was established in 1996, mainly producing packaged water.

From the slogan "Nongfu Spring is a little sweet" in 1997 to "We don't produce water, we are just porters of nature" in 2008, and then to "What kind of water breeds what kind of life" in 20 17. All along, Nongfu Spring has created a healthy and natural brand image, which can always be deeply rooted in people's hearts with warm and interactive brainwashing advertisements.

At present, Nongfu Spring has surpassed Wahaha, Master Kong and Ipoh to become the leading enterprise of packaged drinking water and beverages in China, and has been the champion of packaged water in China for four consecutive years from 20 16 to 20 19.

So, how much did Nongfu Spring earn from this bottle of water?

As can be seen from the prospectus, the gross profit margin of Nongfu Spring has basically remained at 55%-60% in recent years. Compared with beer, one of soft drinks, the gross profit margin of Nongfu Spring is about 20% higher than that of major domestic beer enterprises, which is basically close to the gross profit margin level of high-end beer.

To put it bluntly, a bottle of Nongfu Spring with a cost of about 60 cents can earn a gross profit of 1.2 yuan by selling it in 2 yuan. At present, the only soft drink that can think of such huge profits is Coca-Cola, which Buffett has always praised at every shareholders' meeting.

In this case, is packaging water a good business?

The characteristics of each market in each country may be different, but in the China market, this is definitely a good business.

Why is this a good business? The main reasons are as follows:

First of all, packaged water is a rigid demand of consumers in China. Because adults need to consume at least 65,438+0,500-2,000 ml of water every day, about 50% of which is direct drinking water, which determines that its market space is bound to be huge.

A phenomenon can prove that the domestic packaged water market has grown rapidly from less than 654.38 billion yuan in 2000 to 2065.438 billion yuan in 2065. In addition, in 20 15, packaged water surpassed tea drinks to become the largest category of soft drinks.

Secondly, brand, water source and health attributes make the premium of packaged water very obvious. In terms of profit distribution, the retail price of a bottle is1.The ex-factory price of bottled water in 5 yuan is about 0.6 yuan. However, with the help of brand, water source and health attributes, the price can soar by 2-3 times. Obviously, the profit margin is also very rich.

Finally, the business model of packaged water is extremely simple. The business model of packaged water is characterized by single raw material composition, simple production process, long shelf life and no excessive cost. Because water is worthless, the cost of packaging water mainly comes from bottle PET, packaging materials, manufacturing costs and labor costs. Except water, it accounts for about 90% of the total cost.

Take a bottle of Nongfu Spring in 2 yuan as an example. The ingredients list only indicates "natural water", the water source category is deep lake water, and the shelf life can reach 1-2 years. It is also very simple to turn the water transported from nature into a bottle of Nongfu Spring, and the production process only needs to go through the simple procedures of "water intake inspection, filtration, sterilization and canning".

In addition, the fact that packaging water can make so much money is actually caused by barriers to entry. The extremely high industry barriers make the number of packaged water enterprises very small.

The entry barrier of packaged water is mainly reflected in the qualification of obtaining water source exploitation license.

China law has long stipulated that units that directly take water from natural resources must apply for licenses. For example, if you want to sell mineral water, you need to have a good water source, and the exploration, development and utilization of water source must obtain the national "mining license". However, it is not easy to obtain a "mining license", especially in recent years, due to the intensification of environmental pollution, the number of water sources is decreasing, and the water sources that can develop superior mineral water are becoming increasingly scarce. This makes the auction price of "mining license" very expensive.

According to a news report in May, 2014, the starting price of mineral water exploration right for Baijiangquan in Jingyu County at the foot of Changbai Mountain in Jilin Province was 50,000 yuan, but it was finally auctioned at a sky-high price of 65.438+0.5 billion yuan, making it the most expensive mineral water exploration right in China history.

Since packaged water is so profitable, is there room for growth in the future?

According to statistics, in 20 19, the per capita consumption of packaged water in China was 3 1. 1 liter, which was lower than the world average, while the per capita consumption of packaged water in the United States was 108.4 liter, which was 3.5 times that of China, and that in South Korea and Japan was 58 liters and 37.4 liters, respectively, which was 65,430 liters of China.

It is worth mentioning that due to geographical and environmental factors, the water quality in the United States tends to be hard water, so it cannot be directly drunk, so the consumption of packaged water is very huge. However, because many places such as parks and entertainment places have built direct drinking water supply systems, there is not much difference in per capita consumption of packaged water between Japan and China.

As the water supply system in China has not reached the standard of direct drinking, it is estimated that with the increase of per capita income, the per capita consumption of packaged water will be between South Korea, Japan and the United States. As a portable and reasonably priced beverage, packaged water will be more and more favored by consumers in the future.

It can be said that the packaging water industry is still in the incremental stage.

What is the industry structure behind the packaging water business?

Let's talk about history first.

The history of domestic packaged water can be traced back to Laoshan mineral water in the 1930s. Laoshan mineral water was the first packaged aquatic product at that time. After the founding of New China, it was nationalized, and it was the only packaged water brand in China until 1980s.

1987, the national standard GB8537-87 "Drinking Natural Mineral Water" is a turning point in the packaging water industry.

Next, packaging water follows the trend of the times and presents several different development stages.

1980- 1990 mid-term, coconut tree, Yili, Wudalianchi and other mineral water plants were established one after another, and the output of bottled mineral water reached its peak, among which the national market share of Yili bottled water reached more than 15%.

1995-2005, domestic TV sets became popular, and packaging water entered the era of large circulation.

Wahaha, Master Kong, Robust, Nongfu Spring, etc. Entering the bottled pure water market, and educating consumers by putting in a lot of advertisements, the popularity has been further improved. The market mainly forms three brands of pure water, namely Wahaha, Master Kong and Robust, commonly known as "the third strong", among which Wahaha is the packaging faucet. At the same time, foreign brands Nestle and Lu Bing entered China. Danone 1996 established a joint venture with Wahaha, and 1998 acquired Yili.

In 2000, Nongfu Spring announced that it would no longer produce pure water, but introduced the so-called "natural water", which triggered a cross-century water resources war with the strategy of low price, and blatantly confronted the industry giants Wahaha and Robust.

However, at this time, consumers also realized the concept of "natural water" for the first time and began to pay more attention to the health, naturalness and safety of daily drinking water. The market share of Nongfu Spring has increased rapidly, surpassing Robust, second only to Wahaha and Master Kong.

In 2004, Master Kong introduced the concept of "mineral water", imitated Nongfu Spring, and launched the "Second Water War", replacing Wahaha as the packaging leader in one fell swoop. However, in 2008, the "Shuiyuanmen" incident caused social concern, and the brand of Master Kong stopped, and sales continued to decline.

In 2007, another Ipoh was born in Guangdong and grafted with China Resources, becoming a leading brand in South China. At the same time, the process of nationalization was initiated, and the strategy of "westward expansion, eastward expansion and northern expedition" was formulated. In 2009, Ipoh ranked fourth in the packaged water market.

Since 20 13, Jing Tian Baisui Mountain Sword, which has positioned itself as an "aristocrat in the water", has begun to tilt, focusing on the middle and high-end market, and its market share has actually increased substantially. In 20 18, Jing Tian Baisui Mountain successfully surpassed Master Kong with a market share of 10. 1% and became the top three in the industry.

In 20 14, the 2 yuan water age came, and Nongfu Spring and Ipoh replaced Master Kong and Wahaha to become the leaders in the packaging water industry. The packaged water market has evolved into two super powers.

20 15 on the occasion of the 30th anniversary of Ipoh's founding, the brand positioning was upgraded to the level of humanistic marketing, and the slogan was changed to "Purely Heart, Go to Beauty", and it was promoted in cooperation with offline activities such as "Baiku" public welfare project, so as to build a bridge to communicate with consumers and realize rapid market expansion. In that year, the sales of packaged water exceeded/kloc-0.00 billion yuan, and the market share reached 20.8%, surpassing Nongfu Spring for the first time.

However, after 20 15, Nongfu Spring's market share continued to increase substantially through "water source layout+innovation ability+brand building+channel network" and began to widen the gap with Ipoh. At this point, the duopoly has evolved into a duopoly pattern of Nongfu Spring.

However, it can be seen that from the appearance of 1980 to the following 40 years, the packaging faucet is constantly changing.

At present, the six giants of packaging water occupy 80% of the industry, and their market share from high to low is Nongfu Spring (26.5%), China Resources Ipoh (265,438+0.3%), Baisui Mountain (65,438+00.65,438+0%) and Master Kong (9.9%). Among them, Nongfu Spring, Yibao and Baisui Mountain constitute the "new top three" in the packaged water market, with CR3 reaching 60%.

Although the industry concentration of packaged water is very high now, the industry pattern is actually unstable. The main reason is the just-needed shock and consumption upgrade.

The just-needed impact means that there is still a lot of room for growth under the current low per capita consumption. Moreover, at present, the main market of domestic packaged water is mostly concentrated in the low-end field. The prices of natural mineral water, such as Evian and Parisian water, are all between 10 and 15 yuan/bottle, and the consumption scenes are mainly family and high-end business activities, which is difficult to achieve. However, after the rise of the middle class in the future, with people's increasing attention to drinking water health, high-end natural mineral water will also be welcomed. By then, the trend of high-end packaging water may change the current packaging water market structure again.

(The article comes from: analyzing investment)