Nongfu Spring, which sells water to the market, has many secrets you don’t know about.

Recently, the China Securities Regulatory Commission approved Nongfu Spring to not exceed 1.38 billion overseas listed foreign shares. After completing this issuance, Nongfu Spring can be listed on the main board of the Hong Kong Stock Exchange.

Nongfu Spring is a brand that everyone knows, but there may be many secrets behind this company that you don’t know.

As a beverage company, Nongfu Spring’s ability to make money is beyond imagination.

Nongfu Spring’s annual revenue is nearly 25 billion, and its gross profit margin for drinking water reaches 60. The average unit price of mineral water is 2 yuan per bottle, and the gross profit can reach 1.2 yuan.

The cost of drinking water itself is not high. The raw material is water and does not require "production". Most of the cost is in packaging and transportation. The industry joked that it was better to sell bottles than water.

Since its establishment, Nongfu Spring has laid out many water sources and established production bases near the water sources so that local materials can be obtained. Such a multi-site layout plan can not only cover the national market supply, effectively shorten the transportation radius and reduce the time for products to be transported from the production line to the shelves, but also control logistics expenses and ensure profit levels.

Nongfu Spring’s prospectus shows that in 2017, 2018 and 2019, Nongfu Spring’s revenue was 17.4 billion yuan, 20.4 billion yuan and 24 billion yuan respectively. The year-on-year revenue growth rates in 2019 were 17.1 and 17.3 respectively. During the same period, Nongfu Spring’s adjusted net profits for the year were 3.3 billion yuan, 3.6 billion yuan, and 4.9 billion yuan respectively.

This revenue capability makes it one of the most profitable companies in China's soft drink industry. In the bottled water industry, Nongfu Spring has a market share of 26%, followed by C'estbon, Baisuishan, Master Kong, Binglu, and Wahaha.

In addition to mineral water, Nongfu Spring also has many other beverage products, such as functional drink "Scream", tea drink Oriental Leaf, NFC , vitamin water, Nongfu Orchard, water-soluble CIOO, etc. Although there are many categories, Nongfu Spring’s main source of income is still bottled mineral water.

As a necessity, water has a large number of users, but its differentiation is also very weak.

If you want to sell water well, the key is to find differences and establish your own competitive barriers, and Nongfu Spring happens to be the best at this point.

Nongfu Spring used the concept of "natural water" for the first time. At that time, when everyone was promoting pure water, Nongfu Spring actually took a different approach, saying: Experiments have proved that pure water Not good for health, all natural water will be produced from now on.

Nongfu Spring has been marketing around the concept of "natural and healthy". For example, when it was doing Nongfu Orchard, Nongfu Spring claimed that it had found the top fruit suppliers in the country. Find suitable production bases around the world and invest a lot of research to become a "self-operated" supplier.

Placing experimenters in white coats in advertisements can easily make people have a favorable impression of the quality of Nongfu Spring.

But in fact, the water source of Nongfu Spring has been exposed to water pollution incidents. As for juice, because users cannot see the fruit Therefore, it is an open secret in the industry to use cheap, poor-quality fruits as raw materials and add a large amount of sugar in the later stage. Nongfu Spring’s promotion is more of “just talk.”

Nongfu Spring knows how to take care of "face" and the importance of "face".

Nongfu Spring’s marketing capabilities have been fully demonstrated since the launch of TV advertisements in the 1990s.

The first is the slogan, in addition to "Nongfu Spring, a little sweet" and "We do not produce water, we are just porters of nature!", and then "Every drop of water All have their origins.” Nongfu Spring’s genius in copywriting design is also shown in other product lines, such as “Nongfu Orchard, shake before drinking”? , all catchy, with textbook-level magic and brainwashing.

Nongfu Spring used the most eye-catching red in its design. In the bottled water market at that time, blue, white, and green were the dominant colors. A breakthrough was achieved.

In addition, Nongfu Spring is also very careful in some designs, such as making retractable bottle caps, which can be drunk without touching the bottle mouth. It has also been implanted in the World Cup by Nongfu Spring The advertisement advocated hygienic drinking water in schools and sports venues, which became a hit.

Suisui is a relatively low-key entrepreneur. He is now the actual controller of more than 100 companies, covering pharmaceuticals and health care. products, drinking water and many other fields. The well-known Turtle Pills, Qingzui Lozenges, Happy Growth, Mother Brand Beef Sticks, Duoer Capsules, etc. are all products of the company he holds.

Going public is considered a sign of a company becoming bigger and stronger, and among the many companies in Suisui, Nongfu Spring is the most powerful One company, in fact, as early as 2003, Nongfu Spring was designated as a listed company by the Zhejiang Securities Regulatory Bureau. In 2008, it signed a listing guidance agreement with CITIC Securities.

Regarding the rumors of listing, Zhong Suisui only responded: "There is no demand for Nongfu Spring, so it does not need to be listed." Now, Nongfu Spring has finally become an industry giant and embarked on the road to listing.

However, compared with Coca-Cola and Moutai, Nongfu Spring does not have such a strong advantage. It has no secrets or patents in its formula, and it cannot achieve the same premium level as Moutai.

Picture from a very handsome investor

Nongfu Spring’s “Top 10 Water Sources” have become its signature. It includes 4 mountain springs, 1 deep groundwater, 2 mineral water, 1 deep reservoir water and 2 deep lake water.

However, these water sources are not owned by the company, and they have also begun to be peeped by other companies. Yili invested 744 million yuan to build a mineral water project in Changbai Mountain, Jilin, China Resources C'estbon and Wahaha also A similar layout started.

Among the company’s risks, the instability of water sources is listed as a very important factor. “We continue to look for new high-quality water sources to lay the foundation for future business development. "said the prospectus.

But no matter what, drinking water is still highly substitutable. Nongfu Spring can work hard on packaging and marketing, but it cannot be Evian and cannot obtain higher premium capability. It can only maintain people's awareness of its brand through constant advertising and marketing.

From this perspective, Nongfu Spring has not changed much from the 1990s to the present and even further into the future. It is just that after its listing, it has changed from "a bit "Sweet" became "a little rich".