2024 Consumption Campaign!Nongfu Spring Takes the Lead in Expanding Production, Beverage Giants Accelerate "Staking Land"

(Photography by Zhou Mengting)

The battle between beverage giants has started on the first day of the year of 2024. On January 1, the news that Nongfu Spring spent 5 billion yuan to expand production capacity has attracted a lot of market attention. In fact, since last year, "horse racing" has become one of the busiest things for major beverage giants, in addition to Nongfu Spring, China Resources C'estbon, Dongpeng Beverage, Wang Laoji, etc. have invested hundreds of millions of yuan to expand production.

Among them, enhancing competitiveness and covering more market areas have become the main purpose of beverage giants to invest in production expansion. On January 4, Dongpeng Beverage told the "China Times" reporter, "The reason why Tianjin was chosen as a production base was an important consideration for covering North China. "For a long time, the competition between the beverage industry has never stopped, and the homogenization of products between enterprises is also more serious, and how to obtain more market share in the fierce competition has become the focus of beverage companies.

Giants are scrambling to expand production

On the first day of the new year, Nongfu Spring rolled up to expand production. On January 1, Nongfu Spring announced that on December 31, 2023, the company signed an investment agreement with the People's Government of Jiande City, Zhejiang Province on the "Nongfu Spring Jiande Drinking Water and Beverage Comprehensive Industrial Base Project", and the company obtained the right to use about 1,000 acres of industrial land, and promised that the total investment amount of the project is 5 billion yuan, and the project will be implemented in two phases and stages, and all investments will be completed within five years after the full delivery of the project land.

Nongfu Spring stated that the investment in this project aims to further expand the Company's production capacity and improve its ability to provide products and services to consumers by leveraging the Company's high-quality natural water resources of Qiandao Lake, leveraging the Company's brand and market position, thereby improving the Group's overall competitiveness and return on investment, and consolidating its leading position in the industry.

According to Zhu Danpeng, an analyst in China's food industry, Nongfu Spring's investment in this project is more to fulfill social responsibility. Zhu Danpeng told this reporter that "Nongfu Spring, as a Zhejiang brand, supports Zhejiang in the context of weak consumption and urgent need to stimulate domestic demand and increase consumption, which is their social responsibility as a Zhejiang enterprise." ”

As a leader in the field of packaged drinking water in China, Nongfu Spring has been accelerating its staking since 2023. In November 2023, Nongfu Spring announced that it would invest 200 million yuan to build a Nongfu Spring production base in Nixi Village, Bayi District, Nyingchi City, and would register and establish a holding subsidiary of Nongfu Spring; in October, the groundbreaking ceremony of major projects in Heyuan City, Guangdong Province and the groundbreaking ceremony of Nongfu Spring's third production base in Guangdong Province was held, with a project investment of 3 billion yuan; in September, Nongfu Spring Huangshan Base Project officially started, with a total investment of 1.25 billion yuan.

However, the expansion of production enclosure is not only happening in Nongfu Spring, but also beverage giants such as China Resources C'estbon, Dongpeng Beverage, and Wanglaoji are also not idle. It is understood that in November last year, China Resources C'estbon Wencheng production base project was officially settled in Wenzhou Wencheng Bailuzhou Water Economic Industrial Park, planning to invest in three pure water production lines; in August, Nanping Environmental Protection Bureau issued a document showing that China Resources C'estbon Beverage (Wuyishan) Co., Ltd. China Resources C'estbon Wuyishan production base project is located in Nanping City, Fujian Province, with a total investment of 370 million yuan.

Dongpeng Beverage is constantly busy going north, and on the basis of seven production bases in South China, including South China, and has laid out Zhejiang base and Changsha base, it has left a son in Tianjin. On November 4, it issued an announcement on the signing of an investment agreement and the establishment of a wholly-owned subsidiary with the People's Government of Jingwu Town, Xiqing District, Tianjin, and will invest in Dongpeng Beverage's Tianjin production base with a total investment of no less than 600 million yuan.

In addition, Wang Laoji is also actively expanding production. The reporter of "China Times" learned from Wang Laoji that on December 26, 2023, the Wanglaoji Longyan Base Project started, and two days later, the Nansha production base of Wanglaoji Health with an investment of about 750 million yuan was put into operation in Nansha.

According to Weng Shaoquan, chairman of Wanglaoji Health Company, Nansha production base is a comprehensive self-built base with scientific research, production, culture and other functions, covering an area of 196 acres, with a total planned construction area of more than 100,000 square meters and an investment of about 750 million yuan. Enabled by the company's digital strategy, the Nansha production base will become the "flagship factory of Wanglaoji", in which the blending system and warehousing and logistics system are the most advanced in the industry, and it is also the largest and most automated herbal tea production base in China.

Under the prosperity, the competition is more intense

In recent years, even during the epidemic, most beverage companies have bucked the trend and achieved relatively bright results. In 2021 and 2022, Nongfu Spring and Dongpeng Beverage have achieved rapid growth in both revenue and net profit, and the beverage business of Master Kong Holdings and Uni-President Enterprise China is also in a state of growth.

In 2023, as society fully returns to normal operation, the domestic economy will begin to recover, and consumer demand will rebound. According to the National Bureau of Statistics, from January to November, the total retail sales of consumer goods 427945 billion yuan, a year-on-year increase of 7.2%. Under the overall situation, beverage companies have basically achieved good performance.

In the first three quarters of 2023, Dongpeng Beverage achieved revenue of 8.641 billion yuan, a year-on-year increase of 30.05%, a net profit of 1.656 billion yuan, a year-on-year increase of 42.05%, and in the first half of 2023, Nongfu Spring achieved revenue of 20.462 billion yuan, a year-on-year increase of 23.3%, and profit during the period increased by 25.3% year-on-year In the first half of 2023, the beverage business of Master Kong Holdings and Uni-President Enterprise China also achieved growth, with revenue distribution increasing by 9.5% and 12.3% year-on-year.

Under the prosperity of performance, the beverage giants also have their own troubles. Zhu Danpeng told this reporter that although Nongfu Spring has developed well in recent years, its packaged drinking water has actually reached a bottleneck, but its beverage sector will still develop in the future. Nongfu Spring's business mainly includes packaged drinking water, tea drinks, functional drinks, and fruit juice drinks, of which packaged drinking water is its mainstay, but in the past two years, packaged drinking water has begun to show a weak state, and the growth rate of packaged drinking water in 2021 will be 22.14%, which will drop to 7.64% in 2022 and 11.7% in the first half of this year. In this case, the creation of the second curve is particularly urgent.

Dongpeng Beverage, on the other hand, has been desperate for nationalization, and in the first half of 2023, 34% of the company's revenue came from Guangdong. For last year's continuous investment in production expansion, on January 4, Dongpeng Beverage replied to the "China Times" reporter and said, "Because we are now also going national, the performance in recent years is very good, and the production capacity needs to be laid out in advance to prepare for the later market. ”

Wang Laoji told reporters that Wanglaoji Nansha production base has two filling production lines, a single line is 50% less than the traditional beverage factory, and the production speed can reach 36,000 cans / hour of a single line, after full production, the total annual output can reach 18 million TEUs, which will be a strong supplement to the production capacity and market demand of Wanglaoji herbal tea in South China.

The beverage industry has always been competitive. In the field of packaged drinking water, there are many beverage giants such as Nongfu Spring, China Resources C'estbon, Jingtian, Wahaha, etc., and the ready-to-drink tea track includes Nongfu Spring's Oriental Leaf, Wanglaoji, JDB, Wahaha Iced Tea, Tongyi Iced Tea, Vita Lemon Tea, etc., as well as Suntory, a brand from Japan, Dongpeng Beverage is also actively deploying in the field of sugar-free tea; Beverage giants such as Wahaha are also coveting the energy drink track.

As beverages become increasingly intense, improving core competitiveness is something that enterprises need to think about. In the opinion of industry experts, seizing the production base can effectively enhance its competitiveness. Lin Yue, chief consultant of Lingyan Management Consulting and an analyst of the catering industry, told this reporter that "it is very important for the head brand of beverages to seize limited natural water resources, on the one hand, to maintain the advantages of their own supply chain and establish a brand image, on the other hand, to enhance infrastructure is also conducive to balancing operating costs and covering more market areas." ”

Editor-in-charge: Huang Xingli Editor-in-chief: Han Feng