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Ask AI · Why Nongfu Spring is shifting to a laid-back strategy amid fierce competition?

At the 114th National Sugar, Wine, and Food Commodities Fair, the presence of “electrolyte water” has increased dramatically.

Chunqing, Li Zi Yuan, Evergrande Ice Spring, Mingren… almost all have placed electrolyte water in the most prominent position; meanwhile, this segment has become a highly contested battleground in the beverage industry, with giants like Nongfu Spring, Mengniu, How Bear Water, Eastroc Beverage, Uni-President… rushing to enter.

This scene inevitably reminds one of Nongfu Spring from earlier years, which once captured 50% of the electrolyte water market with the help of “aliens.” Just a month ago, Nongfu Spring’s Tang Binshen published an internal letter titled “Focus, Concentrate, and Respond to Changes Without Changing,” setting the work tone for the new year: “Don’t fuss, strengthen internal capabilities, and pursue practical results.”

But if you look closely at the beverage market, does Nongfu Spring still have an opportunity to be “laid-back”?

In summer 2025, the beverage market cooled sharply. Nielsen IQ data shows that from July to September, beverage sales declined year-over-year for three consecutive months, with September’s overall channel growth rate dropping to -9%, and offline channels declining even more sharply at -10.4%.

Meanwhile, competition among consumers has reached unprecedented levels. Taking electrolyte water as an example, since the explosive growth of the sports market and the trend toward healthier eating, from 2022 to 2025, there have been as many as 59 electrolyte products in China. In just the first five months of 2025, over 14 new products were launched.

In an era of rising new consumption, Nongfu Spring once dominated the spotlight. These past two years, it has been relatively quiet—yet with such a market environment, can Nongfu Spring truly practice “not fussing, responding to changes without changing”? This is a question worth exploring.

Can Nongfu Spring “stay put”?

Looking back at Nongfu Spring’s rise, it’s almost a story of rapid expansion driven by frequent product launches.

Before 2023, during the peak of new consumption, Nongfu Spring released over 30 new products annually. For example, its sparkling soda water, launched in 2018, quickly evolved into 30 different flavors. Categories like milk tea, electrolyte water, sugar-free tea, dairy tea, yogurt, plant tea… kept expanding. At its peak, the company launched 10 new products in a single month.

Nongfu Spring’s product retention standards were also very “realistic”: if a new product failed to achieve a 30% repurchase rate within six months, the company would reduce its production or operational resources, or even remove it from shelves.

Undeniably, in that era of consumption upgrading, this approach often yielded good results.

With a large and rapid update system, in 2018 Nongfu Spring’s sales grew by 300% year-over-year, with sparkling water helping the company’s full-year revenue surpass 200 million yuan. From 2018 to 2020, its growth rates were 300%, 200%, and 309%, respectively. By 2021, the growth began to slow.

That year, Nongfu Spring’s revenue growth rate declined by nearly 40%. In 2022, the year-over-year sales growth was only 20%. In subsequent years, Nongfu Spring rarely publicly disclosed specific revenue figures; even in 2025, the available information was only that overall performance maintained double-digit growth for three consecutive years.

For a company that once stood at the forefront of consumer trends, this is not a positive signal.

But what is certain is that after 2023, Nongfu Spring’s aggressive, “speed-only” strategy has become more restrained; its new product launch pace has slowed significantly. The cycle for new products extended from 8–9 months to 15–16 months, and the number of new products launched annually dropped to about one-third of 2022’s.

Currently, Nongfu Spring’s official website lists only Nongfu Spring, Alien, Haozizai, Iced Tea, and Dairy Tea.

In 2026, Nongfu Spring aims to further slow its update speed. The reasons for this are not hard to trace.

On one hand, stagnation in beverage innovation is a frankly ironic reality. In early 2026, the “lobster” meme swept the internet, causing the beverage market to “ride the wave” of hype. Brands like AmuXi, Fengxing Milk, Yili Miezhi… promoted their own “lobster” new products on social media.

Behind this unrelated “lobster” product frenzy is a reflection of the industry’s traffic dilemma amid weak innovation.

On the other hand, behind an ordinary bottle of beverage, multiple core raw materials are involved—cane sugar, PET resin, paper cartons, etc. According to data from Haitong Securities Research Institute, in the cost structure of the soft drink industry, manufacturing and labor account for 20%, PET 20%, paper cartons 20%, white sugar 15%, fruit juice 10%, and other raw materials 15%.

Coupled with persistently high marketing costs, the gap between the cost of launching new products and their results has begun to make companies more cautious.

However, if Nongfu Spring actively slows down, can this high-speed company truly become “laid-back”?

In fact, although Nongfu Spring has slowed its pace of new product launches, it has never given up competing for market share. The “2025 Beverage New Products TOP100” shows that Nongfu Spring and Master Kong each have 9 new products on the list, tying for first place. Nongfu Spring’s entries include 5 functional drinks, 4 ready-to-drink teas and milk teas, and 1 traditional Asian beverage.

And the industry’s competitive landscape does not allow Nongfu Spring to truly settle down without “fussing.”

Q3 2025 data shows that mainstream beverage categories generally experienced a “three declines” in sales value, units, and order volume, but the overall pace of new product iteration reached an unprecedented level. About 700 new beverage products were launched in 2025, averaging two per day.

For example, in the nutrition segment:

WinNow Intelligence shows that from Q1 2023 to Q4 2025, the number of companies supplying nutrition drinks increased from 21 to 31, a 48% increase; brand count grew from 31 to 53, a 71% increase; SKUs increased from 210 to 356, a 70% rise; in Q1 2025 alone, 32 new products were launched.

This will lead to more intense homogenous competition and channel resource battles for Nongfu Spring’s Wei B water and Wei C water.

Of course, Nongfu Spring’s product streamlining is fundamentally aimed at optimizing resource allocation and focusing efforts on key segments to achieve breakthroughs. But under the “no progress, no retreat” rule of the beverage jungle, it may not be able to focus solely on that. At the end of March, Nongfu Spring held its second “Create Camp 2044” in Xianning, Hubei.

All signs indicate that behind the seemingly calm and slowed rhythm, Nongfu Spring has never relaxed its sense of urgency to race.

Old track “hijacked” by milk tea

There’s no denying that beverages have always been one of the better-performing categories within fast-moving consumer goods. Nielsen IQ data shows that from May 2024 to April 2025, the year-over-year growth in sales value across all channels reached 8.0%, making it one of China’s most stable growth FMCG categories.

The turning point came in the second half of 2025.

Beyond sales data, production figures are also not optimistic. According to the National Bureau of Statistics, in Q3 2025, soft drink output showed a clear downward trend, with the decline widening month by month: July’s output fell 0.17% YoY; August’s fell 6.79%; September’s further dropped by 10.12%.

This decline is directly related to last summer’s fierce delivery and ordering battles.

Even when Uni-President’s beverage revenue in Q3 declined YoY, management attributed the pressure to “the delivery battle.” Similarly, Yili’s mid-2025 earnings report acknowledged a slump in packaged liquid milk, citing the substitution effect of tea drinks.

Today, the craze for milk tea has largely subsided, but the link between bottled drinks and new-style tea drinks seems to have been planted here.

In 2025, besides Nongfu Spring, major players like Master Kong, Uni-President, Coca-Cola, Mengniu… all saw some decline in performance or market share. Among them, Uni-President China’s beverage revenue in H2 2025 fell 5.8% YoY.

By contrast, the new tea-drink industry, based on retail sales, is projected to grow from 421.3 billion yuan in 2022 to 1,180.5 billion yuan in 2028, with a CAGR of 18.7%. Groups like Mixue, Guying, Chabaidao, Shanghai Auntie, and Naixue’s Tea have combined revenues over 60 billion yuan and net profits exceeding 10 billion yuan.

A stark contrast is this: although the consumer market has generally become more rational, and ready-to-drink tea has gradually returned to its original prices after ending delivery bonuses, bottled drinks costing just a few yuan are still cheaper and more convenient—so why does the entire consumer market continue to be “hijacked” by coffee and milk tea?

Even without the delivery battle, as early as 2023 and 2024, ready-to-drink coffee and milk tea held less than 2% market share on average. Ready-to-drink coffee declined 13.48% YoY, and milk tea fell 5.91%. In their place, in-store fresh milk tea and coffee are gaining popularity.

The rise of one and the fall of the other—the redefinition of value for money between them is the most direct impact.

Currently, although ready-made tea drinks have actively ended the “9.9 era,” the days of paying 20 or 30 yuan for a cup are gone forever. GaoYan Technology shows that among the TOP20 tea chain brands, three have an average customer spend under 10 yuan, ten brands between 10 and 15 yuan, and only seven above 15 yuan.

But bottled drinks are getting more expensive each year. Beverages under 3 yuan are nearly extinct; 5–6 yuan is the mainstream. The unit prices for categories like ready-to-drink coffee, fruit juice, and vegetable juice are generally around 7–8 yuan. Even Kangshifu’s “value king”—its 1L iced tea, green tea, and jasmine honey tea—has increased from 4 yuan to 5 yuan.

Second, the lack of scenarios and social attributes has caused traditional beverages to lose their appeal among young consumers.

BoSEN Consulting shows that 63% of new-style tea drink consumers have stable consumption intentions. Going shopping (41.6%) and afternoon tea (39.6%) are the main scenarios. The widespread use of instant delivery has allowed milk tea to penetrate all scenarios, including work and home, while the functional scenarios for bottled drinks are relatively limited.

Traditional beverage giants may also have noticed this and started creating more scenarios—home, social, camping, office… In 2025, DIY cocktail-making became a social media craze. The “Nongfu Spring Cocktail Relay Challenge” garnered over 510 million views. Nearly 30,000 convenience stores nationwide set up dedicated sections for cocktail ingredients or bundled sales.

But whether this can deeply match the emotional and social needs that ready-made tea drinks fulfill—and their native capacity to carry those needs—remains uncertain.

Additionally, like traditional beverage tracks, new products in ready-made tea drinks continue to emerge.

The “2025 China Beverage Industry Research Report” shows that in recent years, Heytea’s annual new product counts were 60, 63, and 48. Guying’s were 55, 70, and 51. Chabaidao’s were 43, 53, and 60. In 2024, 201 new elements were used across sampled brands of ready-made drinks.

Even Luckin Coffee, on its own, occasionally launches viral products—from coconut lattes and little yellow butter Americanos to the triple coconut and coconut egg in spring 2026. On March 31, the limited-edition coconut egg even trended on social media. The siphon effect continues to generate buzz, attract traffic, and lock in consumers’ fickle tastes.

Ultimately, the traditional beverage track is gradually fading from consumer awareness.

Should Nongfu Spring “change”?

Of course, as a trillion-yuan market, no matter how it cools, it cannot change one fact: capital and consumers have never truly abandoned this track.

First, on the capital side. From January to June 2025, ten new consumption projects completed billion-yuan funding rounds. Food and beverage remain the main focus; in the first half, five funding events occurred in the beverage sector. In 2026, the market is clearly heating up. January–February retail sales of consumer goods reached 8.61 trillion yuan, up 2.8% YoY, with the growth rate accelerating by 1.9 percentage points compared to December.

This indicates that the potential for future growth still exists. Moreover, according to the China Food Industry Association, with more intergenerational companies like Wahaha emerging, starting from 2025, the food and beverage market will see a redistribution of over 4.3 trillion yuan in market value over the next five years.

Faced with such a huge cake, young companies are eager to compete. A typical example is Nongfu Spring.

Looking at Nongfu Spring’s main product lines in 2025:

Alien electrolyte water grew 34% YoY. Wei C orange-flavor and summer black grape-flavor sparkling waters grew 52%. Iced tea series increased 56%. Haozizai series rose 36%. Vitamin water surged 128%. For a company that has weathered storms in the era of new consumption, this is a bet on future capital.

It is also accelerating to catch up with traditional giants in two key areas: building its own factories and slow, R&D-driven innovation.

As early as 2021, Nongfu Spring invested in and built its fourth self-operated factory in Xianning. Five international production lines were gradually commissioned, with an annual capacity of 800 million yuan. Its Xianning Innovation Institute Phase I invested 200 million yuan, aiming to serve 500 beverage companies and develop 2,000 new products over three years. Pilot bases will serve 500 companies and produce 15 million boxes of healthy drinks.

In fact, these two core strategies by Nongfu Spring resemble those of Nongfu Spring’s industry model.

After all, building water source factories and slow innovation have long been Nongfu Spring’s style. In 2025, while many traditional giants faced pressure, Nongfu Spring’s revenue grew 22.5% YoY to 52.553 billion yuan; attributable net profit increased 30.9% YoY to 15.868 billion yuan.

This shows Nongfu Spring is not blindly following trends; its strategic choices have some industry rationale. But is doing just these two things enough to stand out in the beverage industry? Especially for a new company with less brand heritage and weaker channel roots than traditional giants.

Currently, the beverage sector still operates within the “traffic is king” paradigm.

Take the popular industry collaborations. “Time Insight Engine” data shows that in 2025, about 3,000 brands initiated nearly 13,000 co-branded events, averaging 35 per day, mainly in tea drinks and FMCG. Around the release of “Zootopia 2,” over 70 brands including PepsiCo and Yili engaged in crossovers.

In 2025 alone, Luckin Coffee collaborated 22 times.

If Nongfu Spring wants to regain a foothold for bottled drinks, it must continue to overcome traffic anxiety.

It’s worth noting that the company’s market position is complex. On one hand, brand awareness is highly consistent, with clear user profiles and stable loyalty. On the other hand, new products struggle to break through and attract new customers at scale; they mostly circulate within the existing user base, unable to truly expand the market.

For example, the overlap between “Haozizai Water” and sugar-free tea consumers is as high as 90%.

Faced with this dilemma, Nongfu Spring also feels lost. Increasing marketing efforts and actively breaking into new areas seem promising, but industry realities make it hesitant to act aggressively.

Recently, the online buzz has been about Eastroc’s foresight in investing in Zhang Xue’s motorcycle, which reportedly generated over 1 billion in global exposure and over 100 million in topic reads.

But in 2025, Eastroc’s sales expenses increased 27% compared to 2024; management expenses rose 35.53%, raising questions about profitability. Its A-share price hit 206.31 yuan, dropping as much as 9.51%; its Hong Kong stock was at 208.8 HKD, down 2.97%.

Faced with this, in 2026 Nongfu Spring can only “respond to changes without changing.”

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