Source | Pin Yin Hui Observer Qing Cang In December 2025, on the Hurun China Food Industry Top 100 list, China Resources Beverage (parent of C'estbon) ranked first on the decliner list with a 28% value drop, becoming the most disappointing beverage giant on the list. This is no accident. Just months earlier, China Resources Beverage's H1 2025 report had already shaken the market: H1 revenue was RMB 6.2 billion, down 18.5% year-on-year; net profit was RMB 823 million, plunging 28.7%. This "less-than-ideal" report card brought the bottled water giant's growth difficulties and competitive pressures to the surface. 2025 Water War Defeat China Resources Beverage's troubles began with a price storm sweeping the packaged water market. In April 2024, Nongfu Spring made a strong return to the purified water track it had left for 24 years with its "green-label purified water," priced at RMB 9.9 per 12 bottles (about RMB 0.57 per bottle), instantly flooding retail terminals. Image source: Xiaohongshu user @Tanxu "This move seemed to respond to Wahaha's impact, but the one hurt most was C'estbon, the leader in purified water," noted an industry observer. The launch of green-bottle water completely broke the market balance. Previously, Nongfu Spring and C'estbon under China Resources Beverage maintained a delicate competitive understanding: "If you don't start a price war, I won't either; if you do, I'll follow. But as natural water, I'll be one yuan more expensive per case than you." This balance gave C'estbon the upper hand in price wars. But the launch of green-bottle water allowed Nongfu Spring to "use red-label water to protect its base and green-label water to fight price wars," regaining the initiative and dragging C'estbon into a price melee. Helplessly, C'estbon was forced to respond, but the market's response was "cruel." According to Mashangying data, in August 2025, C'estbon's share of the packaged water market fell to 20.34%, and its core stronghold—the purified water category—plummeted from over 70% at the start of 2024 to about 40%. China Resources Beverage's H1 2025 interim results showed that packaged drinking water revenue fell 23.1% year-on-year, with all sub-products declining—small-size (under 1 liter), medium/large-size, and barrel water all saw revenue drops, with small-size products falling most sharply at 26.2%. It can be said that C'estbon thoroughly lost the "water war" in the first half of 2025. It's worth noting that China Resources Beverage's "packaged water dependence" led to a near-loss of its core business. From the financials, in H1 2025, C'estbon's packaged water revenue still accounted for 85% of total revenue, and the RMB 955 million growth in beverage business could only barely cover a fraction of the RMB 1.58 billion decline in water business. In other words, packaged water revenue accounts for nearly 90% of total revenue—how can China Resources Beverage afford such a fall? In contrast, Nongfu Spring's tea beverage revenue reached RMB 16.745 billion in 2024, accounting for 39% of revenue, launching its second growth curve; in H1 2025, tea beverage sales were RMB 10.089 billion, accounting for 39.4% of total revenue, surpassing bottled water to become the company's largest revenue source. It is precisely because Nongfu Spring successfully shifted its business focus that it demonstrated stronger resilience and growth potential than C'estbon in the price war. Pain: Channel Difficulties and Inverted Price Chaos If the external price war was the trigger, then post-listing channel management loss of control became the poison pill eroding China Resources Beverage's profits. According to the "BUG" column, this year C'estbon's channels were deeply mired in a vicious cycle of "price inversion": 555ml bottled water commonly saw "purchase price RMB 1/bottle, terminal price RMB 0.9/bottle," with some regions even as low as RMB 0.85/bottle. "For example, a distributor buys at RMB 100 but only recovers RMB 90-95," said one distributor. To maintain system operations, China Resources had to subsidize distributors through "post-return fees" (e.g., returning 2 bottles of water or cash per case opened). This model squeezed distributor profits to 3%-5%, far below the industry average of 8%-10%. "This model not only violates normal trade rules but also increases operational risk," the distributor said bluntly. The root of this unhealthy ecosystem lies in loss of control over the price system. In 2024, Nongfu Spring launched green-bottle purified water, with some channel terminal prices as low as RMB 0.57/bottle, directly impacting C'estbon's RMB 1-2 price band. To cope with competition, China Resources was forced to join the price war; in April 2024, the average price of small-size bottled water fell to RMB 1,198/ton (about RMB 0.6/bottle), but market share was still eroded. While this problem may be related to performance pressure after C'estbon's listing, it is the distributors who bear the greatest cost. "After C'estbon's listing, to make the financials look good, they controlled costs, but distributors had large inventories, poor market sell-through, and old stock dates, so they had to sell at low prices," a South China beverage distributor told the author. Clearly, distributors have become the most direct victims of this price war. When manufacturer subsidies recede, customer price expectations remain at subsidy levels, and distributors become the "rope" in a tug-of-war. They must absorb cost increases from reduced subsidies while dealing with customers'—especially wholesale big clients'—obsession with low prices, ultimately struggling between "losing money to keep customers" and "raising prices and losing customers." Image source: Xiaohongshu user @I love eating fries Of course, China Resources Beverage has seen the problem and is continuously promoting channel reform. According to CICC research, in H1, China Resources Beverage changed its beverage distributor service model from delivery and settlement to comprehensive beverage distributors, increased channel flattening in some regional markets, introduced more first-tier wholesalers to better reach terminals, and set up dedicated e-commerce and foodservice channel distributors to improve special channel coverage. In this regard, the research report noted, "These channel changes are beneficial for the company's refined channel management and long-term growth potential, but they had some adverse impact on H1 performance." After all, channel reform involves distributor model adjustments, modern channel construction, etc., requiring subsidies and system setup costs, which may increase rigid costs in the short term. Additionally, channel reform has brought pain. Media reports say that in 2025, China Resources Beverage promoted channel flattening, introduced first-tier wholesalers, and segmented e-commerce and foodservice dedicated distributors, but distributor exits occurred in Sichuan, Guangxi, and other regions, with market coverage in some areas dropping 10%. Self-Rescue: Beverage Breakthrough and Channel Reshaping Facing dual pressures, C'estbon's path to redemption revolves around two main lines: accelerating beverage diversification externally and rebuilding channel health internally. As the bottled water market has become a red ocean, the beverage battlefield has become C'estbon's "second lifeline." Just halfway through 2025, China Resources Beverage's new product list already includes over ten products: Yanbei coffee, Honey Water Green Grape, Zhiben Qingrun·Stewed Pear, 5L family-size water, 300mL mini tea drinks... This pace of new product launches is "not common" in the company's history, signaling China Resources Beverage's determination to burn its boats—in 2024 alone, C'estbon added 4 factories and 22 production lines, increasing comprehensive capacity by 21%. On the marketing front, China Resources Beverage has also been trying to expand new consumption scenarios and find new market growth. In the family consumption scenario, China Resources Beverage launched C'estbon 5L natural water and 1L Magic sports drink, targeting convenience for family sharing; in the sports scenario, upgraded Magic sports drink paired with C'estbon 555ml purified water with a sports cap design, forming a combination of "functional supplement + basic hydration"; targeting young white-collar workers, China Resources Beverage launched Yanbei coffee in February this year, entering the ready-to-drink market with latte and mocha. Among these, tea beverages focusing on health and differentiation performed particularly well. According to the annual report, in 2024, the Zhiben Qingrun series saw sales surge 122% year-on-year through product size extensions (e.g., family packs) and new flavors (e.g., sour plum soup), with its chrysanthemum tea series taking the top spot in the sub-category. This year, the series continues to expand, launching a new "stewed pear" flavor and a more portable 300mL small pack, aiming to cover more diverse drinking occasions such as office and commuting. Image source: Xiaohongshu user @Panghu But it's worth noting that among the many new products, China Resources Beverage still lacks a "phenomenal" beverage hit that can ignite the market, gain widespread recognition, and drive repeat purchases. At present, China Resources Beverage's breakthrough path is long and arduous. Although Zhiben Qingrun is growing rapidly, the chrysanthemum tea sub-market has natural limits; the sports drink "Magic" faces strong competition from brands like Dongpeng. From a market perspective, China Resources Beverage's "water-led beverage" strategy, such as the "unboxing gift" activity where 4 beverage boxes can be exchanged for C'estbon water, actually exposes the insufficient independent sell-through capability of its beverage products. Additionally, channel restructuring faces severe challenges. Many industry insiders point out that China Resources Beverage's "digitalization and channel transformation lag behind, with insufficient online and modern channel penetration," and weak coverage in lower-tier markets. According to insiders at China Resources Beverage, this year's channel construction will optimize the network by strictly screening distributors and matching resources (water channel or beverage channel experts) according to regional needs, emphasizing "setting targets based on market capacity, not blindly demanding high indicators." Most importantly, whether it can straighten out the benefit distribution mechanism and rebuild distributor confidence will determine the success or failure of C'estbon's channel reform. C'estbon's redemption is destined to be a difficult journey. In a beverage battlefield surrounded by "volume kings," whether to re-arm the price war weapon to hold the line or cultivate a truly sustainable second curve in beverages requires strategic determination and time. This giant, which once conquered the world with a bottle of purified water, now stands at a crossroads of transformation. Whether it can be reborn after the pain will be a typical sample of FMCG giant transformation in the new competitive cycle. [Moving Toward C-End] The 11th China FMCG Conference Time: March 16-18, 2026 Location: Chengdu, China