Recently, many peers and entrepreneurs have been asking me how to operate the natural mineral water category in 2016 and beyond. I believe it's necessary to write an article about this category for your reference, and I welcome corrections from peers.

Part 1 Several News Items About Natural Mineral Water

News 1: Recently, Huoshan County successfully signed a mineral water project with Huiman Group. Huiman Group plans to invest a total of approximately 1.15 billion RMB, covering 500 mu of land, with an annual output of over 300,000 tons of high-quality drinking natural mineral water. After the project is completed, it will accelerate the deep development and utilization of mineral water resources in the Dabie Mountains, enhancing the visibility and reputation of the Dabie Mountains, especially Huoshan.

News 2: On the icy and snowy Changbai Mountain in Jilin Province, new processing plants are quickly "packaging" the region's precious essence: mineral water. In China's rapidly expanding bottled water market, the high-quality mineral water from this mountain has become a shining star.

News 3: Statistics show that in 2015, natural mineral water accounted for more than one-third of beverage consumption, and it is clearly on a continuous upward trend.

News 4: A survey asking "Which type of water do you think is most beneficial to health?" showed that 49% of netizens believe boiled tap water is most beneficial, 19% believe mineral water is, and 12% believe mineralized water is, with the smallest proportion choosing purified water. Only 20% of netizens believe mineral water is the healthiest, indicating that netizens have misconceptions about water health, and may even be unable to distinguish between mineral water, mineralized water, and purified water. In the online survey, the most frequently selected mineral water brands were Kangshifu (25%), Kunlunshan (8%), and Jingtian Baishuishan (8%). 38% of netizens chose "Other," and it is possible that some confused mineral water with other bottled water concepts, directly categorizing brands like Nongfu Spring and Wahaha under "Other."

What do these four news items indicate? I believe there are two aspects: On one hand, companies are intensively developing natural mineral water; on the other hand, only 20% of consumers know that mineral water is the healthiest.

Part 2 Simple Distinctions Among Several Types of Water

The source of water directly determines the quality of bottled water.

  • Purified water comes from tap water.
  • Mineralized water comes from purified water.
  • Natural water comes from lakes and reservoirs.
  • Natural mineral water must come from groundwater sources with unique geological conditions and years of mineralization history. Taking Nongfu Spring as an example, its products have four major water sources: besides Jingyu in Jilin on Changbai Mountain, Danjiangkou in Hubei, Qiandao Lake in Zhejiang, and Wanlv Lake in Guangdong are all reservoirs or lakes. The bottled water from these sources is surface water, not groundwater that forms natural mineral water, so the packaging can only be labeled as "natural drinking water." Moreover, in GB8537-2008 "Drinking Natural Mineral Water," it is clearly stated: "Unless approved by relevant national authorities, labels must not claim medical effects." Therefore, netizens should not be fooled by mineral waters advertised as having therapeutic effects. "Mineral water is also a mineral resource, a liquid mineral. After mineral water is marketed, relevant authorities collect water resource fees." (Quoted from the internet above)

How many consumers know the above? So consumers are blind.

Part 3 My Views on Operating Natural Mineral Water

Through Parts 1 and 2, my viewpoint is clear: on one hand, companies are optimistic about the mineral resources of natural mineral water and are investing in the project; on the other hand, consumers have a vague understanding of natural mineral water.

According to Nielsen's latest data from December 2015, C'estbon and Nongfu Spring had market shares of 20.4% and 20.1% respectively. C'estbon surpassed Nongfu Spring by a slight margin, with annual revenue exceeding 10 billion RMB, taking the top spot and becoming the leader in the drinking water industry.

Among mineral water brands, there are dozens or even hundreds of brands, including Baishuishan, Aershan, Kunlunshan, Tibet 5100, Coconut Palm Volcanic Rock, Evergrande Spring, Nestle Panshan, Kangshifu, etc. Currently, the brands are fragmented, with Baishuishan having the largest sales volume.

Let's analyze the case of Baishuishan: In 2003, Jingtian entered the mineral water market, and in 2004 launched the Baishuishan series. In 2009, it ranked among the top three in the national mineral water industry, and in 2010, it took the top spot in mineral water market share. According to data released by the China Industrial Beverage Association, over the past 10 years, Jingtian's production has grown at an average annual rate of 32.7%. In Guangdong, the growth of Baishuishan is particularly significant, with 90% of surveyed distributors saying "As long as Baishuishan has production, it will have sales."

Why? I believe the analysis can be conducted from the following four aspects: First: Clear positioning—the slogan "Baishuishan, the aristocrat of water" immediately differentiates it from ordinary water, enhancing consumers' sense of consumption hierarchy. Second: Emphasis on channel push—when initially entering the market, despite low sales, they insisted on distribution to ensure visibility. Distributor incentive policies were in place, so they were proactive, ensuring distributor gross profit margins, often doing buy-one-get-one promotions, rebates, etc., solving the channel push. Third: Persistence—starting from 2004, it took 5 years to enter the top three, and only after 2010 did it become the leader in mineral water. Starting from 2013, that is, 9 years after consolidating channels, Jingtian only then placed TV ads on CCTV-1, CCTV-5, and some local satellite channels, suddenly arousing consumer curiosity, and sales began to increase significantly. Fourth: Reasonable price system design—priced at 2.5-3 RMB per bottle, mainly targeting circulation channels. Compared to brands like Kunlunshan, which focus on supermarkets and are priced above 5 RMB, it is much more affordable and acceptable to consumers. At the same time, the price space for second-tier wholesalers and terminal stores is reasonable, ensuring profits at all levels.

Based on the above, I believe that with the rise of Baishuishan and Evergrande Spring, the domestic natural mineral water market is ushering in an industry explosion period, becoming the next herbal tea category. Consumers will not remain blind forever, so all natural mineral water companies must cultivate their internal strengths to seize the opportunity. I summarize three sentences for companies' reference: Products must be differentiated, and push must be strengthened; Distribution must be persistent, and advertising can come later; Prices must be affordable, and promotions must be continuous.

This article is the author's personal opinion, and I welcome corrections from peers.

Hu Wei, a native of Jiujiang, currently residing in Beijing, graduated from Nanjing University of Finance and Economics, a practical marketing expert in FMCG, partner and chief marketing consultant of Shanghai Lixi Culture Communication Co., Ltd., and marketing mentor of Hu Wei's Practical Marketing Studio. He is a contributing writer for domestic well-known marketing magazines and journals such as "Sales and Market," "China Wine News," and "Pharmaceutical Economic News." He is skilled in using Taoist Huang-Lao philosophy to create the "Six Hearts" management theory for building core sales teams. He focuses on differentiated marketing, channel incentives, and breaking through regional markets for food and beverages. He has held positions such as Product Director and General Manager of Guangdong Region at Huiyuan Juice Group, Marketing Director and Marketing Director of Northern Region at Hunan Taizinai Group, Marketing General Manager at Jiangxi Gaozheng Group, and Deputy Marketing General Manager at Duoduo Runer Company.

Welcome peers to communicate and exchange ideas.

- END-

The best learning platform for FMCG distributors in China Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent Article Selection | 002 Distributor Market Operations | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Improvement Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's Eighteen Skills | 013 KA Operation Methods and Strategies | 014 First Lesson for New Salespeople | 015 Internet, Brand | 016 Distributor B2B Transformation | [Long press QR code to follow]