Soda water market lacks a dominant leader. In the second half of this year, the beverage industry has seen frequent new product launches: Coca-Cola began selling alcohol and sparkling water in October, Dongpeng Special Drink launched lemon tea, and Tmall partnered with Moutai to launch 'Moutai Coffee'... Nongfu Spring, which has been quietly focusing on its core business, has also become restless. Recently, multiple media outlets reported that Nongfu Spring will launch a new soda water product in November, marking its first foray into this category. Earlier in March, the company also introduced China's first plant-based protein yogurt. **-01- **Why soda water? Nongfu Spring's interest in soda water may be related to the growth rate of this category. According to Nielsen's research, in 2018, the overall sales growth rate of food and beverages in China was 5.4%, with concentrated juice and low-concentration juice experiencing significant year-on-year declines, while soy milk, unsweetened tea, and soda water saw accelerated growth, especially soda water with a year-on-year growth of 16%. The Nielsen data also shows that as a new category, soda water is currently most rapidly promoted in Europe and the United States, while the Chinese market remains to be developed. In the global soda water market, European countries account for the highest share of production at 54.1%, followed by the United States at 13.2%, and China at 7.2%. It is estimated that by 2020, the size of China's soda water market will reach 20 billion yuan (RMB, same below), and within the next decade, the overall market size of the soda water category will reach 40 to 50 billion yuan. A consumer who has long been in contact with beverage products told Times Finance on November 13 that besides its health attributes and meeting basic consumer needs, soda water is also used in other life scenarios. She said that soda water can now be used not only for mixing drinks but also for drinking after alcohol consumption. In the view of Zhang Ji, chief analyst at Shanghai Zhihui Marketing Consulting Co., Ltd., the threshold for the soda water category is relatively low, making it easier to enter. In an interview with Times Finance on November 13, he analyzed that because soda water belongs to the same consumer goods category as beverages, Nongfu Spring can fully leverage its existing channels to promote new products. At the same time, using existing can production lines to produce new products is an effective attempt. However, Zhang Ji also pointed out that Nongfu Spring's continuous introduction of new products in segmented fields is also related to its current performance in traditional businesses. "They have become saturated in traditional business areas and need a new performance growth point." In June this year, Beijing Wantai Biological Pharmacy Enterprise Co., Ltd. updated its IPO prospectus, which also disclosed the operating conditions of Nongfu Spring, also under Yangshengtang. According to the prospectus, in 2018, Nongfu Spring's unaudited total assets were approximately 20.075 billion yuan, and net profit was approximately 3.616 billion yuan, a year-on-year increase of 7.33% compared with the same period in 2017. Previously, the "2018 Zhejiang Business National 500 List" published by Zhejiang Business Magazine showed that Nongfu Spring's revenue in 2017 was 16.25 billion yuan, a year-on-year increase of 8.3%. However, in 2015 and 2016, Nongfu Spring's revenue growth rates were 20% and 19%, respectively. A Nongfu Spring spokesperson also confirmed to Times Finance the upcoming launch of soda water products, stating that the product will come in lemon and white peach flavors, priced at 4 yuan per bottle, and will be distributed in major provinces in the coming days. **-02- **Soda water market lacks a dominant leader Riding on the health trend, soda sparkling water has become a rising star in the beverage market in the past two years, with foreign giants, domestic old brands, and emerging brands all wanting a share of this market. According to Times Finance statistics, just this year, multiple beverage companies have launched soda water products. In May, Genki Forest launched sugar-free "Qi" soda sparkling water; in July, Tsingtao Brewery launched Prince Seaweed Soda Water; in October, Uni-President launched Qingbo Soda Water... Earlier entrants in the soda water space include Coca-Cola, Wahaha, and Watsons, all of which launched similar products around 2010. At the same time, there are currently as many as 20 to 30 types of soda water drinks on the market. Domestic brands such as Wahaha, Watsons, and Mingren Soda Water focus on the mid-to-low-end positioning, with prices ranging from 3 to 8 yuan. High-end products mainly include Genki Forest Soda Sparkling Water, Shudayuan's Kedong Natural Soda Water, and Shihanquan's Natural Soda Water, with Shihanquan's unsweetened natural soda water priced at 276 yuan per 24 bottles on Tmall flagship store. Nongfu Spring's entry into soda water is not surprising, as the soda water market has been in chaos without a clear industry leader. Zhu Danpeng, a food industry analyst in China, pointed out to Times Finance that the reasons for this phenomenon are diverse. He believes that on one hand, soda water is still in the consumer education stage in China, with low per capita consumption, and most products on the market are concentrated in the mid-to-low end. On the other hand, the lack of domestic standards for soda water makes it difficult for consumers to distinguish the quality of soda water products, affecting their perception of products and brands. "The market base for soda water is not large enough, and there is no complete industry and product standard, which easily breeds chaos where shoddy goods are mixed with genuine ones. Currently, all soda water companies implement enterprise standards, not mandatory national standards. Different implementation standards also lead to discrepancies in the promotion and definition of natural soda water and soda water beverages among some manufacturers. When the standards of soda water products on the market are uneven, and brands and products cannot convey correct product information to consumers, consumers' perception of products and brands will be greatly diminished," Zhu Danpeng added. Zhang Ji believes that as a sub-category of the beverage industry, the soda water market has not yet formed a single-brand dominance like Red Bull in sports drinks or Wanglaoji and JDB in herbal tea, so there is indeed an opportunity for new entrants to occupy consumers' 'mind' space. In the process of competition among brands, large enterprises will have greater advantages compared to regional enterprises, but the final outcome will depend on a combination of factors such as product taste, sales channels, and marketing. Source: Times Finance Tips will be paid 400-2000 yuan upon adoption.