Aaron, a buyer for a well-known online retail platform, remarked to the author, "Since last year, I've noticed a sudden increase in soda water brands. This year, soda water is trending toward natural concepts, with many brands borrowing from sugar-free sparkling water, emphasizing zero sugar, zero fat, and zero calories, and there's also a tendency toward price wars." This summer, Nongfu Spring launched a green bottle purified water priced at 9.9 yuan per pack, sparking a fierce price war in bottled water. Purified water dropped to a few cents, and mineral water fell to the 2 yuan range. Similarly, soda water, another subcategory of bottled water, cannot escape the fray and is facing a new round of intense competition.
Image source: Xiaohongshu user @知止
A key manifestation of this competition is that many brands are upgrading from synthetic soda drinks to natural soda water, yet price competition is intensifying.
A Decade-Long Cycle
The "soda water" category is gaining popularity again. The beverage market's trend of "a decade-long cycle" is being validated once more in the soda water category. Around 2013, a large number of soda water brands, represented by Mingren Soda Water, appeared on the market. At that time, the main production areas were in Central and North China, and most products were "soda water drinks."
Image source: Xiaohongshu user @一口软糖
The addition of "drink" implies a synthetic soda beverage, which is different from natural soda water with no additives. However, for most consumers, it's hard to distinguish between the two. Due to the persistent "information gap" in the soda water category, it remains attractive to new brands because categories with information gaps often allow brands more leeway in marketing and pricing. After all, categories like purified water, which have reached a point of no homogeneous innovation and bottomed-out prices, can only serve as battlegrounds for giants. Therefore, a decade ago, when natural soda water, synthetic soda water, and even flavored drinks could all be labeled "soda water," it meant the market was still in a stage of wild growth, where anyone could ride the category's popularity, and small brands had opportunities to compete with giants from a different angle. Even today, in many sales scenarios, we still see natural soda water, synthetic soda water, and soda water drinks coexisting. For example, in Tmall Supermarket's best-selling soda water list (based on the last 7 days), brands like Nongfu Spring, Wahaha, Mingren, Yineng, and Changshengzhi Mai are all featured, but in reality, they differ in category and standards, including natural soda water, synthetic soda water, and soda water drinks.
Image source: Taobao @Tmall List
For instance, Nongfu Spring Soda Water (Q/NFS 0043S), Mingren Soda Water (Q/JMY0023S), and Yineng Soda Water Drink (Q/HZY0001S) follow enterprise standards starting with "Q"; Changshengzhi Mai Natural Soda Water (DB23/T1727) follows a local standard for Heilongjiang Province, specifically for the geographical indication product Kedong Natural Soda Water; and Yineng Natural Soda Water and other natural soda water products from non-Heilongjiang sources (T/CNHAW 0002–2017) follow the China National Health Association Group Standard... The lack of a national standard, on one hand, provides opportunities for small and medium enterprises and new brands to grow wildly, and on the other hand, makes competition more complex and market differentiation more pronounced.
The Trend of Differentiation Between Natural and Synthetic Soda Water Intensifies
With significant changes in consumer awareness and consumption scenarios over the past decade, the soda water market is also growing rapidly. According to the "2015-2050 China Soda Water Market Operation and Development Forecast Report" released by the Industrial Information Network, it is predicted that within the next 10 years, the soda water market capacity will exceed 20 billion yuan, with huge development potential, and sales growth will be much higher than the overall beverage level. According to data from Gongyan Industry Consulting, China's soda water industry (including natural and artificial soda water) production has grown from 608,000 tons in 2012 to 2.812 million tons in 2022, and this growth momentum is intensifying, with overall production likely to exceed 3.208 million tons by the end of 2023, truly becoming a major pillar in the bottled water market segment.
Image source: WeChat public account @福州晚报
This round of "re-popularity" in the soda water market is mainly reflected in the rising popularity of natural soda water, marketing aligned with sugar-free beverages, and a gradual split from synthetic soda water into different camps. First, with the rise of health consumption trends, more consumers are paying attention to ingredient lists. The advantage of "zero additives" in natural soda water is becoming apparent. "According to our market observations, many post-80s young and middle-aged friends choose natural soda water as the best substitute for water because they have health needs, low willingness to consume sugary drinks, but find plain water bland. Therefore, natural soda water has mature consumption scenarios," said Mr. Guo, a distributor in Shenzhen. He believes that the logic behind the resurgence of natural soda water is similar to that of sparkling water and sugar-free tea, both based on the trend of "substituting water." Based on this, brands like Yineng, which have already reaped the benefits of synthetic soda water and soda water drinks, have been frequently launching natural soda water products in recent years to offer consumers more choices. In contrast, in the synthetic soda water market, Wahaha's products focus more on the student market, using e-sports co-branding to target consumers; Nongfu Spring's soda water products have almost been marginalized in the market, and in recent years, their financial reports have not separately listed category sales but merged coffee, sparkling water, etc., into "other categories," with sales declining significantly in recent years. Second, the current popularity of natural soda water has also benefited from the sugar-free beverage trend. The author's statistics on nearly 50 natural soda water products (from 30 brands) online found that 27 products emphasized "0 sugar, 0 fat, 0 calories" on their promotional pages, accounting for about 54%. A representative from a natural soda water brand told the author, "Soda water is essentially colorless and tasteless bottled water. If we continue to educate consumers with the health concept of soda water, not only is the market cultivation cost high, but it's also difficult to tell a good story under advertising law." The success of Genki Forest's sugar-free sparkling water a few years ago provided marketing inspiration for natural soda water manufacturers, and the "0 sugar, 0 fat, 0 calories" selling point can be easily copied.
Image source: Xiaohongshu user @猛男爱喝雪碧
Of course, some marketing professionals point out that this approach seems to cater to consumer buying habits, but in reality, it continuously weakens the "natural" attribute of natural soda water itself, and even benefits soda water drinks, deepening the "soda water" image of soda drinks in consumers' minds. Additionally, it's worth noting that the current natural soda water market is showing signs of a "price war." According to an industry insider who wished to remain anonymous, two months ago, an online sales platform sought OEM manufacturers for private-label natural soda water, planning a retail price of 9.9 yuan for 6 bottles. Several factories participated in the bidding, and the winning bid had an ex-factory price of less than one yuan per bottle. Perhaps the timing of this natural soda water resurgence is not ideal—on one hand, bottled water price wars are breaking out everywhere, and "when the nest is overturned, no egg remains intact"; on the other hand, the overall consumption environment is sluggish, and for FMCG, consumers are increasingly price-sensitive.
Image source: Taobao screenshot
"In the past two months, a well-known bottled water company in South China launched a new natural soda water product. I thought about it for a long time but finally didn't take it. The reason is that the price seemed a bit high to me; the terminal price is about 5 yuan per bottle, and I think it's hard to sell at that price in the current market," Mr. Xu, a distributor in Guangdong, told the author. If natural soda water also engages in price wars, it's not good for this growing category. For example, soda water from Kedong, Heilongjiang, is not only natural but also rare natural soda mineral water (with sodium bicarbonate meeting standards, and other elements like metasilicic acid, strontium, lithium, and total dissolved solids also meeting mineral water national standards). This scarcity determines that natural soda mineral water is positioned as high-end. However, in the chaos of the soda water market, the existence of an "information gap" undoubtedly increases the marketing difficulty for such high-end soda mineral water brands. The author believes that with the further development of the soda water industry and increasingly mature market education, the soda water industry can truly achieve competitive differentiation and market stratification, and only then can it truly enter the development stage.