Hello! I'm your financial news analysis assistant. This article about Nongfu Mountain Spring tells a very classic and profound business story: how a giant that started by "selling water" managed to transform from a water company into a comprehensive beverage conglomerate through the resurgence of an "old product."
To help you understand it easily, I'll first summarize the key points in one sentence, and then break it down in depth from five perspectives.
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📝 Key Point Summary
Nongfu Mountain Spring's foundation has changed. In the past, people thought of Nongfu Mountain Spring mainly as a water company, with water being the main product and tea as a secondary one. However, according to data from the first half of 2026, tea beverages (especially Dongfang Shuye) have completely surpassed packaged drinking water, becoming the company's largest source of revenue (44.2% vs 32.4%). This is not just a shift in numbers; it also means that Nongfu Mountain Spring no longer relies solely on its water business. Instead, it has used the extensive channel network established from selling water to foster new growth drivers. Water has become the "infrastructure," while tea has become the main source of profit and growth. The next challenge for the company is: after the intense competition in the tea beverage market, where will the next "Dongfang Shuye" come from?
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🔍 In-Depth Analysis: Five Perspectives on Nongfu Mountain Spring's Transformation
1. Data Reversal: From "Water Dominant, Tea Secondary" to "Tea Dominant, Water Secondary"
Let's look at the most obvious change. Five years ago (2021), Nongfu Mountain Spring earned over 17 billion yuan from selling water and only 4.5 billion yuan from selling tea, with water generating more than three times the revenue of tea.
But in the first half of 2026, the situation reversed:
- Tea beverages: Sold for 13.122 billion yuan, a year-on-year increase of 30.1%, accounting for 44.2%.
- Packaged water: Sold for 9.641 billion yuan, with only a 2.1% increase, accounting for 32.4%.
In plain language: It's like a family that used to rely mainly on the father's (water) salary for living, with the mother's (tea) income just supplementing it. Now, the mother's income has surpassed the father's, and it's growing rapidly, while the father's income has almost stagnated. This indicates that Nongfu Mountain Spring's growth momentum has shifted. Water is still an important business, but it's no longer the star of growth; rather, it's a stable but slowly growing "cash cow." Tea beverages, especially sugar-free tea, have taken over as the growth driver.
2. The "Time Magic" of Dongfang Shuye: Why Did It Succeed?
Many people wonder why Dongfang Shuye became popular. Is it because of its delicious formula? Sure, but the key lies in patience and timing.
- Early launch but not in the right time: When it was launched in 2011, Chinese people preferred sweet beverages like iced black tea and cola. Sugar-free tea was unpopular and even considered to have an unpleasant taste.
- Perseverance: Most companies would have stopped producing it if the product didn't sell well. But Nongfu Mountain Spring persisted for over a decade without giving up.
- The right moment arrived: After 2018, health awareness increased, and "0-sugar" became a trend. Brands like Yuanqi Forest educated the market, and people began to accept sugar-free beverages.
- Reaping the benefits: By the time the market was ready for sugar-free tea, Dongfang Shuye had been waiting for over a decade. It didn't need to develop a new product or re-establish distribution channels; it just had to wait for consumers to take notice.
In plain language: It's like planting an apple tree in 2011 that didn't bear fruit for the first five years, and everyone thought it was a failure. But you kept watering it. In 2021, when people suddenly started liking apples, your tree was full of fruit. The key is that Nongfu Mountain Spring bet on the right trend and had the resources and patience to wait for it to happen. This is not luck; it's strategic determination.
3. The Real Moat: The "Highway" Built by Selling Water
This is the most overlooked but crucial point in the article.
Many think Dongfang Shuye's success is due to its product quality, but in reality, it's because of the extensive channel network established by selling water.
- Characteristics of water: Water is heavy, cheap, and has low profits. To make money, Nongfu Mountain Spring had to build factories near cities and ensure distributors reached every convenience store, supermarket, and even village shops.
- Channel reuse: When Dongfang Shuye needed to be sold nationwide, it didn't have to start from scratch; it could leverage the existing network. Since its stores already sold Nongfu Mountain Spring's water, they could easily sell Dongfang Shuye as well.
In plain language: Imagine Nongfu Mountain Spring spending over 20 years building a "highway" to every corner of the country. This highway was originally used for transporting water. Now, Dongfang Shuye, functional drinks, and juices can all be sold quickly across the country. For new brands, building such a network would be costly and time-consuming; for Nongfu Mountain Spring, selling tea beverages is just a bonus.
4. Business Model Evolution: From "Selling Water" to "Selling a Lifestyle"
Selling water is a profitable business, but it has its limits.
- Limitations of water: It's difficult to significantly increase the price of water. It's hard to get ordinary people to spend 10 yuan on a bottle of water daily, and the market is saturated.
- Opportunities in beverages: Tea, functional drinks, and juices have higher prices and are driven by trends related to health, exercise, and energy.
In plain language: Nongfu Mountain Spring has shifted from selling a basic resource to offering solutions (health, energy, taste). If you want to stay healthy, you drink Dongfang Shuye; if you need to rehydrate after exercise, you drink functional drinks; if you want something flavorful, you drink juice. This transformation has turned it from a "single-category expert" into a "comprehensive beverage platform" with a more balanced revenue structure and greater resilience. Water is no longer the only pillar; it's the foundation of the entire business.
5. The Next Challenge: What Will Be the "Next Dongfang Shuye?"
The article raises a critical question: With Dongfang Shuye's success, where will the next big hit come from?
- Current situation: Tea beverages are the largest business, but there's fierce competition (Kangshifu, Uni-President, Sandeeli, Yuanqi Forest are all competing).
- Risks: If tea beverage growth slows down and water sales stagnate, Nongfu Mountain Spring could face growth stagnation.
- Potential directions: Functional drinks (3.3 billion yuan) and juices (2.9 billion yuan) are smaller than tea (13.1 billion yuan) but have potential for growth.
In plain language: Nongfu Mountain Spring is facing a "midlife crisis." 15 years ago, it had to decide whether to continue investing in Dongfang Shuye. Today, it needs to decide: What is the next product worth investing 15 years in? Is it electrolyte water, plant protein drinks, or some new health beverage? Finding the next "Dongfang Shuye" is more important than maintaining its current tea business. Because hits will eventually go out of fashion, the ability to identify and nurture them is Nongfu Mountain Spring's true core competitiveness.
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💡 Insights for Everyone
1. Don't underestimate old products: Sometimes, persisting in something right but not immediately popular can be more valuable than chasing short-term trends.
2. Channels are king: In the consumer goods industry, those with broader and more efficient channels have a significant cost and speed advantage.
3. Even giants are transforming: Even giants like Nongfu Mountain Spring cannot rely on past success. They must continuously seek new growth points and move from a single hit to a diversified business ecosystem.
Nongfu Mountain Spring's story shows us that water was just the starting point; channels are the bridge, and continuously evolving product strength is the key to the future.