After the public opinion surge, what did Nongfu Spring do right to grow against the trend?

Ask AI · How can bottled tea drinks become the primary source of revenue?

Consumer data shows that Nongfu Spring maintains a stable position in its core market, and the fundamentals of consumption have not experienced any fundamental shocks.

Produced by|China Investigation Net

Reviewed by|Li Xiaoyan

On March 24, Nongfu Spring (09633.HK) released its annual earnings report. The full-year revenue reached RMB 52.553 billion, a year-on-year increase of 22.51%; net profit was RMB 15.868 billion, up 30.89% year-on-year. Both figures set new records. Following the release of the financial report, the company’s stock price rose accordingly, and its market capitalization remained stable above HK$520 billion. Market confidence has fully returned. This impressive performance not only marks Nongfu Spring’s successful recovery from the public opinion fluctuations in 2024 but also demonstrates its solid brand foundation and operational resilience through robust growth across all categories, healthy channel development, and improved profitability.

In terms of market performance, Nongfu Spring has achieved a comprehensive operational recovery. In 2024, external public opinion pressures temporarily constrained growth, causing a short-term decline in the packaged drinking water segment; however, in 2025, various indicators rebounded strongly: revenue first surpassed RMB 50 billion, with a significant acceleration compared to the previous year; profit growth outpaced revenue growth, and profitability quality continued to improve. The gross margin increased to 60.53%, ending the previous downward trend. The effectiveness of cost control and product mix optimization was evident, demonstrating the risk resistance and recovery capacity typical of leading fast-moving consumer goods companies. Chairman Zhong Shanshan mentioned in the financial report that the management team withstood the test of public opinion, and the maturity and adaptability of the team and company have been validated by the market.

Consumer data shows that Nongfu Spring maintains a stable position in its core market, and the fundamentals of consumption have not experienced any fundamental shocks. Research targeting the mainstream consumer group aged 18-35 indicates that Nongfu Spring leads bottled water brand choices with a 43.48% share, nearly 20 percentage points ahead of the second-place brand; in extreme two-choice scenarios, over half of consumers still prefer Nongfu Spring, indicating a solid user base. The recognition of natural water as a category, high cost-performance ratio, and extensive channel coverage have formed an irreplaceable consumer habit, and public opinion turbulence has not shaken consumers’ daily purchasing decisions.

From a demographic perspective, brand reputation shows signs of structural recovery. Younger consumers are more sensitive to public opinion information; some still retain slight controversial impressions, with the proportion of those holding controversial views slightly higher among the 18-25 age group. However, as age increases, perceptions of controversy weaken significantly: consumers aged 36-45 show a much higher proportion of positive evaluations. Overall, negative perceptions are concentrated at the social opinion level and have not translated into actual purchase losses. Word-of-mouth effects have caused some localized aftershocks but have not fundamentally impacted consumption, reflecting the current true state of the brand’s reputation.

Product structure upgrades and multi-category synergy are the core supports enabling Nongfu Spring to navigate the cycle. Packaged drinking water bottomed out and rebounded, with revenue reaching RMB 18.709 billion in 2025, up 17.28% year-on-year, returning to a growth trajectory, with its leading position in natural water firmly maintained. More notably, revenue from tea beverages reached RMB 21.596 billion, accounting for 41.09% of total revenue, making it the largest revenue source for two consecutive years, with a year-on-year growth rate close to 29%. Leading products like Oriental Leaf have driven the sugar-free tea consumption trend, establishing a stable second growth curve.

Meanwhile, all categories achieved balanced growth: functional beverages generated RMB 5.762 billion, up 16.83%; fruit juice beverages reached RMB 5.176 billion, up 26.71%; other products also maintained double-digit growth. Transitioning from reliance on a single water category to a dual-driven model of water and tea, with multiple categories working synergistically, Nongfu Spring effectively disperses operational risks. Even if one segment experiences short-term fluctuations, overall growth remains steady—this is a key factor in the company’s rapid recovery.

Channel and operational health continue to improve, further confirming the quality of the recovery. In 2024, public opinion pressures caused temporary channel stress, with inventory and cash flow experiencing short-term fluctuations; however, in 2025, inventory growth mainly resulted from strategic production preparations and upstream tea leaf deployment, rather than terminal sluggish sales. The sales expense ratio decreased from 21.38% to 18.65%. Expense growth lagged behind revenue growth, indicating smooth terminal sales and sufficient channel momentum, eliminating the need for large promotional discounts to boost sales. Channel confidence and turnover efficiency have returned to a healthy range.

Upstream supply chain development has deepened continuously, laying a solid foundation for long-term growth. Nongfu Spring advances the entire industry chain around water sources, tea plantations, and juice raw materials, securing high-quality resources and stabilizing quality and costs. This creates a unique competitive advantage amid industry homogenization. Coordinated efforts in large-scale production, refined operations, and a nationwide deep distribution network further strengthen cost and efficiency advantages, supporting a steady gross margin increase and ensuring sustained profitability growth.

The capital market also responded positively. After the earnings announcement, Nongfu Spring’s share price surged over 8% at one point, and its market cap remained above HK$520 billion. Its high growth, high profitability, strong cash flow, and stable dividends make it a core asset in Hong Kong’s consumer sector. Institutional investors are optimistic about the company’s category expansion and supply chain advantages, and the market recognizes its long-term value.

Objectively, Nongfu Spring has fully recovered from operational setbacks. Its performance, channels, and profitability have all returned to a high-quality growth trajectory. Although some controversy remains among younger consumers, it has not affected core consumption, and reputation recovery is progressing steadily. For FMCG brands, public opinion impacts are stage-based; the key to long-term success lies in product strength, channel strength, supply chain capability, and consumer mindshare. Nongfu Spring demonstrates true brand resilience through solid operations and steady growth: its underlying strength comes from continuously satisfying consumer needs.

Looking ahead, as high-growth categories like bottled tea continue to expand, packaged drinking water steadily recovers, and the full-category matrix is further optimized, Nongfu Spring’s growth momentum remains robust. Meanwhile, the brand will continue to enhance public communication, strengthen youth-oriented and approachable messaging, and further bridge perception gaps. From a new RMB 50 billion milestone, Nongfu Spring has completed the dual crossing of the public opinion cycle and the growth cycle. With a healthier product mix, more stable operational quality, and a more solid user base, it is entering a new phase of large-scale, high-quality development.