Genki Forest Founder: Develops a large number of new products each year, but not many are ultimately launched to the market.

Ask AI · How does Nongfu Spring improve innovation efficiency through an internal “horse race” mechanism?

Not long ago, Nongfu Spring held a record-setting event called “Creation Camp 2044” at its manufacturing plant in Xianning, Hubei, where the company demonstrated the process of launching new products on site.

Different from the usual way beverage companies release new products, more than a dozen Nongfu Spring product managers took turns on stage to pitch self-developed new products using data and stories. Below and online, a panel of several thousand consumers, management trainees, and industry professionals voted in real time with voting devices for their preferred products; the winners with the highest votes then went directly to small-batch trial sales.

On the “Temporary Failure” wall on the factory’s second floor, several products that helped Nongfu Spring open up the market are quietly displayed, including milk tea, burning tea, fiber tea, Jianmei light, and also cola-flavored sparkling water, which had received extensive channel promotion resources. A prominent note on the wall reads: Encourage innovation, but also cherish failure.

“Nongfu Spring makes substantial annual investments in innovation and R&D, producing large numbers of new products or new flavors. But in the end, not many are the ones we ourselves bring to the market,” Nongfu Spring founder Tang Binsen explained. “Innovation can only summarize a systematic methodology through a sufficient number of trial-and-error samples, and then create innovative products by leveraging Nongfu Spring’s existing systems and talent.”

To sustain its innovation capability, in recent years Nongfu Spring has focused on two efforts: building an efficient organization and establishing a professional testing base.

Starting in 2023, Nongfu Spring abolished multiple large product divisions, such as the CNY division for sparkling water and milk tea, and the NB division for Alien electrolyte water. It then moved to a flat product-division system. Product lines directly connect with both the market and the production side, establishing a PDCA planning—execution—closed-loop mechanism, and using a mode of independent development by multiple teams within the same category and an internal “horse race” to advance product innovation.

The product managers who took the stage above are a direct manifestation of this mechanism.

According to people close to Nongfu Spring, internal product managers are fully responsible for the entire chain—from R&D research, product design, to market marketing—endowed with relatively high decision-making power and resource-allocation power.

The sheer volume of innovation and rapid new launches will raise R&D, production, and marketing costs. To address this, Nongfu Spring and the Xianning municipal government jointly built an R&D innovation testing base. The first phase has a total investment of 200 million yuan. It is a factory specially built for R&D, with its core role being a public-service experimental platform that efficiently supports everything from R&D to small-scale trials and mid-scale trials, from creative ideas to product prototype transformation.

Tang Binsen said that traditional large-scale beverage production lines cannot support process exploration and innovation attempts. Xianning Innovation Institute builds experimental lines according to companies’ long-term plans, which will provide support for Nongfu Spring to continuously develop high-quality products.

In addition to serving its own R&D, it is reported that over the next 3 years, Nongfu Spring’s Innovation Institute trial base plans to serve 500 beverage companies and develop 2,000 new products; the mid-scale trial base plans to serve 500 beverage companies and produce 15 million cases of healthy beverages.

In February, in an internal letter titled “Focus, Concentrate, and Respond to Change Without Changing,” Tang Binsen also mentioned that in 2025 the company achieves strategic focus by controlling expenses, controlling pricing, and controlling SKUs, thereby continuously improving profitability. In 2026, continuing the approach of “don’t fuss, build internal capabilities, and seek practical results,” it reaffirms returning to the essence of business and emphasizes the integration of organizational efficiency with innovation operations.