Amid a thriving beverage business, the company saw brisk growth in its tea drinks
Chinese bottled water and beverage giant Nongfu Spring (09633) (Chinese: 农夫山泉) recorded a revenue of CNY 29.7 billion (USD 4.663 billion) in 2021, up 29.8% year on year and higher than the estimated revenue of CNY 28.54 billion, according to its financial report filed on March 28.
The company also posted a net profit attributable to owners of the parent company of CNY 7.162 billion last year, surging 35.7% over 2020 and higher than the estimated CNY 6.82 billion.
The brand’s main products of bottled water, tea, functional beverages, and fruit juices accounted for more than 90% of its sales. Each category showed varying degrees of growth, reaching 22.1%, 48.3%, 32.3%, and 32.2%, respectively.
The growth came as the beverage sector returned to profitablility after being hit by the Covid-19 epidemic. According to the report, data from the China Beverage Industry Association showed that China’s beverage manufacturing industry revenue surged 13.5% year on year. Bottled water rose 12%, tea and other soft drinks grew 12%, juice jumped 14%, and carbonated beverages spiked 19%.
Nongfu’s increases exceeded the industry average. In particular, the 48.3% growth of the tea segment seemed impressive, compared to other beverage giants such as Master Kong (00322: HK) (Chinese: 康师傅) and Uni-President (00220: HK) (Chinese: 统一), whose tea beverage lept 13.78% and 15.2% respectively.
Meanwhile, the brand’s other products, including soda water, fizzy drinks, and coffee, soared 66%, though this sector only accounted for 6%, or CNY 1.8 billion, of its total revenues. In March this year, the company launched a carbonated tea drink.
In the report, the company also looked into its future. With soaring prices of raw materials such as PET, which aligned with international oil prices, and the rising packaging and energy costs, water and beverage manufacturers are grappling with mounting expenses. Nongfu vowed to adjust operations according to changing situations.