Nongfu Spring Achieved Revenue CNY 33.2 Bn, Increase of 11.9% YOY

Consumer Staples Author: Yunfeng Zhang Mar 30, 2023 02:08 PM (GMT+8)

2022 is not an easy year for any company in the food and beverage industry. What is the driving force behind Nongfu Spring(Chinese: 农夫山泉) maintaining double growth in sales and profit?

Nongfu Spring

On March 28, Nongfu Spring's 2022 financial report was released. During the reporting period, the company achieved revenue of CNY33.239 billion, up 11.9% year on year; profit attributable to owners of the parent was CNY8.495 billion, up 18.6% year on year; earnings per share was CNY0.76, up 18.8% year on year. In the 2023 Hurun Rich List released a few days ago, the founder of Nongfu Mountain Spring, Glittering Zhong, reigned as the richest man in China and ranked 15th in the world with a fortune of CNY465 billion.

As for the performance of Nongfu Spring 2022, some analysts said that during the epidemic, Nongfu Spring used its own brand effect and scale effect to achieve good results, showing the Matthew effect in the industry that the strong are stronger and the weak are weaker.

Nongfu Spring has many products under its umbrella, but packaged drinking water has always accounted for the bulk of its revenue. The financial report shows that the company's revenue from packaged drinking water products was about CNY18.263 billion in 2022, accounting for 54.9% of total revenue, a slight decrease from the previous year. Meanwhile, the sales revenue growth rate of tea beverage products was very significant, reaching CNY6.906 billion in the reporting period, accounting for 20.8% of total sales revenue, up from 15.4% in 2021. In addition, sales of functional beverage products and juice beverage products also increased slightly.

In fact, compared with competitors' product lines with a wide range of categories, Nongfu Spring's product SKUs are based on the principle of excellence and precision, and it will continue to cultivate the promising tracks and continuously carry out market investment and consumer education, compared with other products in the market, Nongfu Spring's products have a higher success rate and longer life cycle.

Nongfu Spring continued to promote the growth of packaged water business, while beginning to cultivate other new products such as tea drinks market, with the stability of the packaged water business, the other brands cultivated in the early stage gradually matured, the contribution to the overall performance significantly improved, to achieve a smooth succession of product curve.

According to statistics, the R&D cost of Nongfu Spring 2022 reached 277 million yuan, compared with 125 million yuan in the same period of the previous year. Focus on R&D mechanism and investment, which makes Nongfu Spring's investment scale industry leading.

In the future, Nongfu Spring will continue to increase investment in R&D and conduct in-depth market research to win the favor of the new generation of youth, the largest potential consumer group in the market.