Nongfu Shanquan’s first financial report: revenue decreased by 4.6%, multiple beverage revenue declined



Beijing business daily (reporter Qian Yu Baiyang) as of the close of March 26, the share price of Nongfu Shanquan fell 2.32%. The night before, the first annual report of Nongfu mountain spring after its IPO showed that in 2020, Nongfu mountain spring realized a net profit of 5.277 billion yuan, an increase of 6.6% over the same period last year, but its revenue declined. In 2020, the operating revenue of Nongfu mountain spring will be 22.877 billion yuan, 4.8% lower than that in 2019.

For the decline in revenue, the farmer’s spring said in the earnings report that floods in the first half of 2020 and COVID-19 in July 2020 and several provinces in China caused floods, affecting some of its retail outlets’ product transportation and product sales, and temporarily closing some retail outlets. At the same time, COVID-19 has reduced the willingness of consumers to travel, and has also had a negative impact on the performance of farmer’s spring in 2020.

According to product categories, in 2020, the income of nongfushanquan packaged drinking water products will be 13.966 billion yuan, 2.6% lower than that in 2019, accounting for 61% of the total income in 2020.

In addition to the decline of packaged drinking water products, the income of Nongfu Shanquan tea beverage, functional beverage and fruit juice beverage all declined by varying degrees. According to the financial report, in 2020, the annual income of Nongfu mountain spring tea beverage products was 3.088 billion yuan, down 1.6% compared with that in 2019, accounting for 13.5% of the total income in 2020. The annual revenue of functional beverage products was 2.792 billion yuan, 26.1% lower than that in 2019, accounting for 12.2% of the total revenue in 2020. The annual revenue of fruit juice beverage products was 1.977 billion yuan, 14.5% lower than that in 2019, accounting for 8.7% of the total revenue in 2020.

In addition, the revenue of “other categories”, including new products such as Nongfu mountain spring soda, coffee and plant yoghurt, will be 1.054 billion yuan in 2020, up 135.8% compared with that in 2019. However, the revenue of this business segment will account for less, accounting for 4.6% of the total revenue in 2020.

As for the reasons for the decline of a variety of products, Beijing business daily contacted and interviewed the relevant person in charge of Nongfu Shanquan, but as of press release, the other party did not reply.

According to Zhu danpeng, an analyst of China’s food industry, the main channels and market layout of Nongfu spring are in the first and second tier cities, and the epidemic has a great impact on Nongfu spring. In addition, compared with other brands, Nongfu Shanquan has a large number of beverage categories, but it is miscellaneous and small, and does not form a brand effect, so there will be a certain decline. In the future, Nongfu mountain spring should focus on the development of large single products, enhance the channel voice and market advantage.

Zhong Qiong, chairman of Nongfu Shanquan, said in the announcement that he would continue to promote the dual engine development pattern of packaged drinking water and beverage, and continue to improve the household penetration rate of drinking water products. On the other hand, Nongfu Shanquan will start with basic research and development, launch beverage products to meet the needs of consumers, and continue to implement multi brand strategy in beverage promotion.

In fact, Nongfu Shanquan has been trying to innovate. Recently, Nongfu mountain spring has launched a “Wuyishan Mountain spring water for tea making”. The product takes Wuyishan Mountain as the water source, and the label of the bottle clearly indicates “drinking mountain spring water (for tea making)”. At present, the product has been put online in the official flagship store of Nongfu Shanquan tmall.

There are also voices questioning whether it is “necessary” for Nongfu mountain spring to make tea. According to the recommended standard of tea making water jointly proposed by Nongfu mountain spring and Tea Research Institute, according to the research and recommendation of Tea Research Institute of Chinese Academy of Agricultural Sciences, mountain spring water with conductivity standard of 10-100 μ s / cm is the suitable tea making water. However, it is reported that in modern science, water containing more than 8 mg of calcium and magnesium ions per liter is called hard water, and vice versa. Practice has proved that the color, aroma and taste of tea soup are better when making tea with soft water, and the color and aroma of tea soup are greatly reduced when making tea with hard water.

However, Nongfu spring is still full of confidence in its future development. According to Nongfu spring, it is estimated that the sales revenue in 2021 will increase by 15% – 20% year on year.

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