- Packaged water growth outpaces peers; tea business emerges as new engine
- Channel strategy and offline focus underpin high-quality expansion
Nongfu Spring, China’s leading beverage producer, bucked a slumping packaged water market in 2025, posting annual revenue of 52.55 billion yuan ($7.61 billion), up 22.5% from a year earlier.
This marked the first time the Hangzhou-based giant’s annual income exceeded 50 billion yuan. Net profit attributable to shareholders rose 30.9% to 15.87 billion yuan, according to its March 24 earnings report.
Revenue from packaged water reached 18.71 billion yuan, a 17.3% increase year over year, reflecting the company’s deliberate shift away from deep-discount e-commerce sales in favor of offline channels.
Analysts attribute the growth to Nongfu Spring’s tight control of e-commerce share and disciplined pricing, which guaranteed profitability while competitors embroiled themselves in a war of subsidy-driven online promotions.
Industry insiders note that Nongfu Spring’s distributors earn roughly 1.5 to 2 times the average sector margin, creating incentives to actively promote the brand and sustaining a positive channel ecosystem.
The company’s 2025 selling and distribution expenses rose 6.8% to 9.8 billion yuan, significantly below revenue growth, and their share of total income fell by 2.8 percentage points, the earnings report shows.
As e-commerce accounted for 14.1% of China’s retail beverage sales in 2025, the online channel has become a “price war hotspot,” squeezing margins as competitors increasingly rely on platform subsidies.
Nongfu Spring’s record earnings suggest its channel efficiency remains a major competitive moat.
Dual growth engines
The company’s tea segment emerged as another growth driver, generating 21.60 billion yuan in revenue, overtaking packaged water to become the largest business line at 41.1% of total sales.
Brands Oriental Leaf and Tea Pi powered the expansion, though their individual contributions were not disclosed.
Goldman Sachs said in a research note that Nongfu Spring’s tea sales in the second half of 2025 grew 38% year-on-year, surpassing forecasts by 21%, supported by the “open-cap prize” promotion and winter channel strategies.
The strong performance underscores the brand’s evolution from a single-category water producer into a dual-engine beverage company.
According to Zhongtai Securities, a stock brokerage, the company’s market share in China’s sugar-free tea segment reached 79.36% by June 2025, up 10.94 percentage points from a year earlier.
Competitors reported contrasting results. Master Kong’s beverage revenue fell 2.9% to 50.12 billion yuan, accounting for 63.4% of total group sales.
Uni-President China posted full-year revenue of 31.71 billion yuan, up 4.6%, with net profit rising 10.9% to a record 2.05 billion yuan.
Wahaha did not disclose figures, only projecting a full-year revenue growth of 500 million yuan, while Genki Forest forecasted more than 14 billion yuan in 2025 revenue, a 26% year-on-year increase from 11.7 billion yuan in 2024.
