New horizons: China water giant Nongfu Spring moves into carbonated coffee market

By Tingmin Koe contact

- Last updated on GMT

The firm will add a carbonated coffee beverage to its range.
The firm will add a carbonated coffee beverage to its range.

Related tags: Coffee, RTD, Nongfu Spring

Chinese mineral water firm Nongfu Spring is launching a bottled carbonated coffee product, which will see it go head-to-head with the likes of Coca-Cola for market share.

The carbonated coffee product will be first sold in the 1st​ and 2nd​ tier cities in China, with e-commerce, schools, and new retail as the main sales channels, Dr Zhou Li, the VP / secretary of the board at Nongfu Spring said in response to queries from FoodNavigator-Asia.

The retail price of the RTD carbonated coffee is set at RMB$5 (US$0.70) to RMB$6 (US$0.90) per bottle.

The firm took two years to develop this new product, using coffee beans sourced from Ethiopia and Brazil.

The company has undertaken an aggressive spate of new product launches since the start of this year. Last month, it launched plant-based yogurt which comes in three flavours.

Earlier in March, it gave its bottled fruit flavoured tea beverage “Tea π” a new look, while in January, it added two new flavours – green mango and white peach – to its sports drinks series “Jian Jiao”.

Last August, it even went into the white rice market, selling  rice farmed in North East China.

Asked the reasons behind entering new product markets, Dr Zhou said that intention was to “satisfy the ever-changing consumer demands”.

“Once we have discovered new market opportunities and are equipped with sufficient technical knowledge; that will be the time when Nongfu Spring enters a particular new market.

“As the leading bottled beverage manufacturer in China, Nongfu Spring is committed to launching high quality and innovative beverages, so as to satisfy the ever-changing consumer demands and to upgrade the consumption experience,” ​he said.

Globally, Coca-Cola announced earlier this year that it was planning to launch Coca-Cola Coffee​ – a drink which blends Coke soda with coffee – in 25 markets by the end of this year.

The carbonated coffee, which has slightly less caffeine than a normal cup of coffee, but more than a can of coke, is catered to specific occasions, such as “the mid-afternoon energy slump at work,”​ according to Coca-Cola CEO James Quincey.

China’s coffee market

In terms of product format, instant coffee remains the most commonly consumed format in China, occupying more than 70% of the market share, according to data from Taobao and Tmall​.

This is followed by coffee beans and coffee capsules, while RTD coffee had the smallest market share as of year 2017.

Some of the most searched RTD coffee brands were Starbucks, Nestlé​, and Bernachon.

On the other hand, new retail coffee stores and convenience stores are increasingly popular amongst Chinese consumers for their caffeine fix, according to Mintel’s report about on-premise coffee in China last December.

“Brands in these channels give consumers an image that a lower price does not mean a lower quality. As shown on brands’ advertisements, their coffee beans are from well-known coffee regions and in good coffee varieties,” ​said the report.    

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