Posted by Mark J. Miller on August 13, 2012 05:48 PM
Evian, Volvic, and Perrier have long dominated the high-end and high-margin water market in China, but things are changing and Chinese brands are charging forward to grab their share.
Evian was inspected for quality issues for the sixth time in six years earlier this year and recently announced that it wasn’t clear exactly how the excessive nitrate found in its product actually got there, as Beverage Daily notes. Local brands, meanwhile, are eager to entice drinkers their way.
The five-year-old Tibet 5100 Water Resources Holdings Ltd., a Chinese company that produces 5100 Tibet Glacier Spring Water, “said its revenues in 2011 were 633 million yuan ($99.2 million), up 76 percent from the previous year,” China Daily reports. The company’s gross profit margin was 79 percent, up from 64 percent in 2010. But Tibet 5100 is an anomaly.
According to Liao Lei, secretary-general of the China Mineral Water Committee of the China Mining Association, most of the more than 100 major domestic mineral water producers in China, he majority are losing money or making small profits, and that is partially due to poor name recognition as well as poor brand loyalty. The industry, however, is taking notice.
China’s Kunlun Mountains Natural Mineral Water won the water industry’s “Oscars,” the Watermaster’s Golden Award of Excellence at the annual Berkeley Springs International Water Tasting, this past February. Still, that hasn’t translated into cash just yet. And it’s hard to tell if it ever well with such an oversaturation of companies and lack of strong branding.