Opportunity looms for premium Chinese water brands

Foreign bottled water brands Evian and Volvic stand next to Chinese brands 5100 Tibet Glacier Spring Water, Kunlun Mountains Water, Qomolangma Glacier Mineral Water and Nongfu Spring. China's water industry defines high-end water as products sold for more than 4 yuan per bottle of about 500 milliliters. [Photo/China Daily]

Liao Lei, secretary-general of the China Mineral Water Committee of the China Mining Association, said that Tibet 5100 is one of the few brands making a profit. Of the 100-odd major domestic mineral water producers, most are suffering losses or only making meager profits.

According to Liao and other industry experts interviewed by China Daily, low recognition, among other factors, are hindering the companies’ chances of transferring the huge potential into tangible profits.

Even though the public isn’t aware of it, the natural mineral water business involves little processing.

"We just do some basic filtering. But even the filtering is a preventative measure because there are virtually no impurities in the water," said Pang Zhenguo, general manager of quality assurance at the JDB Group, which produces Kunlun Mountains water.

Daunting task

Compared with manufacturing, finding an appropriate water source and then placing the product in stores’ shelves is a much more daunting task.

Pang said it took him 10 years to spot a place on the Kunlun Mountains in West China and build a factory there.

The time span, which initially seems exaggerated, becomes more plausible after Pang explains his criteria.

The water quality is the top concern, and mineral water from Kunlun Mountains meets that criteria. But according to the China Mineral Water Committee, there are 4,400 spots capable of producing mineral water across China.

Other factors must be crossed out also, which makes the process so time consuming.

Pang said that low population density, easiness to conserve water quality, and water quantity are all critically important for the selection of the water source. In order to find the right source, he said he had to scour "every corner" of Tibet, a region believed to have some of the few uncontaminated water sources in China.

But several places in Tibet — which has also the best water quality — either didn’t have enough water or it wasn’t easy to conserve the water quality. So they had to be dropped from the list.

"One spot in Tibet had good water quality, but it wasn’t far from a highway. The road made it difficult to set up a large conservation area to prevent contamination," said Pang.

The current site for Kunlun Mountains water is protected by JDB with a conservation area of 11 square kilometers.

Pang said that an area on the Changbai Mountains in Northeast China was considered, but the fact that too many domestic companies use the mountains for their branding made him drop it.

"The water source is the most valuable asset for a mineral water brand. If another company which uses the same asset does something wrong, it will be an irreversible damage to my brand," Pang said.