Opportunity looms for premium Chinese water brands

Exploration was further delayed by the release of a new national standard for mineral water in 2008. The standard imposed stricter upper limits for several substances. The standard for bromate, a potential carcinogen, for example, was lowered to below 0.01 milligram a liter.

In 2007, Pang finally found the right place — Xidatan on the Kunlun Mountains, a site on the Tibetan Plateau that is 4,100 meters above sea level.

The site, according to Pang, provides sufficient and high-quality mineral water, is backed by a runoff made of melting snow, and has a low population density, making it easier to conserve water quality.

But that wasn’t enough. To test if the water quality was stable enough, Pang sampled the water every month for six months, and sent the samples to three independent laboratories. The results finally persuaded him to build his factory there.

The efforts by Pang and his team have paid off.

In February, Kunlun Mountains Natural Mineral Water won the Watermaster’s Golden Award of Excellence at the annual Berkeley Springs International Water Tasting, an event dubbed the water industry’s Oscars.

Tian Wei, JDB Group’s brand manager, said the reward was a proud moment for her and for the company.

"It’s the first time that a Chinese brand, or even an Asian brand gets this honor," Tian said.

She said that JDB was invited by Arthur von Wiesenberger, president of the event, after he tasted the water in China. He even flew to Xidatan to check the site.

"He tasted the water on the mountains and found the taste to be almost the same as the bottled water," Tian said.

Brand recognition

But despite the industry’s recognition, what nags Pang and other people in the business is the low recognition among ordinary consumers.

Industry experts said that the biggest challenge is to persuade the notoriously price-sensitive Chinese consumers to pay extra for high-end water.

"The biggest bottleneck for the development of the high-end water market is the poor recognition among consumers toward high-end water brands," said Liang Mingxuan, a food industry analyst with CIConsulting. "In mature markets, such as Europe, people have high requirements for water. But not here."

However, Liao of the China Mineral Water Committee cautioned that high prices do not necessarily mean high-end water.