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Ask AI · How does Nongfu Spring respond to industry-wide homogenized competition through micro-innovation?

Interface News reporter | Ma Yue

Interface News editor | Ya Hanxiang

If you’ve ever felt it from the shelves of a convenience store, you may sense that in today’s beverage industry, it’s already very difficult for truly disruptive innovations to emerge.

Most new products don’t create an entirely new category; instead, they package a combination of flavors, functions, usage scenarios, and emotional value within existing frameworks. As a result, competition in this industry is increasingly like a high-frequency micro-innovation contest of trial and error.

Against this backdrop, Nongfu Spring is moving into a more complex phase.

Just compared with the earlier stage when it relied on bubble water breakout products and internet-thinking to quickly go viral, what it faces now is no longer simply how to come up with a new concept again. Instead, it’s how to continuously convert new products into sales in an increasingly crowded beverage market.

In other words, the logic behind Nongfu Spring’s big breakout product is being replaced by more complex industry realities. It has to get pulled into deeper R&D and channel competition.

To put it in the founder Tang Bingsen’s words, Nongfu Spring is currently in a “forty-not-confused” state: “We’ve passed the survival phase, gone through deep reflection and adjustments, and we’re now entering a stage with a clearer target, steadier steps, and more pragmatic methods.”

This change first shows up in its investment in R&D and new product launches.

Interface News has learned that the company currently has two R&D centers—one at its Beijing headquarters, and the other in Xianning, where its Hubei factory is located.

The Xianning Innovation Institute began operations at the end of 2025. It was co-funded by the Xianning municipal government and Nongfu Spring. Its positioning is a one-stop R&D and innovation testing base, serving specifically the incubation of innovative categories and the landing and transformation of new processes, and it is equipped with pilot lines, mini-factories, and other equipment.

For beverage R&D, this means it can connect the key link from concept validation to small-scale production, helping ideas turn into products that can be tested and mass-produced more quickly.

This is also a new requirement that the micro-innovation competition in the beverage industry has come to impose on companies by now. Because it’s hard for the market to produce another big breakout category. Micro-innovation products therefore need to be rolled out on a higher-frequency schedule, seizing the window of opportunity from competitors.

Nongfu Spring is doing the same. It is currently building up a batch of new forces.

On March 30, Nongfu Spring held a new-product selection event at its Xianning factory called “Creation Camp 2044.” Interface News noted on site that more than ten product managers from Nongfu Spring took the stage one after another to recommend their beverage new products, totaling 19.

Nongfu Spring Creation Camp 2044 new products on stage | Photo taken by Interface News reporter Ma Yue

Overall, there are iterations of Nongfu Spring’s mature product lines, such as bubble water, Extraterrestrial electrolyte water, iced tea, and Haozizai. There are also new experiments trying to make some changes in the traditional beverage track—for example, Qingliang tea. In addition, there are new products tailored to different needs and scenarios, such as Cola beer, prebiotic-y probiotic bubble drinks, Shan Zha Sanjunzi, Dan Zhen brown rice milk, and others—for gatherings, breakfast, family reunions, and more.

Nongfu Spring Haozizai Qingliang Tea new product | Photo taken by Interface News reporter Ma Yue

Nongfu Spring boiled tea new product | Photo taken by Interface News reporter Ma Yue

Nongfu Spring Cola beer new product | Photo taken by Interface News reporter Ma Yue

Behind the new-product selection contest, there is actually also a internal “horse-racing” mechanism within Nongfu Spring’s new product R&D.

Interface News found that among the new products presented on stage, some categories and concepts were not divided according to fixed sub-brands. For example, the concept of vitamin water and electrolytes cross-appears across several new products; and the category of hawthorn juice also has two different product managers each producing new products. Previously, Nongfu Spring’s extraterrestrial electrolyte water was already a mature product line, and vitamin water is also its single product with the highest growth rate in 2025, with year-on-year growth of 128%.

Nongfu Spring vitamin water new product | Photo taken by Interface News reporter Ma Yue

This may also imply that Nongfu Spring uses a mode in which multiple teams independently develop products using the same category or concept, and compete internally, to build products.

From the perspective of Nongfu Spring’s product manager team, the average age is under 30. Its organizational structure is relatively flat, resembling a “special-operator-style team” model: a product R&D team can span functions such as product managers, R&D, design, marketing, operations, and more. It owns end-to-end responsibility for a single product from concept to launch, with relatively sufficient decision-making power and resource allocation authority.

This shift had already taken place several years ago. In 2023, Nongfu Spring abolished multiple large product business units, including CNY for Nongfu Spring bubble water and Milky Milk Tea under Yuemanmanyue, and NB for extraterrestrial electrolyte water and more. It shifted to a relatively flattened, specific product business-unit model, with relevant product lines directly connecting to departments such as the market and production.

But the problem is that the sheer volume of innovation and rapid product launches themselves do not directly equal competitiveness.

In an industry dominated by micro-innovation, the success or failure of new products has never depended only on flavor. It is closely tied to pricing, distribution efficiency, and even end-cap display at retail terminals. In other words, companies can certainly gain creative ideas through an internal “horse-racing” mechanism. But if they cannot further improve the success rate of new products, high-frequency trial and error may also evolve into a high-cost cycle of consumption.

Nongfu Spring is clearly aware of this reality.

“Every year, Nongfu Spring makes substantial investments in innovation and R&D, developing lots of new products or new flavors. But in the end, it doesn’t push many of them into the market itself.” Tang Bingsen explained, “Innovation can only produce a systematic methodology through enough trial-and-error samples, and then—based on Nongfu Spring’s existing system and talent—create innovative products.”

As Interface News observed at its Xianning factory, Nongfu Spring places its “temporarily failed” products on an entire wall display, including milk tea, ran tea, xian tea, Jianmei light, and more, and even bubble water with cola flavor that once required significant channel resources for promotion.

Nongfu Spring “temporarily failed” display area | Photo taken by Interface News reporter Ma Yue

“Encouraging innovation at its core means allowing failure. If you overemphasize success rate, then don’t say you’re doing innovation.” Tang Bingsen stated this way. “Nongfu Spring’s biggest core competitive strength in innovation is its tolerance for failure. A lot of our product managers—many projects fail. We tolerate it, and we allow them to keep doing it.”

Interface News learned that Nongfu Spring’s new products generally go through internal evaluation first, then online small-scale trial sales. Based on consumer feedback, they iterate and adjust. Only after they show a certain level of market acceptance do they scale up production and roll out through channels at a larger scale.

And to support this high-frequency trial-and-error and fast-iteration mechanism, Nongfu Spring is also continuously strengthening a heavier mode.

Interface News has learned that Nongfu Spring’s 7th self-built factory is currently being prepared. Adding the 6 factories that were already built and put into operation earlier, total cumulative investment has nearly reached 8 billion yuan. According to industrial and commercial registration information, on March 20, 2026, Nongfu Spring (Henan) Beverages Co., Ltd. was registered and established in Xuchang Economic Development Zone, with registered capital of 300 million yuan. Its business scope includes beverage production.

For a growing consumer goods company, perhaps a large amount of trial-and-error and innovation within a certain range—could also be the path that many big food and beverage giants have taken.

Food and beverage companies with a century-long history—such as Nestlé, Coca-Cola, PepsiCo, and others—also carried out various diversification attempts in their early days.

Coca-Cola also sold medicines and alcoholic beverages in its early years. But until it reached maturity, these consumer giants began to rely on single products with extremely long life cycles, powerful supply chains, and channels, forming a mature model characterized by low risk, high efficiency, and stable profits—so much so that they almost stopped wildly innovating categories.

For Nongfu Spring right now, the urgency in innovation iteration is also driven by the competitive environment of micro-innovation.

For instance, Nongfu Spring’s big single product, Extraterrestrial electrolyte water, is benchmarked against Bepan补水 (Dōngpéng). And more critically, corresponding to Nongfu Spring’s iced tea, Dōngpéng’s Guo Zhi Tea is also moving in aggressively. More importantly, Dōngpéng Beverages’ advantage lies in pushing deeper into lower-tier markets. In 2025, Dōngpéng Beverages’ revenue reached 20.875 billion yuan, which is also significantly higher than Nongfu Spring’s revenue scale.

However, Tang Bingsen also recognizes the logic of “less is more, and slow is fast.” “In the future, while encouraging open-minded thinking and being willing to try and fail, we will establish rigorous planning, execution, and closed-loop mechanisms (PDCA). We need to be sharp in spotting opportunities, but we also must ensure that the core fundamentals remain stable and operate efficiently,” he said.