vertically integrated model

Nongfu Spring Chairman Zhong Shanshan addressed outsourcing speculations at the company’s 2024 shareholders meeting, asserting its fully integrated production model excludes third-party manufacturing. He emphasized proprietary control from water sourcing to labeling, supported by 14 protected reserves and 30 facilities enabling localized supply chains within 500 km of markets. Analysts highlight this vertically integrated strategy as a competitive differentiator despite higher costs, aligning with Nongfu’s 21% market dominance in China’s $15B bottled water sector. Zhong’s remarks reflect broader industry debates about balancing scalability with quality assurance amid rival partnerships like Wahaha-Jinmailang.