“We aim to increase Baiksan's annual sales, currently at 110 billion won, by more than 20% within five years, and raise the proportion of sales from China, which is currently at 25%, to 30%.”
Kim Sang-heon, marketing director at Nongshim, noted during a press conference held on the 16th in Yianbaihe, Yanbian Korean Autonomous Prefecture, Jilin Province, China, that “many consumers still do not know that the source of Baiksan water is located at Baekdu Mountain. We will emphasize the quality of the source based on data in the domestic market and actively develop demand in inland China.”
Baiksan water is a bottled water brand launched by Nongshim in December 2012. Nongshim has exclusive rights to use Naeducheon, located at an altitude of 670 meters in Yianbaihe, as its source through a contract with the Chinese government.
Although Baiksan's sales were only 24 billion won in 2013, following the completion of a new factory in 2015, it has steadily grown to over 100 billion won in annual sales since 2019. By the end of the first half of this year, cumulative sales are expected to exceed 1.1 trillion won.
However, Baiksan's sales have stagnated around 100 billion won due to increased competition as more players enter the bottled water market. According to a 2023 survey by NielsenIQ Korea, Jeju Samdasoo, produced by the Jeju Special Self-Governing Province Development Corporation, holds about 40.3% market share, ranking first. LOTTE Chilsung Beverage's 'Isis' comes in second with about 13.1%, while Nongshim's Baiksan ranks third with about 8.3%.
In the domestic market, Samdasoo has earned the reputation of being 'the national bottled water' with high trust and recognition. Isis has increased its market share by utilizing LOTTE Chilsung Beverage's extensive distribution network. Additionally, HiteJinro's 'Soksoo,' Pulmuone's 'Pulmuone Spring Water,' and Dongwon F&B's 'Dongwon Spring Water' also enjoy relatively high recognition based on their long history.
There are now more competitors than in the past. LG H&H entered the bottled water market last December with the launch of the bottled water brand 'Woollim Water.' Earlier, ORION launched 'Jeju Premium Lava Water' in 2019. Coupang has been distributing its private brand product 'Tamsasu' at lower prices than other bottled water companies on its platform since 2017.
In this situation, Nongshim's plans to expand the Baiksan water business are also facing setbacks. The land secured by Yanbian Nongshim is a total of 291,510 square meters, equivalent to 88,336 pyeong, which can accommodate two more factories of the same size as the first factory (with a building area of 82,133 square meters). An Myung-sik, president of Yanbian Nongshim, said, “There are currently no plans for equipment expansion, but we are prepared to build more factories depending on future market conditions.”
Starting this year, Nongshim plans to launch a campaign targeting the domestic market, emphasizing a 'natural filtration period of 40 years' from Baekdu Mountain's Cheonji to Naeducheon as the source. The natural filtration period refers to the time rainwater takes to be absorbed by the surface and pass through underground rock layers. The longer this period, the cleaner the water becomes, and the natural mineral content increases, which affects the quality of the bottled water.
According to a study by the Korea Institute of Geoscience and Mineral Resources (KIGAM), groundwater naturally discharged from Naeducheon is estimated to have flowed for about 40 years through a total of 45 kilometers of protected underground rock layers, starting from rainwater that fell at Baekdu Mountain's Cheonji.
Nongshim operates a factory tour program targeting tourists visiting Baekdu Mountain to actively promote the Baiksan brand. Over the past two years, an average of 5,000 visitors have come to the factory annually. Nongshim aims for a target of 10,000 visitors per year starting this year.
Nongshim also has the goal of expanding product sales in China. About 25% of Baiksan’s total sales occur in China. Nongshim has obtained rail transport rights from the Chinese government to transport its products throughout China via a railroad that connects to its factory.
In 2021, Nongshim received a top-grade '5A' rating from the China Natural Spring Water Committee for its evaluation of the Baiksan water source. This led to establishing an annual supply contract of about 100 million bottles (approximately 50,000 tons) with local distributors, starting production this month. Since 2022, they have also been producing a 5-liter product exclusively for China.
Shim Gyu-cheol, executive director of Nongshim's marketing department, stated, “As bottled water is simply bottled spring water, unlike other food products, manufacturers find it challenging to further improve quality or engage in similar activities. Consequently, price, quality, and the image of the brand are crucial.”
He added, “Among Korean corporations producing bottled water, Baiksan is the only product made from water sourced at Baekdu Mountain, and we pride ourselves on having the most advanced factory facilities. We will continue to actively share the stories behind Baiksan while expanding our business.”