As soon as Master Kong resigned, its senior management disclosed that the mastermind of the sensational "Shuiyuan Gate" incident was its competitor Nongfu Spring. The competition in the bottled water industry that violates business ethics has also been accumulated over many years.
Although the peak season for bottled water consumption has not yet arrived, the smell of water wars is already in the air. As the initiator and leader of "mineral water", before summer, Master Kong mineral water was once again accused of "making a lot of money from additives."
This news was first published in a well-known southern newspaper in April 2009 and was later quoted by many media. According to the report, adding "mineralizing liquid" or "fruit elements" to purified water can easily lead to chemical reactions between minerals and additives in mineral water. This neither meets international standards nor meets China's "Hygienic Standards for Drinking Water." But "Master Kong has achieved annual sales of billions of yuan by adding two food additives, magnesium sulfate and potassium chloride, to purified water."
This is regarded by the industry as a continuation of Master Kong’s 2008 “Water Source Gate” incident. The recent disclosure by a senior executive of the company who resigned has brought many questions about the "Water Source Gate" to the surface.
Severe damage to the "Shuiyuan Gate"
The "Shuiyuan Gate" incident occurred in Hangzhou. As an important town on the eastern coast, this provincial capital city, Shanghai and Nanjing form the golden triangle of economically developed areas in eastern China. Major beverage companies have also invested a lot of money to build factories here - including Master Kong, Nongfu Spring, Wahaha, Coca-Cola, Pepsi-Cola, and Wong Lo Kat, which is currently in the midst of the "Additional Gate" incident.
Tingyi Hangzhou Water Plant was built in 1994, covering an area of ??176 acres. It has four gates, of which the west gate is specially used for shipping. On the afternoon of July 17, 2008, two students who looked like students entered the Master Kong factory through the west gate while the security guards were not paying attention. They kept taking photos and were later discovered by security guards. Eventually, the two deleted the photos and left.
But a few days later, a post appeared on the Internet, causing Master Kong to encounter the most serious crisis in 10 years.
The post was posted on July 24, 2008, by a person named "Green Grass Pudding" in the Tianya community, which has about 20 million users. This is called "Master Kong: Where is your source of high-quality water?" The post "Secrets of Master Kong Water Plant" stated in the form of a secret: The water source of Master Kong's mineral water comes from tap water. It also pointed out problems such as the random accumulation of bottles in the factory and the reuse of discarded bottle caps. Previously, Master Kong had advertised that its brand of mineral water "comes from high-quality water sources."
Since it is in the photo section, the post is attached with a photo of the sewage pipe to illustrate where Master Kong’s “mineral water” is extracted. Master Kong determined that these pictures were taken in the Hangzhou Water Plant, but were “inconsistent with the facts”—some of the pictures published online came from the waste warehouse, which is far away from the water production workshop.
Within 38 hours from when this post was posted at 9 a.m. on the 24th to 23:00 on the 25th, there were more than 450 comments, all of which severely criticized Master Kong.
Subsequently, Master Kong's mineral water, which is booming in the market, encountered a series of bombardments - extending from water sources to origin, trademark labeling, pH value, business ethics and production quality.
According to incomplete statistics, this incident triggered more than 1,000 reprints and comments, and hundreds of millions of online reads. The "Latest Retail Research Report for December 2008" released by the well-known research company AC Nielsen shows that Master Kong's market share in terms of sales dropped from 18.1 in 2007 to 17.7 in 2008, making it the second largest company in the industry. According to the latest annual report released by Master Kong Holdings (00322 HK), after suffering the "Watergate" attack, the mineral water business turned from a profit to a serious loss of tens of millions of yuan within half a year.
Who entered the water plant?
In an interview with China News Weekly, the security guard at the Master Kong factory who was involved in handling the two strangers entering the plant to take photos said, “I felt at that time. This matter is strange.” After reading the posts and pictures on the Internet, he began to suspect that the two factory workers had some connection with the poster.
“At that time, I had just finished my inspection when I heard the news that ‘two suspicious persons were found taking photos in the factory area.’” He recalled, “After I rushed to the north gate, there were already two A security guard stopped two people, one tall and one short, for questioning because they focused their cameras on the scrap room and the sewage pool. "
The security guard asked the two to show their IDs, but they were refused. "They claim to be consumers of Master Kong and have the right to visit the factory. They even took out their mobile phones to call the police."
While the two sides were in a stalemate, the taller of the two took out a blue card-like ID. The security guard said that he saw the name on it: Wu Chaochao.
“Then the two of them took the initiative and said, ‘We can delete the photos we took and we can leave.’” A security guard recalled to China News Weekly. After the camera read "Delete All" and was checked by a Master Kong employee, the two were released. But after exiting the north gate, the security guard discovered that the two people who claimed to be "Polytechnic University students" did not turn west towards the Polytechnic University.
"I felt strange and wanted to catch up and ask for details. But the two of them had already walked 50 to 60 meters and ran away when they heard my shout." said the security squad leader. Seeing that it was difficult to catch up, everyone returned to the factory area.
At the west entrance of Tingyi Factory, above the passage between the warehouse and the factory building, and at the north entrance, three surveillance cameras recorded the whereabouts of two uninvited guests.
The camera shows: The two men first walked north along the wall for about 130 meters, and then headed east into the passage between the warehouse and the factory. After walking about 300 meters to the east side of the factory, we then headed north to the sewage treatment equipment pool and waste room. Among them, a young man with a bag wearing a T-shirt and jeans was responsible for taking photos, while another short young man wearing dark clothes was responsible for "lookout". During the filming, they were spotted by security guards.
Wu Chaochao at the Water Summit
Although Master Kong found some information about the infiltrator "Wu Chaochao" from the Internet, it is still unable to confirm the true identity of this person. At this time, the China Beverage Industry Association will hold the "2008 China·International Drinking Water Summit" in Shenzhen, and all major bottled water companies will participate. An anonymous email informed that "Wu Chaochao" would also attend the meeting, so members of the incident handling team from Master Kong Hangzhou Water Plant rushed to the venue.
“I saw the ‘candid photographer’ at a glance. He was standing beside the Nongfu Spring booth at the back of the venue.” The security squad leader told China News Weekly, “The young man had long hair. , The forehead is a bit wide, exactly like the person who took the photo that day. At that time, I argued face to face with him for more than 10 minutes.”
Master Kong obtained a business card of Wu Chaochao through a familiar media person. They also took photos of Wu Chaochao and him at the press conference held by the chairman of Nongfu Spring.
Picture description: From left to right: 1. A close-up view of Wu Chaochao when he sneaked into the north gate of Master Kong Hangzhou Water Plant; 2. Wu Chaochao standing in front of the Nongfu Spring exhibition area at the Water Summit; 3. Wu Chaochao at the Nongfu Spring press conference With a senior executive of Nongfu Spring, 4. Wu Chaochao’s business card.
The person who secretly photographed "Wu Chaochao" claimed to be a student of Zhejiang University of Science and Technology, and on the business card of "Wu Chaochao" that appeared at the summit, the name "Yangshengtang" (the holding company of Nongfu Spring) Advertising Center Media Planning Deputy Manager's title.
Is Wu Chaochao someone else? On May 4, 2009, a reporter from "China News Weekly" checked the student list of Zhejiang Science and Technology University - among the students in 2008, there was no one named Wu Chaochao.
At the Talent Center of Hangzhou Economic Development Zone, the reporter found three registration information named "Wu Chaochao", all from Zhejiang University. The information of one of them shows that he graduated from the Institute of Communication, School of Humanities, Zhejiang University in 2008 with a master's degree.
A search on the Internet for Wu Chaochao, an employee of "Yangshengtang", shows that this person graduated from the School of Foreign Languages, Zhejiang University in 2006 as an undergraduate, and was later admitted to the Institute of Communication, School of Humanities, Zhejiang University, and received a master's degree. He has published many articles on corporate brand establishment, reshaping and integration in various publications, focusing on brand strategy research materials.
One of the papers published in the 8th issue of "Advertiser" in 2007 is "The Art of Balancing Public Welfare and Business - The Business Wisdom of Nongfu Spring's Public Welfare Marketing." In addition, his works also include "Master Kong's Next Goal: Catching Up with Nongfu Spring?" ”, “Master Kong plotted against farmers, Wahaha couldn’t get up”, etc.
These contents published in 2007 were eventually widely quoted by the media in the 2008 Master Kong "Shuiyuanmen".
On June 2, 2009, a reporter from "China News Weekly" called Wu Chaochao, deputy manager of media planning at the advertising center of Yangshengtang Co., Ltd. Wu Chaochao said he "cannot answer" whether the person who took the photo was himself. .
“Whether it’s me or someone else, I don’t think it’s very important. It just depends on whether (what’s said online) is true,” he said.
As for the question of "what standards and bottom lines should commercial competition abide by?" Wu Chaochao said that he has not considered it yet, but which kind of water is healthier and more suitable for consumers to drink is a question beyond The process of becoming more enlightened. "If everyone is in harmony, the consumers will be the ones hurt in the end."
Where does “high-quality water” come from?
In an interview with China News Weekly, Master Kong’s above-mentioned resigned senior executives reflected: Nongfu Spring seized the opportunity in June 2008 The slogan "choose high-quality water sources" in the advertisement for the mineral water replaced by Master Kong was used as an opportunity to successfully attack Master Kong's position in bottled drinking water through candid photos and posts on Tianya.
After Master Kong's "high-quality water source" was questioned by consumers, Nongfu Spring changed the advertisement of its own bottled water brand Nongfu Spring natural drinking water in 2009 to promote "real" "real" water to the consumer public. "High quality" water source. Nongfu Spring emphasizes that it "comes from high-quality water sources and never uses tap water"; "we are just porters of nature"!
Relevant resources provided by Nongfu Spring show that most of the company’s factories across the country choose water source areas, such as Qiandao Lake Reservoir in Hangzhou, Danjiang Estuary in Hubei, Wanlv Lake Reservoir in Guangzhou, and Jingyu in Changbai Mountain.
Wu Chaochao also said in the article "Master Kong "Secretly Plots" the Farmers": "The minerals in the Nongfu Mountain spring water are difficult to obtain: first, you must choose the natural water source in the cold depression deep in the mountains, and sign a contract with the local government. The use agreement is for at least 50 years, and a large amount of development fees will be paid. Then the production base will be built in a place far away from human habitation, and the finished products will be transported back to the big city through long transportation routes. At the same time, the funds used to protect the ecology of the water source will also be spent every year. A huge expense. According to a rough estimate, the cost of each bottle of Nongfu Spring is 4 cents, and the profit of Nongfu Spring is slimmer than that of any kind of drinking water. The mineral properties that Nongfu Spring paid for at a cost of 40 cents were easily obtained by Master Kong for a penny.”
The so-called penny, the article explains: “Mineral water (Master Kong’s flagship product). ) is made by adding artificial mineralization liquid to pure water. At present, the average market price of one kilogram of mineralization liquid is 80 yuan, and the average input ratio is 1:5000. In other words, one kilogram of mineralization liquid can produce 5. tons of mineral water. If calculated based on the current popular 550 ml bottle, the cost of adding less than one cent can make Master Kong have 'mineral properties'."
But the quality of Nongfu Spring's water source is very different. How? According to the latest (March 19, 2009) issue of the "China Surface Water Quality Monthly Report" published by the China Environmental Monitoring Station, Qiandao Lake, one of the water sources of Nongfu Spring, has been classified as Category IV.
According to the classification of the Ministry of Environmental Protection, surface water is divided into five categories. The degree of contamination is from I to V. Class IV surface water is mainly suitable for general industrial water and recreational water areas with indirect human contact. In other words, the water in Qiandao Lake can only be used as industrial water, and even if it is used as recreational water, it cannot come into contact with the human body.
The world of water
One big brand’s high-quality water source is said to come from tap water, while another’s water source comes from a polluted lake.
What kind of world is the "source of life"?
In 2000, China’s bottled water market was still dominated by companies such as Wahaha and Robust. The Master Kong brand had not yet entered the water industry, and Nongfu Spring (Yangshengtang), which had just switched from Guibiwan to produce pure water, did not account for Too big a market share. But an incident in April 2000 caused an uproar in the water industry.
On April 24, 2000, "Yangshengtang" announced that the company would stop producing purified water from that year - because "experiments have proven that purified water has no health benefits." Nongfu Spring's relevant advertisements also demonstrated comparative experiments between purified water and natural water, and concluded that purified water is harmful to health. This move caused a strong reaction in China's drinking water industry and opened up a battle over the source (species) of water for China's packaged drinking water.
On June 8, 69 purified water merchants, including Wahaha and Robust, gathered in Hangzhou to hold the "2000 Seminar on Maintaining the Healthy Development of Purified Water." After the meeting, a joint statement was issued to collectively condemn the unfair competition of "Nongfu Spring". On June 14, Wahaha Group Co., Ltd. filed a lawsuit against Zhejiang Qiandao Lake Yangshengtang Drinking Water Co., Ltd., which produces Nongfu Spring, on the grounds of "unfair competition." Since then, 69 purified water production companies have submitted complaints against Nongfu Spring to five departments including the State Administration for Industry and Commerce, the State Administration of Quality and Technical Supervision, the Ministry of Education, the Ministry of Health and the China Association for Science and Technology, requesting sanctions.
Here, both sides used means, including media expert comments and advertisements, to debate whether purified water is harmful to health.
The "water battle" subsequently escalated, forcing some industry associations and relevant government departments to join in and express their stance. On June 12, 2000, the China Beverage Industry Association issued a statement: Consumers can drink bottled purified water with confidence. Since then, the Ministry of Health said in its reply to the China Beverage Industry Association: "The production and operation of purified water should comply with the relevant provisions of the Food Hygiene and Drinking Water Hygiene Supervision and Administration Measures, and the products should meet the hygiene requirements of Bottled Drinking Purified Water Standards" (GB1724-1998). Purified water products that comply with the above relevant regulations and hygienic standards are considered safe, hygienic and harmless."
The debate on whether "purified water" is harmful. , seems to have come to an end.
On the surface, Nongfu Spring has failed in this water dispute. However, many industry experts have seen that through this "water source" dispute, Nongfu Spring has expanded its popularity, promoted its own ideas, and gained new markets. In the following years, Nongfu Spring occupied the second position in the market.
On September 12, 2006, some media published an exclusive interview with "Zhong Suisui: I am not afraid of being a public enemy in the water industry". There is this description: Zhong Suisui, chairman and executive of Nongfu Spring Co., Ltd., is an "alternative businessman" who often breaks some of the long-recognized rules of the game. After the "water war" in 2000, he almost became a "public enemy" in the industry. In 2006, he once again went against the norm and held high the banner of "weakly alkaline drinking water is good for health" and launched a drinking water PH value testing activity for consumers in the South China market. His peers labeled it as "hype and unfair competition". Notorious"...
In 2007, as Master Kong built a mineral water plant at the doorstep of Nongfu Spring, the competition between "masters" and "farmers" began to intensify. In April 2008, Nongfu Spring launched an activity to test the pH value of drinking water, pointing out the "pseudo-health" of Master Kong's mineral water. This incident later evolved into a "water source scandal" until April 2009, when Master Kong's mineral water Material Water has once again been questioned as "making big money with additives".
At present, this kind of competition that has huge destructive effects on the industry has been opposed by some industry insiders at the 2008 Water Summit. On the same day, a "China Packaged Drinking Water Industry Self-Discipline Convention" was adopted. The second "market environment" requires respect for peers, rational competition, and opposition to unfair competition.
"If the water war continues, it will eventually happen. There is no winner - consumers will only choose to drink boiled water, and merchants lose the entire market for bottled drinking water.
"An expert said, "The country will also lose the economic benefits brought by bottled drinking water, and taxpayers' money will be used to build more tap water stations. ”