Tsingtao Brewery is restructuring its water business. The "Youhuo" water brand whose core management team has a Nestlé background has welcomed a new operating executive again. Can it secure new incremental growth in the ebbing bottled water market?
In August 2020, Nestle sold its mainland China water business to Tsingtao Brewery Group as a package, turning "Nestle Pure Life" into "Tsingtao Brewery Pure Life". In the six years after the change of ownership, Tsingtao Brewery Pure Life has maintained a low profile in the national bottled water market, and a recent change in industrial and commercial information has brought it into the spotlight.
This time, the operating entity of "Tsingtao Brewery Pure Life" has changed again, not taken over by external capital, but through internal resource reallocation within Tsingtao Brewery Group. At a time when the bottled water market is facing simultaneous declines in both volume and price and the entire industry is under collective pressure, what can this internal integration bring to "Tsingtao Brewery Pure Life"?
Transferring Assets Within the Group
According to reports from Taishan Finance, Tsingtao Brewery Group (hereinafter referred to as "Tsingtao Brewery Group") has launched internal integration of its water business segment. Synchronized industrial and commercial information shows that Qingdao Brewery Youjia (Tianjin) Natural Mineral Water Co., Ltd. (hereinafter referred to as "Youjia Tianjin"), a subsidiary under Tsingtao Brewery Group, recently underwent a shareholder change, with the major shareholder shifting from Qingdao Brewery Youjia Healthy Drinks Co., Ltd. to Qingdao Beverage Group Co., Ltd.
Industrial and commercial information shows that "Youjia Tianjin" was founded in 1995 with a registered capital of 554 million yuan, mainly engaged in the production and sales of natural mineral water and purified water. The company was formerly known as "Tianjin Nestle Natural Mineral Water Co., Ltd.", which used to be a wholly-owned subsidiary of Nestle Group, and was acquired by Tsingtao Brewery Group in 2020. The latter held 98.15% of the equity of "Youjia Tianjin" through its wholly-owned subsidiary Qingdao Brewery Youjia Healthy Drinks Co., Ltd. The latest industrial and commercial information shows that all 98.15% of the equity has been transferred to Qingdao Beverage Group on September 14.
It is worth noting that the two entity companies involved in this equity transaction are both holding subsidiaries of Tsingtao Brewery Group. Among them, the equity transferor Qingdao Brewery Youjia Healthy Drinks Co., Ltd. is a wholly-owned subsidiary specially established by Tsingtao Brewery Group to take over Nestle's mainland China water business back then, and it is also the core operating platform of the group's health segment.
As for Qingdao Beverage Group, which took over "Youjia Tianjin" this time, it used to be an enterprise directly under the State-owned Assets Supervision and Administration Commission of Qingdao, just like Tsingtao Brewery Group, and it owns well-known brands such as Laoshan Mineral Water, Laoshan Cola, Baihuasheshecao Water, and Huadong Wine. In May 2025, in accordance with the deployment of the State-owned Assets Supervision and Administration Commission of Qingdao, 100% equity of Qingdao Beverage Group was transferred free of charge to Tsingtao Brewery Group, officially becoming the latter's secondary subsidiary.
Therefore, the change of major shareholder of "Youjia Tianjin" is essentially a resource consolidation within Tsingtao Brewery Group. Before the integration, there were two sets of water business systems under Tsingtao Brewery Group. One was the original "Pure Life" system, including brands such as Tsingtao Brewery Pure Life and Yunnan Shanquan, held by Qingdao Brewery Youjia Healthy Drinks Co., Ltd. The other was the "Laoshan" system, represented by Laoshan Mineral Water, Laoshan Baihuasheshecao Water and Laoshan Cola, belonging to Qingdao Beverage Group.
The two water businesses have different positioning. The main product of Tsingtao Brewery Pure Life is purified water, targeting the mass market at the 1-yuan price range, while Laoshan Mineral Water is positioned in the mid-to-high end. For Tsingtao Brewery Group, incorporating the "Youjia Mineral Water" where Tsingtao Brewery Pure Life is located into Qingdao Beverage Group can break down the synergy barriers between the two water businesses in channels and supply chains, making the integration truly necessary.
In fact, Tsingtao Brewery Group's integration of internal water business did not start recently. Industrial and commercial information shows that in February 2026, Yunnan Dashan Beverage Co., Ltd. has completed the change of major shareholder, with Qingdao Beverage Group taking over 100% equity from Qingdao Brewery Youjia Healthy Drinks Co., Ltd., with a subscribed capital contribution of 35 million yuan. Yunnan Dashan Beverage was also a Nestle subsidiary before 2020, with two core brands: "Dashan" bottled water and "Yunnan Shanquan" barreled water.
Some analysts believe that the successive transfer of water business entities such as "Yunnan Dashan Beverage" and "Youjia Tianjin" to Qingdao Beverage Group means that Tsingtao Brewery Group's water business territory is moving from decentralized ownership to centralized management.
The Dilemma of the Second Growth Curve
Behind the transfer of assets within the group is Tsingtao Brewery Group's urgent demand for a second growth curve as its core beer business faces pressure. Tsingtao Brewery Group is the controlling shareholder of the listed company "Tsingtao Brewery", and proposed to build a new growth curve many years ago. Its planning for the bottled water business did not start with the acquisition of Nestle's assets.
As early as 2019, Tsingtao Brewery Group announced its entry into the soda water sector, launching Prince Seaweed Soda Water to test the health drink track for the first time. The real strategic move took place in 2020, when Huang Kexing, then chairman of the group, proposed that Tsingtao Brewery Group take beer as its core business and build three major business segments: "Happiness, Health and Fashion", with the water and beverage business belonging to the health segment.
Under this framework, Tsingtao Brewery Group reached a strategic cooperation with Nestle to acquire Nestle's mainland China water business. At that time, Nestle's water business in the Chinese market included two major segments: imported and local production. The former included high-end imported water such as Perrier, S.Pellegrino and Acqua Panna, while the latter covered several brands corresponding to Nestle's three factories in Shanghai, Tianjin and Kunming in China, namely Pure Life, Dashan and Yunnan Shanquan.
What Tsingtao Brewery Group acquired from Nestle was exactly its locally produced water business, including the exclusive license of "Nestle Pure Life" in mainland China at the brand level, as well as the ownership of the Pure Life, Dashan and Yunnan Shanquan brands; at the equity level, it included the equity of three water business companies under Nestle Group located in Shanghai, Tianjin and Kunming. Regarding this acquisition, Huang Kexing, then chairman of Tsingtao Brewery Group, stated that the purpose was to launch the second track.
However, "Pure Life" has long held a low market position in China. Before the acquisition, according to data from third-party institutions at that time, the market share of "Nestle Pure Life" in China's bottled water market in 2019 was only 0.4%, ranking 11th, with a large gap from the first and second tier brands.
Six years have passed now, "Tsingtao Brewery Pure Life" still has a low profile in the national market, and the overall operating performance of the three water business companies acquired back then is not ideal. According to a set of announcements released by the listed company "Tsingtao Brewery" in January 2026, "Youjia Shanghai" achieved revenue of 245.58 million yuan in 2025, with a net loss of 47.83 million yuan; in the same period, "Youjia Tianjin" achieved revenue of 34.73 million yuan, with a net loss of 7.28 million yuan; "Yunnan Dashan Beverage" achieved revenue of 203.63 million yuan, with a net loss of 8.68 million yuan. The three companies recorded a total revenue of about 484 million yuan in 2025, and a total net loss of about 63.79 million yuan.
This overall loss situation can, to a certain extent, explain why Tsingtao Brewery Group wants to consolidate all water business assets under Qingdao Beverage Group for integration. Decentralized ownership cannot generate synergistic effects, and the poor operating performance of several companies has dragged down the performance of the entire health segment. In 2025, Qingdao Brewery Youjia Healthy Drinks Co., Ltd. (the equity transferor in this transaction) recorded a net loss of 12.52 million yuan.
In comparison, in 2025, Qingdao Beverage Group (the equity transferee in this transaction) achieved operating revenue of 1.374 billion yuan and a net profit of 81.7661 million yuan, with a larger scale and stronger profitability. After Qingdao Beverage Group became a secondary subsidiary of Tsingtao Brewery Group, its strategic positioning described on the company's official website is: "Fully nurture the second growth curve of Tsingtao Brewery Group, build a nationally leading water and beverage brand, become a national benchmark enterprise in the health drink sector and an industry leader with international influence."
However, after the internal integration, the total annual revenue of Tsingtao Brewery Group's entire water and beverage business is estimated to be less than 2 billion yuan, which is far behind leading brands such as Nongfu Spring, C'estbon and Ganten. The related brands also have low national popularity, so it is quite difficult to develop into a "nationally leading water and beverage brand".
The greater challenge is that the domestic bottled water market has changed. Six years ago, when Tsingtao Brewery Group acquired brands such as "Pure Life", the bottled water market was still thriving. Now, the entire category has fallen into the dilemma of simultaneous declines in both volume and price, and the water war between brands is extremely fierce. In the first half of this year, the bottled water businesses of several listed companies such as Nongfu Spring, China Resources Beverage and Master Kong have all been impacted, and small and medium-sized enterprises will only be more affected in their operations.
Therefore, after the integration, to what extent Qingdao Beverage Group and even the entire Tsingtao Brewery Group can empower the bottled water business represented by "Tsingtao Brewery Pure Life", and whether the latter can gain new growth in the declining market, is full of many uncertainties.
This article is from the WeChat official account "Food Insider", author: The one who never wastes readers' time, published by 36Kr with authorization.