South Korea's Jeju Island, the source of Orion's first venture into mineral water, is noted for its pristine scenery and conditions. Photo: Asia Times/Andrew Salmon

Orion, South Korea’s leading confectioner, is diving into the surging Chinese mineral water market.

Orion is best known for its iconic Choco Pie chocolate snack, which is hugely popular both domestically and internationally. In the global confectionery space, Orion is in 13th place with net revenues of US$1.37 billion last year, according to an industry ranking produced by Candy Industry, a confectionery industry media.

Now it is plunging into the water business. It plans to launch its first mineral water product, Jeju Yongamsu, this month in South Korea and will then export the product to China in the first half of next year, an Orion official told Asia Times on Monday.

According to Orion, the alkalescent mineral water, produced at a plant on Jeju Island – a tourist destination popular with both Koreans and Chinese off the southern coast of Korea – is naturally filtered through 400,000-year-old basalt, making it rich in minerals such as calcium and magnesium.

In order to hit the ground running, Orion has signed a contract with Chinese coffee chain Luckin Coffee, which operates about 3,000 stores nationwide, to supply it with 530 ML bottles of the mineral water, as well as snack products.

Orion also plans to export the mineral water to Vietnam.

Big money in premium water

“It will be priced at the upper-middle level in the price range of bottled mineral water sold in China as we target the premium mineral water in China,” a company official said of Jeju Yongmasu.

In China, there is money in water. Evian’s 300 ML glass bottled water and VOSS’ 350 ML glass bottled water retail for 20 yuan ($2.85) and 19 yuan, respectively – placing them in the premium price bracket.

By contrast, in South Korea, Jeju Samdasoo – which, with 35%, holds the largest market share among bottled water producers – is priced at a lowly 6 yuan per 500 ML bottle in China.

According to Orion, ASKCI Consulting, a Chinese research firm, found in a research report that demand for mineral water in China is rapidly growing as more and more Chinese consumers  seek healthier drinks. The report said sales of mineral water would increase to 100 billion yuan, or $14.2 billion, in 2020.

Demand for the premium product looks more promising than demand for standard mineral waters.

“The Chinese premium mineral market accounts for 10% of total market volume, but has recently expanded by 46-50% – much faster than the 11-12% growth of common products,” Orion said in a press release.

Global water brands such as Evian, Perrier, San Pellegrino Antipodes and VOSS have made inroads into the Chinese market in recent years, while local companies such as Nongfu Spring have also launched premium products.

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