This is an English adaptation of a FoodBud historical article originally published on September 18, 2021.
Bingfeng Beverage, a 73-year-old soda brand rooted in Xi'an, had submitted a prospectus to the Shenzhen Stock Exchange and formally started its IPO process. According to the prospectus, Bingfeng planned to issue no more than 60 million shares and raise RMB 669 million: RMB 199 million for expanding and upgrading glass-bottle production lines, RMB 430 million for marketing-service network upgrades and brand building, and RMB 40 million for an information-management platform.
For operators, the filing highlights a familiar question for heritage beverage brands: can deep local affinity convert into scalable, multi-region foodservice and retail distribution?
Bingfeng traces its origin to 1948, when a merchant brought soda-making equipment from Tianjin toward Xinjiang but was blocked by heavy snow and stayed in Xi'an. In 1951, the Northwest Soda Factory was built and later merged into Xi'an Food Factory. The Bingfeng name came from another snowy episode: a well pulley used to draw water for soda production froze, with snow and ice piling up like small peaks.
In the 1960s and 1970s, many Chinese cities had local soda brands that became city calling cards. In the late 1970s, Coca-Cola and Pepsi entered China and expanded aggressively with stronger marketing and capital resources. By the 1990s, many domestic old soda brands were discontinued after joint ventures, shut down under competitive pressure, or survived only at much smaller scale.
As China's economy strengthened, several legacy soda brands returned: Bawangsi Soda in 2003, Laoshan Cola in 2004, Arctic Ocean Soda in 2011, Shanhaiguan Soda in 2014, and Tianfu Cola in January 2016.
The source article describes carbonated soft drinks as a long-cycle category because of their cooling and thirst-quenching role, even though their share within the broader beverage market has declined. China beverage sales rose from 169.205 million tons in 2015 to 171.646 million tons in 2019.
Under Chinese national standards, carbonated beverages are classified as juice-type, fruit-flavored, cola-type, and other carbonated drinks. After years of competition, China's carbonated beverage market had become an oligopoly led by Coca-Cola and Pepsi, with domestic brands such as Arctic Ocean, Jianlibao, and Bingfeng playing supporting roles. Coca-Cola and Pepsi were said to hold 80% of China's carbonated beverage market.
Bingfeng's reporting-period product categories included carbonated beverages, plant-based beverages, flavored beverages, and tea drinks. Key products included Bingfeng glass-bottle orange soda, canned orange soda, glass-bottle suanmeitang, and canned suanmeitang.
The article also framed traditional herbal beverages as a growth opportunity in China, citing Chinese medicine culture, health positioning, and the possibility that major plant-based beverage brands could eventually expand globally. Suanmeitang, a sour plum drink, was described as still in a growth phase with fragmented competition and no dominant oligopoly. Named competitors included Master Kong suanmeitang, Wanglaoji, Xinyuanzhai, and Jiulongzhai.
Major referenced beverage players included:
According to the prospectus, Bingfeng Beverage generated revenue of about RMB 286 million, RMB 302 million, and RMB 333 million in 2018, 2019, and 2020, respectively. Net profit was about RMB 69.6909 million, RMB 77.6708 million, and RMB 65.2515 million. Revenue rose year by year, while 2020 net profit fell 16% year on year.
As of the end of 2020, canned orange soda and glass-bottle orange soda accounted for 53.42% and 27.67% of main-business revenue, respectively. Together, orange soda represented 81.09% of revenue. The second-largest category, suanmeitang, accounted for only 10.42%; glass-bottle suanmeitang was launched later and contributed just 3.72%.
The prospectus showed that the ex-factory price of a 24-bottle case of glass-bottle soda increased from RMB 17 in 2018 to RMB 19 in 2020.
Bingfeng's regional concentration was clear. During the reporting period, Shaanxi contributed 87.44%, 81.73%, and 80.23% of sales revenue, creating a regional concentration risk and constraining national expansion.
The company used a payment-before-delivery model. Because beverage customers were often small private businesses or individuals with limited capital, cash payment or payment by family members and other third parties sometimes occurred. Third-party collections were RMB 43.74 million, RMB 47.28 million, and RMB 45.23 million during the reporting period, equal to 15.28%, 15.65%, and 13.60% of main-business revenue.
Bingfeng sold through both distributors and direct channels. In the distributor model, Bingfeng sold to distributors, who then sold to retail outlets, which sold to consumers. In direct sales, the company used national restaurant chains and special channels, e-commerce platforms, and small direct transactions.
Distribution remained the core model, while direct sales were small. Direct sales contributed about 3% of main-business revenue. The top ten direct customers generated RMB 4.4566 million, RMB 3.1374 million, and RMB 3.5913 million, equal to 1.56%, 1.04%, and 1.09% of main-business revenue.
The company had formed six regional marketing centers: Xi'an, Northwest, North, Southwest, East China, and South China. It also had business units for national chain-restaurant special channels and online sales platforms. The Xi'an marketing center also handled headquarters sales-management responsibilities, including regional coordination, contract signing, market management, performance, and order processes.
Distributor count increased 22.91% in 2019 and 11.54% in 2020, while average distributor sales fell only 15.54% and 4.17%. The article attributed the lower average partly to rapid onboarding of new distributors, whose performance would require time to mature.
Under the distributor model, Bingfeng signed distribution contracts and mostly used payment-before-delivery settlement. Distributors paid and placed orders, after which the company reviewed them and issued sales orders for self-pickup or outsourced delivery. Glass-bottle products were mainly self-pickup, with distributors paying freight; canned products were delivered by the company, which bore freight costs.
Bingfeng selected distributors based on strength, local market familiarity, and long-term cooperation potential. It could cancel agency rights if a distributor failed to meet minimum sales targets or materially breached contract obligations.
For territory control, Bingfeng signed exclusive regional agency contracts and committed not to grant third parties distribution rights for specific brands in those territories. Distributors agreed not to sell outside authorized regions. The company monitored channel conflict and could issue warnings, suspend supply, or cancel agency rights for cross-regional selling.
Distributor support included advertising, operational coaching, and sales incentives. Advertising covered major satellite TV, magazines, internet, outdoor media, and naming sponsorships. Advertising expense was RMB 5.666 million in 2020. Coaching covered store setup, merchandising, promotions, customer understanding, product display, inventory checks, pricing discipline, and controls against cross-selling, dumping, and price cutting. Incentives included rebates, bundled sales gifts, and display rewards.
Beverage consumption was seasonal. Bingfeng's peak season was May to September, during hot summer and autumn months; the off-season was December to February. Early or late shifts in seasonal temperatures could materially affect quarterly results.
During the reporting period, the main products were Bingfeng glass-bottle orange soda, canned orange soda, glass-bottle suanmeitang, and canned suanmeitang. Canned drinks were produced by outsourced manufacturers, where market capacity was sufficient. Glass-bottle drinks were self-produced and faced capacity constraints.
Because beverages are best produced, sold, and consumed quickly, Bingfeng avoided producing in the low season and stockpiling for the high season. During the reporting period, the company had two production lines with hourly capacities of 24,000 bottles and 18,000 bottles. In the 2020 peak season from May to September, utilization reached 101.26%, after excluding maintenance time and operating 24 hours per day. Equipment and workers were under high load, and supply shortages often occurred in peak season.
On raw-material costs, can bodies and can lids together accounted for the largest share at 29.47%. White sugar, concentrated juice, and water together accounted for 25.05%, meaning the product-content cost was lower than packaging cost.
During the reporting period, Bingfeng developed several new products. Flavored beverage sales grew quickly, while Fucha tea drinks were still in a development phase. The company said it would further enrich its product line.
R&D spending was RMB 9.30 million in 2018, RMB 9.60 million in 2019, and RMB 10.00 million in 2020. Although spending increased, growth was slow and the R&D ratio declined from 3.25% to 3.18% and then 3.03% of revenue.
The company's R&D work covered raw and auxiliary material selection, experimental equipment, team capability, formula development, process development, flavor stability, quality stability, and food safety. It emphasized qualified suppliers with required documentation, comparison across multiple suppliers, and lab verification before selecting materials.
For operators and beverage buyers, the key takeaway is that Bingfeng had strong local brand equity and peak-season demand, but its revenue base was still highly concentrated in Shaanxi, product mix was heavily dependent on orange soda, and glass-bottle capacity was already stretched before broader expansion.
Note: IPO, fundraising, market-share, financial, capacity-utilization, and forward-looking figures above are historical figures from the 2021 source article.