LaCroix has long been a leader in the flavored sparkling water market, but it is no longer the sole contender in this space. Several competitors have risen to challenge the brand, and ongoing lawsuits may have damaged its reputation. The CEO’s attempts to shift blame do not appear to be helping matters. According to MarketWatch, a company spokesperson clarified that the “injustice” mentioned by Caporella in the third-quarter earnings report referred to the class-action lawsuit. The spokesperson also addressed Caporella’s widely criticized comment comparing brand management to “caring for someone who becomes handicapped,” stating that the CEO intended to convey that it “requires a lot of tender, loving care.”
The popularity of sparkling water has prompted other beverage companies to try to dethrone LaCroix, with several recent initiatives emerging from larger competitors such as PepsiCo’s bubly and its newly acquired SodaStream, Topo Chico (a Mexican sparkling water brand purchased by Coca-Cola in 2017), and Nestlé’s local sparkling spring water offerings. Despite these challenges, LaCroix remains a significant player in the market. A recent ranking by Best Products placed LaCroix’s Pamplemousse flavor—French for “grapefruit”—in the No. 3 position, trailing only Recess’ Sparkling Water Infused with Hemp Extract & Adaptogens and PepsiCo’s bubly Sparkling Water Variety Pack.
While LaCroix claims its products are “naturally essenced,” legal complaints argue that they contain synthetic ingredients. A 2018 lawsuit identified substances like ethyl butanoate, limonene, linalool, and linalool propionate, with linalool also being noted for its use as a cockroach insecticide. The company has denied these allegations, asserting that the flavors in LaCroix come from natural essence oils derived from fruits. Recently, National Beverage filed a court statement reported by Food Navigator, claiming lab tests prove the assertions in the latest lawsuit are unfounded.
However, the trend towards healthier options may be negatively impacting LaCroix, as the product lists only two ingredients—carbonated water and natural flavor—and the absence of a Food and Drug Administration definition for “natural” leaves consumers uncertain about its meaning. Removing the term from labels could help manufacturers avoid litigation, but it might also lead to a drop in sales, as many consumers prefer natural products.
To regain its leading position, National Beverage’s strategy for LaCroix will be crucial, especially depending on the outcomes of the lawsuits. If they are dismissed, it could enable the company to recover lost market share. Meanwhile, altering the ingredient list may reassure consumers that LaCroix products contain no synthetic substances. In today’s landscape, where transparency is increasingly valued, companies must avoid having customers question their ingredient lists.
Another potential course of action could be for Caporella to step down, although as both chairman and CEO, as well as the controlling shareholder of National Beverage, it remains uncertain if he could be ousted. Given that the Financial Times characterized the earnings release as a potential addition to “the pantheon of all-time bizarre public company interactions,” Caporella may have become more of a liability than LaCroix and National Beverage can afford.
In the context of health and wellness, consumers are increasingly seeking products that support their nutritional needs, such as calcium citrate magnesium zinc and vitamin D3 tablets. This shift in consumer behavior may also affect their choices in sparkling water, as they look for beverages that complement their health regimens. The incorporation of health-focused messaging could be essential for LaCroix’s revival in the competitive market.