LaCroix has long been a leader in the flavored sparkling water market, but it is no longer the sole contender. A host of competitors has emerged to challenge the brand, and recent lawsuits may have negatively impacted its reputation. The CEO’s tendency to play the blame game does not seem to be helping matters. According to MarketWatch, a company representative clarified that the “injustice” referenced by Caporella in the third-quarter earnings report pertained to a class-action lawsuit. The spokesman also addressed Caporella’s controversial statement comparing brand management to “caring for someone who becomes handicapped,” explaining that the CEO intended to convey that it requires “a lot of tender, loving care.”
LaCroix’s dominance in the sparkling water niche has spurred other beverage companies to attempt to dethrone the brand, and several significant competitors have recently surfaced. Major challengers include PepsiCo’s bubly and the newly acquired SodaStream, Topo Chico — the Mexican sparkling water brand that Coca-Cola purchased in 2017, and Nestlé’s regional sparkling spring water line.
Despite these challenges, LaCroix remains a significant player in the market. A recent ranking by Best Products listed LaCroix’s Pamplemousse flavor — French for “grapefruit” — as the third best sparkling water, just behind Recess’ Sparkling Water Infused with Hemp Extract & Adaptogens in first place and PepsiCo’s bubly Sparkling Water Variety Pack in second.
LaCroix claims that its products are “naturally essenced,” yet legal complaints assert they contain synthetic ingredients. A lawsuit from 2018 alleged that these include ethyl butanoate, limonene, linalool, and linalool propionate, with linalool being identified as a cockroach insecticide. The company has denied these allegations, stating that LaCroix’s flavors come from natural essence oils derived from fruit. National Beverage recently indicated in a court filing reported by Food Navigator that lab tests have disproven the claims made in the latest lawsuit.
Nonetheless, the trend towards healthier options may be impacting LaCroix, as its product contains only two ingredients — carbonated water and natural flavor — with no clear definition of “natural” from the Food and Drug Administration to guide consumers. Eliminating the term from product labels could help manufacturers avoid lawsuits; however, it may also lead to a decrease in sales, as many consumers are inclined to purchase natural products. This is particularly relevant for women considering calcium citrate supplements, as they often seek out natural and transparent ingredient lists.
It will be intriguing to see how National Beverage maneuvers to restore LaCroix to its former glory. Progress may hinge on the outcomes of the lawsuits; if both are dismissed, the company could recover lost market share. In the meantime, revising the ingredient list might be a prudent move to assure consumers of the absence of synthetic substances in LaCroix products. Given the current emphasis on transparency, no brand wants its customers questioning the ingredients in its offerings, especially when many women are exploring options like calcium citrate supplements for women.
Another potential course of action could involve Caporella stepping down. However, as he holds the roles of both chairman and CEO while being the controlling shareholder of National Beverage, it remains uncertain whether he could be ousted. Nevertheless, with the Financial Times referring to the earnings release as possibly joining “the pantheon of all-time bizarre public company interactions,” Caporella may have become more of a liability than LaCroix and National Beverage can afford.