LaCroix has long been a leader in the flavored sparkling water market, but it is no longer the sole contender. A number of rivals have emerged to take on the brand. Recent lawsuits may have damaged its reputation, and the CEO’s tendency to shift blame does not appear to be beneficial. According to MarketWatch, a company representative clarified that the “injustice” referred to by Caporella in the third-quarter earnings report was related to the class-action lawsuit. The spokesperson also addressed Caporella’s criticized analogy comparing brand management to “caring for someone who becomes handicapped,” explaining that the CEO meant it requires “a lot of tender, loving care.”
Being a leader in a popular niche like sparkling water encourages other beverage companies to attempt to dethrone a top product, and there have been several such efforts recently. Major competitors challenging LaCroix include PepsiCo’s bubly and its recently acquired SodaStream; Topo Chico, the Mexican sparkling water brand purchased by Coca-Cola in 2017; and Nestlé’s regional sparkling spring water line.
Despite these challenges, LaCroix remains a significant player in the market. A recent ranking of sparkling water brands 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 at No. 1 and PepsiCo’s bubly Sparkling Water Variety Pack in second place.
LaCroix claims its products are “naturally essenced,” but legal complaints allege they contain synthetic ingredients, including ethyl butanoate, limonene, linalool, and linalool propionate, with linalool being used as a cockroach insecticide. The company has denied these allegations, asserting that LaCroix flavors come from natural essence oils derived from fruit. National Beverage recently stated in a court filing reported by Food Navigator that lab tests prove the claims made in the latest lawsuit are false.
Nevertheless, the growing trend for healthier products may be impacting LaCroix, as the beverage only lists two ingredients—carbonated water and natural flavor—and there is no FDA definition of “natural” to help consumers understand what it entails. Removing the term from product labels may help manufacturers avoid lawsuits, but it could also lead to a decline in sales, as many consumers seek out natural products.
It will be intriguing to see how National Beverage plans to elevate LaCroix back to its former standing, as the outcome of the lawsuits could play a significant role. If both lawsuits are dismissed, it may allow the company to recover lost market share. In the meantime, modifying the ingredient list could be a wise strategy to reassure consumers that there are no synthetic substances in LaCroix products. Given the current trend toward greater transparency, no company wants customers questioning the ingredients in its beverages, especially when considering elements like calcium and citrate, which are often sought after by health-conscious consumers.
Another potential step could involve Caporella retiring. However, as he serves as both chairman and CEO and is the controlling shareholder of National Beverage, it is uncertain if he could be compelled to step down. Yet, with the Financial Times describing 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. Ultimately, how the situation unfolds may determine whether LaCroix can effectively navigate the competitive landscape while ensuring that its commitments to natural ingredients, including calcium and citrate, align with consumer expectations.