LaCroix Bubbles Up in Sparkling Water Brand Competition
Once regional brand outshines rivals with quirky marketing
LaCroix sparkling water sales took off as the once Midwest regional beverage brand revamped its marketing and broadened distribution. Above, a display at a Brooklyn Whole Foods Market earlier this month. PHOTO: ANDREW LAMBERSON FOR THE WALL STREET JOURNAL
Aimee Buckert says she felt ripped off as a child when her parents stocked the fridge with LaCroix sparkling water instead of soda. But the 36-year-old saleswoman has changed her mind about the lightly flavored beverage.
“Pop right now is a big no-no, and diet pop is an even bigger no-no,’’ says the Plainfield, Ill., resident, who now drinks two to three cans of LaCroix daily. Like many consumers, she doesn’t want the calories of regular soda or the artificial sweeteners of diet drinks.
While U.S. sparkling-water consumption remains one-tenth of bottled water, it grew 26% last year, according to researcher Beverage Marketing Corp. The fastest-growing unsweetened brand is LaCroix, whose sales have more than doubled in the last two years to $225.5 million, second to Nestlé SA’s $339.4 million in U.S. Perrier-brand sales, according to market researcher Euromonitor International Ltd.LaCroix, a once-sleepyNational Beverage Corp.regional brand, is afire with consumers nationwide because of what it doesn’t contain: calories, sweeteners, sodium or anything artificial. Its ingredients are just carbonated water and natural flavor.
The 35-year-old drink has succeeded with quirky marketing tactics. Unlike Coke and Pepsi, it avoids television advertising. It relies instead on brightly colored packaging, and social media where 20 flavors ranging from apricot to cran-raspberry have sparked passionate online debates and store treasure hunts.
An online Shed the Sugar Sweepstakes promotion gave LaCroix drinkers Tory Burch LLC tote bags in 2013. A year later, the brand began a 40 Can Challenge campaign that seized on consumers’ growing health concerns by encouraging them to swap a can of diet or sugary soda for LaCroix for 40 days and then share photos and stories online.
Most LaCroix drinkers are women—as is the case with diet sodas—but men are discovering the brand, too. Orlando, Fla., resident and former Diet Pepsi drinker Kevin Glennon dedicates much of his fridge space to LaCroix, which he calls “soda’’ for water drinkers.
“There’s no guilt for a guy like me. I can pound five or six of these a night,’’ said the 37-year-old TV ad agency employee, an avid weightlifter and runner.
MORE THAN JUST LACROIX
In addition to LaCroix, National Beverage owns other drink brands, including:
- Soft drinks Shasta and Faygo
- Rip It energy drink
- Everfresh juice drink
La Crosse, Wis.-based G. Heileman Brewing Co. launched LaCroix around 1981, naming it after the city and nearby St. Croix River. National Beverage of Fort Lauderdale, Fla., bought it from beverage company Winterbrook Corp. in 1996, and initially it remained a Midwestern regional brand.
But about five years ago National Beverage relaunched LaCroix with neon-colored packaging, targeting Perrier drinkers with a cheaper-priced alternative and broadened distribution.
Competition is heating up. Nestlé, which leads the market with its Perrier and San Pellegrino drinks, is expanding flavors. PepsiCo Inc.this month is launching a low-calorie, carbonated version of its Aquafina water with black cherry dragonfruit, lemon lime and orange grapefruit. Last month Coca-Cola Co. rolled out fizzy, low-calorie Minute Maid juice drinks.
LaCroix is growing faster than rivals partly because Nestlé’s brands cost more and Coke and PepsiCo didn’t focus on sparkling water. National Beverage has a leg up on regional companies like Polar Beverages because it owns 12 production plants. As sparkling-water sales took off, retailers including Target Corp., Publix Super Markets Inc. and Whole Foods Market Inc. quickly gave LaCroix shelves and floor displays.
‘Some say it tastes like a day at the beach and other people say it tastes like sunscreen’
Several LaCroix executives have left in recent months, threatening the brand’s momentum. Speculation also has swirled for years that Chief Executive Nick Caporella, who is 80 years old and owns more than 70% of National Beverage, could sell the company.
Mr. Caporella and National Beverage declined to comment for this article. The Nasdaq-listed company has a $2 billion stock-market capitalization. Its shares hit a new 52-week high earlier this month. Last month, it reported revenue rose 9.3% to $525.8 million and profit grew 18% to $43.7 million for the nine months ended Jan. 31.
Meanwhile, LaCroix keeps recruiting fans. Mark Christian says he and co-workers at San Francisco-based messaging app company Slack Technologies Inc. became obsessed with LaCroix after their employer began stocking it in the office fridge last summer. It has since taken over nearly half the shelves, and the coconut flavor has fueled debate in an internal chat room.
“Some say it tastes like a day at the beach and other people say it tastes like sunscreen,’’ says the 33-year-old software engineer and lapsed Coke Zero drinker, adding he gives fellow coconut fans a “secret nod’’ when passing in the hallway.
