Battle Of The Bubbles

Lacroix was once the darling of sparkling waters. Today it’s struggling against a crowded market and a raft of lawsuits

- Lauren Etter And Craig Giammona

When the value of Nick Caporella’s company, National Beverage Corp., reached $2 billion in the spring of 2016, its top executives raised a congratulatory toast not with Champagne, but with cans of LaCroix, its marquee brand of flavored sparkling water. That summer, Caporella wrote a press release attributing the recent success to “Genius innovation!” By April 2017, the company was worth $4.1 billion.

It’s been a thrilling ride for LaCroix, which for more than two decades languished in obscurity on the bottom shelf of the water aisle, in the shadows of Perrier’s and S.Pellegrino’s green glass bottles. Around 2013 the brand began rising from the dust that had been collecting on its 12-packs as consumers collectively shunned sugary sodas. Over the next five years, LaCroix’s sales jumped almost eightfold, accelerated by a social media machine that excited young people with its Instagrammable rainbow of cans and zero- additive innocence. “They were really the first large brand to go after millennials that way and target their health and wellness concerns,” says Alexander Esposito, a research analyst at Euromonitor International.

LaCroix is still the king of the sparkling water aisle, but the competition is crowding in. Last year, PepsiCo Inc. released Bubly, a sparkling water backed by a marketing arsenal that LaCroix has struggled to match. In 2017, Coca-Cola Co. paid $220 million for Topo Chico, a Mexican mineral water with a cult following. Meanwhile, a legion of startups has rolled out “craft” sparkling water brands that promote artisanal ingredients, antioxidant boosts, and cannabidiol infusions. LaCroix’s sales for the four weeks ended July 14 fell more than 15% from the prior-year period, even as its main competitor, Bubly, saw sales surge 96%, according to Bloomberg Intelligence.