Just four years ago, not many outside of the Midwest United States knew LaCroix, a naturally-flavored sparkling water brand. Then, in 2015, a reinvigorated version of the brand came out, and sales skyrocketed. By 2018, its sales had nearly tripled, and CNN called LaCroix “the ‘it’ brand for millennials.” However, now, just a year later, sales are dwindling. In fact, they’re downright horrible…
Humble Beginnings
For many, LaCroix is a relatively recent phenomenon; so, it might surprise you to learn that the brand started back in 1981. The G. Heileman Brewing Company of La Crosse, Wisconsin created LaCroix as an “anti-Perrier” drink. They wanted to create sparkling water that tasted great but featured none of Perrier’s “snobbish positioning.”
Over the years, the company made small moves, especially in the Midwest. By 1992, LaCroix was worth an estimated $25 million. Unfortunately, despite LaCroix’s success, other failures at Heileman forced the company to sell the brand to National Beverage Corporation the same year. National Beverage knew they had a hit on their hands. However, they had no idea they would begin growing exponentially in the next decade.
Hitting It Big
LaCroix had its first major revolution in 2002 when National Beverage decided to change the design of the LaCroix bottles and cans. The original design (above, left) featured simple text and little design. On the other hand, the modern logo (above, right) is rather colorful and busy. In fact, the current logo was “least favored by management!” Still, it won over test consumers in a “landslide” and worked on the public. Sales rose through the roof. Moreover, between 2002 and 2015, National Beverage’s stock price grew from $5.10 to $22.79, a nearly 350% increase!
In 2015, LaCroix’s next big move came because of one key event: a report came out stating that American’s drank less soda than ever, with soda sales hitting a 30-year low. National Beverage saw an opportunity to market specifically to millennials. They began contrasting the brand with soda and highlighting their “all-natural” ingredients, something more and more consumers care about. Once again, sales took off.
Over the next years, sales topping $646 million in 2016 and $827 million in 2017. Meanwhile, so did National Beverages stock price. The stock price peaked at $122.54 in 2017, with another peak at $116.93 in 2018. Soon, Target and other retailers began selling shirts with slogans like “LaCroix Over Boys,” on them. A symbol of millennials, the brand continued to grow.
Floundering Failure
Last year, it seemed LaCroix could do no wrong. However, since January, the brand has started suffering, significantly. Sales of LaCroix have plummeted a staggering 33% since the start of the year. Of course, National Beverage stock prices have reflected dropping from their high of $116.93 last year to a depressing $44.59 today. “The LaCroix brand has gone from bad, to worse, to disastrous in a relatively short period of time,” said Laurent Grandet, a food and beverage analyst for Guggenheim Partners, one of the largest investment firms in the world.
So, what’s happening with the millennial “it” brand? Well, in short, competition is catching up. In 2017, Coca-Cola snatched up Mexican sparkling water brand Topo Chico, significantly expanding its presence in the United States. Meanwhile, in 2018, Pepsi also launched a sparkling water label, Bubly, and Costo launched another under their Kirkland brand. On the other hand, “LaCroix doesn’t have much that distinguishes it from the competition in terms of intellectual property or added value,” said Grandet.
So, unless National Beverage does something drastic, like significantly lowering its prices to compete with big chains, it looks as though LaCroix might leave as quickly as it came.