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The maker of LaCroix attributes "unfairness" to the decline in sales and profits of the popular flavored sparkling water. (Brittany Greeson / The Washington Post)
The LaCroix leader took the unusual excuse of apologizing for a bad quarter. Then he blamed unfairly the poor performance of his flavored carbonated water dispenser and compared the company to a disabled person.
Domestic stocks in drinks plunged 16% Friday, a day after CEO Nick Caporella had bizarrely explained the company's first quarterly decline in sales in five years and a 39% drop in sales. its profits. He insisted that neither "negligence, nor mismanagement, nor lamentable acts of God" could be blamed. "This is largely the result of injustice!", He said, apparently evoking the difficulties of "natural" marketing of this drink.
The sparkling water market has exploded in recent years as consumers forgo sodas sweetened. According to Beverage Marketing Corp, seltzer sales have increased 42 percent in the last five years, while Americans spent $ 2.2 billion in sparkling water last year, according to Nielsen data.
Even though LaCroix has experienced tremendous growth in line with the rapid growth of sparkling waters, the brand is facing increasing competition from rivals with deep pockets. Last year, PepsiCo launched its own range of sparkling water called Bubly and spent $ 3.2 billion for the purchase of SodaStream, the maker of do-it-yourself seltz. Coca-Cola made its own acquisition by taking over Mexico's sparkling water company Topo Chico, which has a dedicated customer base in Texas. Soft drink manufacturers are also diversifying and offering a multitude of flavors and variants containing caffeine, alcohol and cannabis.
The Florida-based company said its revenues had dropped by about 3%, to $ 221 million, over the three-month period ended January 26th. Revenues plunged from $ 41 million to $ 25 million.
In October, National Beverage was sued by a lawsuit alleging that LaCroix contained synthetic ingredients and that its "all-natural" claims were false and misleading to consumers. The company denied the allegations.
Caporella's statement following the earnings report was not about the lawsuit, but it continued with a shocking metaphor.
"Managing a brand is not so different from caring for someone who becomes disabled," he wrote. "Brands do not see and hear, so they are at the mercy of their owners or their caregivers who need to preserve dignity and specialness. The brand is an example. "
As reported by Mother Jones last year, Caporella has a habit of tying his business statements with unconventional language. In his 2018 Annual Report, he writes:
"LaCroix – look again. La La, do you feel it, feel it? It makes you cool off by just thinking of the name. . . The cross. This name inspired a cult and created a conscience that leaves to each consumer that special feeling of. . . the joy of LaCroix. "
Last year, it was revealed that some of Caporella's strong public statements about the company had attracted the attention of the Securities and Exchange Commission. The financial regulators had asked National Beverage to clarify the company's remarks in 2017 regarding the "proprietary techniques" used to accelerate the growth of its business. The agency also reminded National Beverage that its public statements must be accurate. The SEC said it has completed its examination of the matter.
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