Market Overview

Millennial Research Firm Says Young Consumers Still Love LaCroix

Millennial Research Firm Says Young Consumers Still Love LaCroix

National Beverage Corp. (NASDAQ: FIZZ)'s flagship beverage LaCroix has been the front runner in the rapidly growing flavored sparkling water category, but increased competition is slowing down its growth — and negative headlines are dragging the stock.

The Competition

LaCroix has seen its fair share of competition from the major players in the beverage industry as they diversify their portfolios, soft drinks decline — and millennials take to LaCroix.

In 2017, The Coca-Cola (NYSE: KO) purchased Texas favorite sparkling mineral water Topo Chico for $220 million. PepsiCo, Inc. (NASDAQ: PEP) also dipped its toe in sparkling water with Bubly, which has become a key competitor to LaCroix.

Prior to its Super Bowl ad in 2019, the brand awareness of Bubly was low, but it became one of the most successful advertisements during the game and created considerable awareness.

'Death Knell Headlines Are Inaccurate'

The affinity for LaCroix is flattening as the awareness and affinity for Bubly increase, Maryleigh Bliss, the vice president of content at millennial research firm Ypulse, told Benzinga.

While LaCroix is indeed facing increased competition, the negative headlines are blown out of proportion, according to Ypulse's research.

Although LaCroix has seen a recent dip in brand affinity among young consumers, it’s actually been on an upward trajectory overall in the last few months and is at a higher point than it was at the start of the year, the firm said.

“It makes sense that in this new environment, with multiple direct competitors being launched in the last two years, sales for LaCroix would take a hit. But declarations that young consumers are done with the brand don’t hold up," Bliss said.

It's millennial affinity for LaCroix that was was responsible for the brand's spike in 2016, making the product appear almost entirely new despite the drink being released 30 years prior.

National Beverage saw its profits grow from $49.3 million to $107 million between 2015 and 2017.

The brand has near-cultlike appeal, but Ypulse said brand loyalty in this category is fickle.

“LaCroix is facing more sparkling water competition than ever before, so naturally their sales are seeing a slowdown. They are no longer the new, innovative brand in the space — but the death knell headlines are inaccurate,” Bliss said.

Related Links:

National Beverage Shares Fall Amid LaCroix Suit Involving Toxic Chemical Use

National Beverage Maintains Its Fizz...For Now

Photo courtesy of LaCroix.


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