LaCroix’s era as the coolest seltzer in America is over

LaCroix sales are “effectively in free fall,” Guggenheim Partners beverage industry analyst Laurent Grandet wrote in a report released Thursday.

The seltzer brand’s sales reportedly dropped 15 percent in May after falling 7 percent in April, 5 percent in March, and 6 percent in February. The stock price for La Croix’s parent company National Beverage dropped 10 percent this week, and has fallen 62 percent since September of last year.

Grandet’s analysis of the situation is dramatic, noting that the “LaCroix brand has gone from bad to worse to disastrous in a relatively short period of time.”

But it’s hardly a mystery why: There are seemingly limitless options for seltzer now, and most of them aren’t from companies battling scandal after scandal.

The LaCroix brand is more than 30 years old, and has long held on to moderate popularity in the Midwest. Around 2015, as reported by Vox’s Libby Nelson and Javier Zarracina, its retro aesthetic and funny branding won it a whole new audience:

Long before the girls wearing “LaCroixs Over Boys” T-shirts this summer were even born, LaCroix was beloved by health-conscious, budget-wise women in middle America. They knew a good thing when they found it, and they were a loyal audience. But most trends trickle inward from the coasts to the Midwest, not the other way around, and so LaCroix’s first 30 years were spent under the radar.

Then sometime in 2015, LaCroix — lightly flavored, sugar-free carbonated water wrapped in a garish can — became an unlikely breakout hit. The New York Times published an essay raving about it. The Awl and Time Out New York ranked its flavors. If you say “LaCroix” to a youngish urban professional, be ready for a possible explosion of enthusiasm, as if you’d shaken up a can of carbonated water.

Of course, LaCroix’s success led to competition. Everyone wanted a bit of the seltzer market — or a “share of throat,” as is the term in the beverage industry, which I wish I did not know.

In 2017, Coca-Cola bought the similarly trendy Mexican sparkling water brand Topo Chico (long super popular in the American South, particularly among urban young people). Pepsi launched its own Bubly brand of sparkling water, and the more flavorful Spindrift won favor among the same demographics that had made LaCroix a fad. Seltzer is evolving — you can buy it infused with alcohol or CBD. Millennials who winkingly embraced the normcore aesthetic of LaCroix have moved on (or back) to classic Polar.

LaCroix is not evolving, Guggenheim’s analyst argues, and in fact is quite poorly run. For one, it is currently the subject of a class-action lawsuit. While LaCroix markets itself as “all natural,” the complainants argue that it contains artificial ingredients, “including linalool, which is used in cockroach insecticide.” (Linalool, while not necessarily natural, is found in 63 different spices and used commonly in food and beverages, according to the National Institutes of Health.) The company’s official response to this lawsuit included tweet storms asking its customers to come to its aid.

“We are proud to serve LaCroix to our families, in our hospitals, and in our schools,” the official @lacroixwater account tweeted. “Please stand with us as we defend our beloved LaCroix.”

This was shortly after National Beverage’s 83-year-old billionaire CEO Nick Caporella was accused of sexual misconduct by two pilots who had worked on the company plane. Both said that he had touched them inappropriately on dozens of flights. LaCroix’s response to this legal issue was strange as well: A company press release with the word “NEWS” written at the top with the American flag overlaid, which called the pilots’ stories “defamation” with no corroborating information other than a quote from a board member who stated, “I have known Nick for over 40 years and I find these allegations to be incredulous.”

This March, when National Beverage released a dismal third-quarter earnings report for 2018, it did so with this widely commented-upon explanation:

“We are truly sorry for these results stated above. Negligence nor mismanagement nor woeful acts of God were not the reasons — much of this was the result of injustice! ... Managing a brand is not so different from caring for someone who becomes handicapped.”

(Reached for comment at the time, a spokesperson told Vox, “What he was saying is that the loving care one provides someone with special needs is what he does every day with the company.”) All of this is on top of Caporella’s political rants, which are typically nearly impossible to parse, but sometimes involve elaborate metaphors about the many failures of Barack Obama.

Though LaCroix has long referred to its customers as “our cult,” it doesn’t seem to have as much customer loyalty as it once believed.

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