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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ LaCroix is ​​facing a disastrous & # 39; free fall & # 39; in connection with sales drop: analyst

LaCroix is ​​facing a disastrous & # 39; free fall & # 39; in connection with sales drop: analyst



LaCroix is ​​"effective in a free fall" as a result of declining sales and increasing competition, according to a new research note from Guggenheim Securities.

"The LaCroix brand has gone from bad to worse, to catastrophic for a relatively short period of time after negative media attention regarding the" natural "claim of the brand's flavoring ingredients that discovered in October last year," analyst Laurent Grandet wrote.

A lawsuit last year claimed that LaCroix contains artificial ingredients, which is contrary to its "completely natural" marketing requirements. LaCroix has denied the claims in the suit. Read more: "Let's join us": LaCroix slams & # 39; misleading & # 39; Prosecution Associating Sparkling Water with Insecticides

After the trial, the sale of seltzer ̵

1; which had previously had many years of explosive growth – suddenly fell from a rock, according to Nielsen data cited by the Grand.

Over the past 12 weeks, LaCroix sales have dropped 9.4%, according to Nielsen's data. The data also suggests that LaCroix loses customers to other sparkling watermarks, with market share falling to 23% from 28% in October.

LaCroix is ​​"unlikely to recover" as some customers have discovered that "LaCroix does not have much to distinguish it from the competition in intellectual property or added value," the Grand wrote.

LaCroix's parent company, National Beverage Corp., did not respond promptly to a comment request.

In March, the company reported that profits fell almost 40% to $ 24.8 million in the last quarter, and revenue fell 2.9% to $ 220.9 million.

Read more: CEO of LaCroix maker is due to "injustice" to deepen sales and promises that customers will remain loyal to the "LaLa feeling", the drink gives

. Although the trial apparently kicked off the LaCroix downturn, there are several other factors that hinder its recovery, the Grand wrote.

"While we think it is true that this event is likely to catalyze the deceleration of the brand, we also believe that it is only part of the story – and ultimately not the reason why the brand has not been able to recover, "wrote the Grand.

LaCroix is ​​facing increasing competition from PepsiCo, Nestle and Coca-Cola, as well as from private label seltzers, who tend to have an edge over LaCroix on pricing, he said.

Other barriers to LaCroix's recovery include "the lack of meaningful innovation to compensate for nuclear issues and bring new consumer news and inexperience to managing a fast-growing brand worse through ongoing public messaging and crisis resolution failures."

He continued: "As a result, we believe that LaCroix is ​​not likely to recover to a meaningful degree while in the hands of National Beverage (or in the absence of a strong distribution partner)."


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