BIG GUYS PURSUE THE BUBBLES Coca-Cola, PepsiCo and Nestle Take Aim at La Croix By Martín Caballero
34 BEVNET MAGAZINE – SEPTEMBER/OCTOBER 2018
It was only a matter of time. After all, by the time bottled water replaced carbonated soft drinks as U.S. consumers’ favorite drink for the first time in 2016, major beverage corporations like The Coca-Cola Company, PepsiCo, Nestle and others had already prepared themselves for the change, building robust brands and operations that could compete in various ways with value-priced and private label offerings. However, as flavored and unflavored sparkling water has become one of the fastest growing categories on the market, those same companies are in the unusual position of playing catch-up to less heralded rivals. One of those rivals is, of course, National Beverage Company, makers of La Croix, the brand largely credited with sparking America’s obsession with fizzy flavored water. The Florida-based company has continued to go from strength to strength; according to a company earnings report, sales increased approximately 12.6 percent in the past quarter to $292.6 million, while sales over a 52-week period ending on August 12 stand at over $422 million, according to market research group IRI. (Due to a correction, this paragraph has been changed from an earlier version; see editor’s note, below) Based on Nielsen all-channel sales data through August 11, 2018, sales of the company’s flavored sparkling water products are up 37.3 percent from the same period last year, giving it a 22 percent stake in the $2.1 billion category. Other independents, such as Polar Corp. and Talking Rain Beverage Corp., makers of Sparkling Ice, have also seized share of the growing market that saw U.S. retail sales of sparkling water, seltzer and club soda reach $2.7 billion. For now, the sparkling water market may be still be little more than the proverbial drop in the bucket compared to the $16 billion business of bottled water. But with U.S. consumers expected to purchase around 821 billion gallons of sparkling water just this year, the likes of Coca-Cola, PepsiCo, Nestlé and other major beverage manufacturers have all taken significant steps to expand and strengthen their respective positions in this high growth category.