CEO blames ‘injustice’ after LaCroix maker’s profit drops
Published 12:00 am Saturday, March 9, 2019
- LaCroix brand sparking water in New York on Feb. 6, 2018. National Beverage Corp. shares fell as much as 26 percent after Nick Caporella made what turned out to be a veiled reference to a lawsuit and appeared to compare his company to a handicapped person. (Jens Mortensen/The New York Times)
The latest news release from the maker of LaCroix sparkling water was quirkier than usual, which is notable for a company whose public statements routinely feature exclamation marks, florid adjectives and colorful fonts.
On Thursday, the company, National Beverage Corp., said its third-quarter sales had dropped and its profit had plunged almost 40 percent, to $24.8 million.
Weak corporate results typically come wrapped in statements filled with boilerplate jargon attributed to executives who cite “market headwinds” or “competitive forces.”
Nick Caporella, National Beverage’s chief executive, blamed “injustice” for the company’s poor performance.
In a news release, Caporella said National Beverage was “truly sorry for these results” and that “negligence nor mismanagement nor woeful acts of God were not the reasons.”
“Much of this was the result of injustice!” he added, without any explanation.
A company spokesperson, Rod Liddle, sought to clarify the comments Friday. He said Caporella was referring to a lawsuit filed against the company in October in Illinois, on behalf of a customer. The suit claims LaCroix, which National Beverage markets as “all natural,” has artificial ingredients, including one used by exterminators.
“Without any valid test results, somebody makes a complaint and says a brand has ingredients like cockroach insecticide — that’s injustice,” Liddle said. “You’re guilty without being proven so, without due process.”
After the suit was filed, the company issued several responses.
In one statement, Caporella said: “There is an unspoken phrase within a cult — ‘We got each other’s back!’ Well, there has been a loud cry of support from our LaCroix consumers embracing the brand that they love — Don’t hurt our LaCroix!”
Elsewhere in the news release issued Thursday, which carried the title, “WE JUST LOVE OUR LACROIX” CONSUMERS CHANT, Caporella described the difficulty of running a company.
“Managing a brand is not so different from caring for someone who becomes handicapped,” he said. “Brands do not see or hear, so they are at the mercy of their owners or care providers who must preserve the dignity and special character that the brand exemplifies.”
National Beverage stock, which trades under the ticker FIZZ, was down more than 14 percent in trading Friday.
The company, which has enjoyed a surge of popularity in flavored seltzer recently, has faced new competition from products sold by PepsiCo and Coca-Cola.
Laurent Grandet, an analyst at Guggenheim Securities, said in a note to clients Friday that the weak sales, combined with data suggesting consumers were not discussing LaCroix on social media to the degree they once did, suggested there was “little hope that the brand can recover.”
“Many consumers who were drinking LaCroix have since discovered that other brands offer acceptable substitutes and that the brand doesn’t have much that distinguishes it from the competition,” he wrote.
Grandet added that Caporella, who owns nearly 73 percent of National Beverage, might be willing to sell the company or the LaCroix brand to a buyer like Keurig Dr Pepper.
As for the brand’s idiosyncratic news releases, Liddle said each one was reviewed by a group of employees and lawyers before being issued.