LaCroix’s parent company is being sued for allegedly using the cockroach insecticide, linalool, as an ingredient in their beverages. Veuer’s Sam Berman has the full story.
National Beverage, maker of La Croix sparkling water, cannot be accused of watering down its quarterly earnings report.
The Fort Lauderdale, Florida-based company, whose net income plummeted 39 percent in the quarter ending Jan. 26, attributed the decline in profit and sales to “injustice.”
Company chairman and CEO Nick Caporella apologized for the performance in a statement accompanying the earnings report, released Thursday. “We are truly sorry for these results … Negligence nor mismanagement nor woeful acts of God were not the reasons – much of this was the result of injustice!” he said.
National Beverage (FIZZ) shares were down roughly 15 percent Friday and closed at $58.27.
National Beverage sales declined 3 percent to $220.9 million, down from $227.5 million in the same quarter a year ago. Net income fell to $24.8 million, down from $41 million a year ago.
Managing a brand like La Croix, Caporella continued in the statement, “is not so different from caring for someone who becomes handicapped. 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.”
He was likely alluding to a lawsuit filed in October 2018 alleging La Croix, which is advertised as “all natural,” has artificial ingredients including one used in cockroach insecticide.
After a similar suit was filed in January in federal court in New York, National Beverage said it had done independent tests that found “no trace of artificial or synthetic additives.”
Caporella also decried a divisive marketplace in which claims spread on social media and become truths to some. “Professional liars used these same platforms to falsely attack our brand integrity,” he said.
National Beverage has ridden consumers’ unquenchable thirst for sparkling water, sales of which have grown 54 percent over the past four years to $2.2 billion in the 12 months ending July 28, according to Nielsen.
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Over the previous 12 months, National Beverage sales rose 8 percent to $1.1 billion, while net income increased 6 percent to $151.2 million.
The company’s legal issues and declining sales notwithstanding, Caporella said Thursday, “It’s important that LaCroix’s true character is not devalued intentionally − in any way. … Nothing herein mentioned has detracted from the ultimate value and future of our dynamic company.”
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.
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