It’s that time of year. The temperature is rising, parties may or may not be happening, and thirsts are looking to be quenched.
Thankfully, there are no shortage of options.
What was once a niche category in the beverage market, is now commonplace with iconic brands like LaCroix and a massive takeover in the alcohol industry. An August 2018 report from PitchBook said that over $150 million in venture capital had already been invested that year alone (which was more than 2016 and 2017 combined).
National Beverage Corp. (FIZZ) had been increasing in value sharply prior to mid 2019 when its LaCroix brand experienced declining sales due to a bevy of new competitors. Vox declared its era as “the coolest seltzer” was over.
Even amid turbulent times, LaCroix is still the dominant brand in the market. Beverage Industry reported sales of $429 million for the 52 weeks ending August 11, 2019:
LaCroix was originally launched in 1981 by G. Heileman Brewing Company (who is based in La Crosse, Wisconsin) as a way to diversify their portfolio of alcoholic beverages and create a less pretentious alternative to Perrier.
It was later sold to WinterBrook Beverage Corp. (which became a subsidiary of National Beverage) in 1992.
The drink got its distinctive design through a surprising research project in which its target market overwhelming preferred the brand that is present today.
(The image left was National Beverage’s second option.)
Other well-known naturally-flavored brands include Polar, Perrier, Pepsi-owned bubly (which posted double-digit sales growth for Q2 on Monday), and Coca-Cola-owned AHA, which was recently launched in March 2020.
Another big player in the sparkling water market is store-owned value brands. Everyone from Whole Foods to Costco sell their spin on seltzer. Together, Beverage Industry says they accounted for over half-a-billion dollars in sales in the 52 weeks ending August 11.
My personal favorite is Trader Joe’s lime flavor.
As drink conglomerates try to snatch a piece of the growing market, plenty of startups have risen to challenge them. Austin, TX-based Waterloo was started to offer consumers more flavor. CEO Jason Shiver told FoodNavigator-USA “We’ve yet to walk away from from one of those taste tests and have someone tell us that they preferred the other brand.” The company raised $4 million in an October 2018 round led by CAVU Venture Partners and was carried in about 9,000 stores as of last year at this time.
Sanzo offers a unique take; although its ingredients are not simply carbonated water and natural flavors, the drinks incorporates fruit purée to create Asian-inspired formulas. Launched in July 2019, Sanzo is available in some retail outlets like Momofuku and will be available in 50 Whole Foods stores starting later this month.
The sparkling water market is here to stay, and it’s heating up. PepsiCo and Coca-Cola have huge advantages with their distribution network, but young companies like Sanzo and Waterloo offering fresh takes have an opportunity to cater to consumers wanting something different.