Insights

Will LaCroix Be “Crushed” by Amazon?

LACROIX

Over the weekend, Quartz published an article titled “Amazon is getting ready to crush LaCroix.” The article outlines how a line of sparkling water sold by 365 Everyday Value, the Whole Foods private label brand, is taking a shot at leading seltzer water brand LaCroix. Quartz explains that shoppers can get a $3.99, buy-one-get-one-free deal of 365 sparkling water in exchange for downloading the Whole Foods app and using their Amazon Prime account. By comparison, a 12-pack LaCroix will cost you $5.99 at a Whole Foods in San Francisco.

So, will LaCroix be “crushed” by Amazon? Don’t count on it.

Private labels are a big deal

There’s no denying that private labels are shaking up the world of commerce, particularly because of Amazon. The retail giant owns dozens of white label brands, and as a result, has already begun to disrupt the CPG and apparel industries. We’ve acknowledged the significance of Whole Foods 365, particularly for CPG e-commerce brands. As retailers like Amazon and Whole Foods offer inexpensive, high-quality goods that can be delivered quickly and conveniently, the impact they’re having doesn’t come as a surprise. Despite all of this, LaCroix isn’t going anywhere.

Brand loyalty is different, not dead

Brands and retailers alike have struggled to adapt to changing consumer preferences. As McDonald’s Global Chief Brand Officer Steven Easterbrook claims of millennials in a 2014 interview, “They’re promiscuous in their brand loyalty. It makes it harder work for all of us to earn the loyalty of the millennial generation.” However, customers have proven to be incredibly loyal to products and services they deem worthy of their hard-earned time and money. Spotify’s customer base, for example, stood their ground despite aggressive competition, thanks to the streaming service’s strong brand and superior product. In the modern-day economy, a half-smashed double cheeseburger is less likely to have the same impact.

LaCroix has 21st-century brand loyalty. As the Quartz article states, “LaCroix has been reborn a millennial status symbol whose shiny pastel cans fill the fridges of Los Angeles screenwriters and Silicon Valley startups, and have even inspired a line of T-shirts.” Yes, the product is good, but more than that, the branding is great. As Business Insider puts it, “LaCroix Sparkling Water has catapulted from near-oblivion to cult status in the matter of a couple of years.”

To top it off, LaCroix is an accessible, inexpensive product. While a San Francisco Whole Foods sells a 12-pack for $5.99, or around 50 cents a can, an Amazon customer can purchase the same case for $4.77. By comparison, $3.99 for a no-name alternative may not be a deal-breaking difference to most shoppers. Furthermore, 365 Sparking Water is currently only available at Whole Foods. At the time of writing this article, the product can’t even be found on Amazon. LaCroix, however, can be found in stores and on e-commerce platforms across the map.

It’s clear that the high volume of up-and-coming white label products has brands on their toes. However, by leveraging a strong product, solid branding, and great storytelling, brands have the opportunity to thrive in the world of retail and e-commerce.