THE WALL STREET JOURNAL. ** Friday, November 8, 2019 |B3
tember reported its third
straight year-over-year quar-
terly sales decline, following
five years of steady growth.
The results “were even
worse than our soft expecta-
tions due to the rapid decelera-will have about the same alco-
hol content as a beer and come
in flavors like strawberry and
mango. Constellation Brands
Inc. is also preparing to launch
a Corona seltzer.
National Beverage in Sep-tion of the LaCroix brand that
has yet to find a bottom,”
Guggenheim analyst Laurent
Grandet wrote in September.
He noted last week the decline
of LaCroix’s sales had slowed to
11.5% in the four weeks ended
Oct. 19, a slight improvement
over the previous month, as the
company increased its promo-
tional activity.
“LaCroix remains the No. 1
brand of sparkling water in the
United States,” a National Bev-
erage spokesman said. “The La-
Croix brand and its perfor-
mance clearly demonstrate
leadership.”
Private-label seltzers this
year have entered the market,
the spokesman said, and name
brands have offered promo-
tional discounts. He noted
that LaCroix had been among
the first to offer cans without
liners containing BPA, a chem-
ical that some consumers
want to avoid because of
health concerns.
LaCroix’s sales started to
slow last year after PepsiCo
launched Bubly. Coca-Cola,
meanwhile, was expanding dis-
tribution for Topo Chico, a
sparkling mineral water from
Mexico it acquired in late 2017.stood at 10.5%.
Coke’s Dasani Sparkling, in-
troduced nationally in 2014,
was too similar to other selt-
zers on the market, Coke execu-
tives said. So the beverage gi-
ant decided this year to scrap it
in favor of a new, stand-alone
brand. Aha has stronger flavors
than LaCroix, which developed
a cult following with drinks
that had just a hint of flavor.
Aha is set to go on sale in
the U.S. in March with eight fla-
vors, including two options—
Citrus + Green Tea and Black
Cherry + Coffee—that contain
30 milligrams of caffeine, a lit-
tle less than a can of Coke. The
brand’s developers looked for
unusual flavor combinations,
such as strawberry with cu-
cumber, that would help it
stand out, said Celina Li, vice
president for water at Coca-
Cola North America.
The name Aha was inspired
by the reaction people have had
in taste tests, executives said.
Brewers have also capital-
ized on interest in seltzers by
rolling out alcoholic versions.
Anheuser-Busch InBev SA said
Wednesday it will release a Bud
Light Seltzer in the first quar-
ter of 2020. A 100-calorie canBUSINESS NEWS
The maker of LaCroix, beset
by falling sales and increased
competition, faces another
threat:Coca-ColaCo. is launch-
ing a new flavored seltzer
brand with caffeinated options.
Coke’s new offering, called
Aha, is a late entrant to the cat-
egory. The market-leading bub-
bly water, LaCroix, has lost
market share over the past year
as new drinks crowd store
shelves. PepsiCo Inc. last year
launched a competitor called
Bubly. A startup called Spin-
drift, made with a splash of real
juice, has been gaining momen-
tum. And private-label seltzers
abound.
Sparkling water sales have
soared as consumers switch
from soft drinks to healthier
options. But Coke’s flavored
seltzer line, Dasani Sparkling,
hasn’t gained traction.
U.S. retail-store sales of
Coke’s flavored seltzers had a
market share of 2.5% in the
four weeks ended Oct. 5, ac-
cording to Wells Fargo analyst
Bonnie Herzog. National Bev-
erage Corp., which makes LaC-
roix, had a market share of
16.6% and PepsiCo’s shareBYJENNIFERMALONEYCoke Shakes Up Seltzer Market
Market share for selected
flavoredseltzer,52weeks
ended Oct. 5U.S. consumption
of sparkling waterNational BeverageLaCroixNestleArrowhead,Perrier,Poland
Spring,S.PellegrinoPepsiCoBublyPolarCoca-ColaDasani,TopoChicoSpindriftSources: Beverage Marketing Corp. (consumption); Wells Fargo analysis of Nielsen dataU.S.consumptionofsparklingwaterhasgrownandthemarket
hasgottenmorecrowded.Note: Total market includes Sparkling Ice, a carbonated beverage with the same artificial
sweetener as diet sodas that markets itself as sparkling water.18.0%11.38.57.71.22.64000100200300million gallons2000 ’05 ’10 ’15the U.S. in the latest quarter,
while the overall market for
midsize trucks grew 25%. A
spokesman said a supply
shortage was partly to blame.
Executives have said they
could sell around 100,000
more Tacomas a year if they
could build them, and have
been scrambling to start up a
new plant for Tacomas in
Guanajuato, Mexico.
The heavy competition in
SUVs is bad news forNissan
MotorCo., which has been
looking to dial back spending
on financial incentives.
Nissan’s sales volume is
down and profits haven’t
picked up. The company is
scheduled to report its finan-
cial results for the latest quar-
ter on Tuesday.Gupta, chief operating officer
atMitsubishi MotorsCorp.
Mitsubishi Motors revised
down its sales expectations in
the U.S. for the rest of the
year despite having an SUV-
heavy lineup.
Toyota is the only Japanese
car company with a full lineup
of trucks and SUVs to compete
with Detroit’s offerings, and
that is helping bolster results.
Toyota’s revenue in the
July-September quarter rose
4.5% to ¥7.6 trillion ($70 bil-
lion); and, while analysts were
expecting a decline, net profit
rose slightly to ¥592 billion
($5.4 billion).
Toyota’s problem in the U.S.
is one of keeping up with de-
mand. Sales of Toyota’s mid-
size Tacoma truck fell 2.8% inecutive vice president. “There
are many customers who are
extremely price-conscious.”
Mazda hopes a new small
SUV, the CX-30, will help do
what the Mazda 3 couldn’t.
The better money is in
pickup trucks, where a boom
in popularity is leading to re-
cord prices.
The rush for trucks is buoy-
ing the results of General Mo-
tors Co., Ford Motor Co. and
Fiat Chrysler Automobiles NV.
More than half of Ford sales in
the July-September quarter
were pickups, while the por-
tion for GM was about 30%.
That compares with around
15% at Toyota.
“If you categorize the U.S., it
is between trucks and the rest
of the trucks,” said Ashwaniproduction to meet shifting
American demand. The prob-
lem was their rivals did the
same and often faster—with
the wide range of options
meaning slimmer profits, Jap-
anese car companies say.
Mazda MotorCorp. slashed
its sales and profit expecta-
tions for the year ending
March 2020 citing the U.S.
The company overhauled its
lineup in an attempt to get
shoppers to pay more, and the
new Mazda 3 hatchback and
sedan went on sale in March
to rave reviews. Nonetheless,
U.S. sales of the Mazda 3 were
off by more than 20% in the
most recent quarter.
The U.S. market “is in a
very difficult condition,” said
Kiyoshi Fujiwara, Mazda’s ex-American car buyers’ appe-
tite for pickup trucks and
sport-utility vehicles keeps
growing to once-unimaginable
levels—which is generally bad
news for Japanese auto makers
not namedToyota MotorCorp.
Toyota, Japan’s largest car
maker by sales, reported a rise
in profit for its latest quarter
and maintained its full-year
outlook. Other major Japanese
auto makers have lowered
their forecasts, at least in part
because of concerns about
their prospects in the U.S.
Historically focused on se-
dans, Japanese makers spent
years playing catch-up in the
U.S. market, refreshing old
SUV models and ramping upBYSEANMCLAINToyota Stays on Course as Rivals Stumble in U.S.
General Motors Co.’s
closed Lordstown, Ohio, as-
sembly plant—which became a
flashpoint for President
Trump and unionized work-
ers angry over the com-
pany’s factory closures—has a
new owner.
The auto maker has sold
the factory to a new electric-
truck maker,Lordstown Mo-
torsCorp., for an undisclosed
amount, the startup company
said Thursday. Lordstown
Motors said it is seeking to
begin production in late 2020.
The sale could help the area
become an electric-vehicle
manufacturing hub, GM said.
GM has said it will invest in a
nearby factory that will make
battery cells for electric autos.
GM disclosed in May it was
in talks to sell the plant to the
manufacturer, saying the move
would preserve jobs as the
auto industry transitions from
traditional gas-powered vehi-
cles to those running on elec-
tricity. That news was lauded
by President Trump, who had
urged GM to keep the factory
open and salvage jobs.
During recent contract ne-
gotiations, officials with the
United Auto Workers—the
union representing workers at
the factory—unsuccessfully
pressed GM to earmark a dif-
ferent model to the plant to
keep it open. Instead, the new
four-year contract ratified by
GM factory workers last
month after a 40-day strike
paved the way for GM to close
or sell the factory.
The electric-truck startup
plans to use union labor
but has yet to have contract
discussions with the UAW, said
Steve Burns, Lordstown Mo-
tors’ chief executive.
GM said it no longer needed
the factory because of poor
sales of the Chevrolet Cruze
compact car built there.
BYMIKECOLIAS
GM Sells
Closed
Factory
In Ohio
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