Sparkle Co., a mid-sized private beverage company, faces declining profitability despite overall market growth. The case explores diagnosing profitability issues and evaluating a potential new product launch. Key findings include losing market share, consistent gross margins, and reduced R&D spending. Consumer research reveals opportunities in health perception and packaging. The case concludes with an analysis of launching a new line of premium functional beverages, considering market projections, costs, and strategic implications for the company’s future growth and profitability.