This startup sells water disguised as craft beer—and is valued at over USD 700m

Scott Peterson10/10/2022

According to one investor, Liquid Death is "perhaps the world's fastest-growing non-alcoholic beverage brand of all time"

Liquid-Death-Fans trinken das Wasser gerne so, wie man manche gerne Bier trinken. In den USA heißt die Praxis "Shotgunning".
Liquid-Death-Fans trinken das Wasser gerne so, wie man manche gerne Bier trinken. In den USA heißt die Praxis "Shotgunning". (Quelle: Jahn Lemieux auf Tiktok(`)
Table of contents
  1. "Only junk food added entertainment to advertising"
  2. Heavy metal and 80s horror as inspiration
  3. "Why is there no cool water brands?"
  4. U.S. tech celebs invest in Liquid Death
  5. Fragile masculinity meets pseudo-environmentalism?
  6. "If you're not pissing anyone off, you're not doing it right."
  7. A network of 60,000 outlets
  8. Machine Gun Kelly and Tony Hawk as investors
  9. State-of-the-Art Digital Marketing

No one wants to be "that" guy or gal at a party or concert. The person killing the vibe because they don’t (want to) drink alcohol. Tapping into that angst, it’s one of Liquid Death's central promises. The US startup deals H2O dressed in cans that look like they’re the latest craft beer you’ve never heard of. Founded in 2019, the company is worth USD 700m and expects to reach USD 130m in revenue by 2022. Growth can primarily be attributed to atypical and polarizing marketing. OMR breaks down the marketing recipe to its success, as well as the constant criticism following the brand.

"When the Wall Street Journal asked why he was toting a tallboy of Liquid Death at a recent Megadeth concert, 37-year-old Bob Lugowe said simply, "I didn’t want to get made fun of for drinking Poland Spring at a punk show." At first glance, the can’s look—a zombie skull and gothic font in stark black and white—screams some strong AF IPA. It is, in fact, nothing but water. Another plus for rowdy concert-goers, according to Lugowe—an indie record shop owner from Philadelphia—is that the can lends itself to being crushed on foreheads.

"Only junk food added entertainment to advertising"

Liquid Death's success is a testament to the changing drinking habits of U.S. consumers. Alcohol consumption has slowly, but steadily declined in the U.S. recently. At the same time, sales of bottled water are growing at an enormous rate. A whole range of startups and beverage brands are trying to capitalize on this trend with NA and low-octane "spirits" like Athletic Brewing, Ghia and De Soi, but also brands like LaCroix, Aha (part of Coca-Cola) and Bubly (Pepsico), which have carbonated and partially flavored water in their product range.

Many of the young brands feature colorful designs and emphasize the health benefits of their products. Liquid Death, on the other hand, stands out not only in terms of packaging due to its crass appearance, but also underscores—tongue-in-cheekily—the danger of water in its name and in videos, which have since gone viral.

The "deadliest stuff on earth": water.

Heavy metal and 80s horror as inspiration

To do this, the startup unabashedly draws on pop culture, especially heavy metal and horror films. The company ironically applies the clichés from both genres to the brand. From the name Liquid Death and look of the cans to its core slogan of "Murder your thirst." The can features a tale that reads like the plot of an 80s slasher flick. A group of teens take a weekend trip to the mountains, where they gulp down bottled water. They are hunted down by a can of mountain water that desires to murder their thirst and recycle their souls. The brand's mascot is the "Executioner," a shirtless, muscle-bound and axe-wielding creature with eyes instead of nipples and in place of a head has a Liquid Death can.

Not for the faint of heart: an earlier viral video for Liquid Death featuring the "Executioner"

In marketing campaigns and social media videos, Liquid Death repeatedly relies on a mixture of shock effects, targeted provocations and humor. During this year's Super Bowl, for example, they ran a spot on regional stations showing a bunch of 10-year-old kids letting loose at a party, slamming one can of Liquid Death after another, while a cover of "Breaking the Law" by Judas Priest blares in the background. To anyone unfamiliar with the brand, it looks like kids drinking beer. In the spot, it’s only after an obviously pregnant mother looks at the little ones with a good-natured look on her face and then also grabs a can herself that we are let in on the ruse: "Don't be scared, it's just water."

Don't be scared, it's just water

"There's a void for entertaining and bold marketing in the health food space," said Liquid Death founder Mike Cessario in a 2021 interview. "The really fun stuff that people can remember comes from junk food brands. That's why with Liquid Death, we're taking the healthiest thing you can drink—which is water—and branding and marketing it to compete with junk food."

"Why is there no cool water brands?"

Now, it must be said that this provocative style is not well-received by all consumers. But even negative reactions serve as fodder for the brand's attention machine. Liquid Death has recorded two albums called "Greatest Hates Vol. I + II"—one volume metal style, the other punk (by successful music acts Alkaline Trio, Rise Against and Anti-Flag). The songs' lyrics are based on comments made on social media and range from "Fire Your Marketing Guy," "Dumbest Name Ever for Water" to "I Thought This Was Alcohol." Both records are not only available on Spotify, but were also released and sold in limited quantities on vinyl.

A creative way to field hate comments—and make music out of them

U.S. tech celebs invest in Liquid Death

Liquid Death founder Mike Cessario says he played in punk and hardcore bands himself in younger years. He came up with the idea for "cool water" back in 2005, when he was as a student, after he was at a punk festival, where the bands playing were drinking from cans of festival sponsor Monster (an energy drink)— but they actually contained water. "I thought that was pretty absurd," Cessario told Inc." After all, in the blazing sun, everyone would drink water," he said. "So why isn't there water that—in branding terms—is really cool?"

In 2017, Cessario (who by now is an advertiser and by this point has already worked at prestigious U.S. agencies for major clients) comes back to the idea. For a few thousand dollars, he produces a brash commercial with a first draft of a Liquid Death can and pushes it with a media budget on Facebook to test the potential of his idea. The idea is met with success. Various retailers come forward who are keen to include Liquid Death in their range. Within a few months, the clip generates more than three million views, Cessario says in several interviews.

He starts looking for investors to produce a first batch and convinces U.S. advertising legend Alex Bogusky—a former employer—to get on board. A representative of "Science Lab," a mixture of brand incubator and VC, contacts Cessario on his own accord after seeing the first Liquid Death video. Science Lab takes a stake in Liquid Death and also brokers investments from U.S. tech celebrities, such as Michael Dubin (founder of Dollar Shave Club), Biz Stone (co-founder of Twitter) and Jen Rubio (of luggage brand Away), ending up with USD 1.6m in seed funding.

Fragile masculinity meets pseudo-environmentalism?

Liquid Death then officially launches in early 2019. Initially, the water comes in 12 packs and sells in the company's online store and via Amazon. From the beginning, the brand attracts a lot of attention thanks to the aforementioned "Deadliest Stuff on Earth" video, as well as a portrait of Mike Cessario by Business Insider. The reactions are, in part, extremely positive, but also very negative. Left-wing U.S. media types and marketing professionals lampoon it on Twitter, taking aim at, among other things, the concept of "fragile masculinity," which in their eyes underlies the image of Liquid Death ("Finally! Water for REAL men!").

They're not the only ones questioning the usefulness of water in a can. The Liquid Death team positions its product very boldly as a more environmentally friendly alternative to water in plastic bottles. Aluminum is easier to recycle and the proportion of aluminum that is returned to the material cycle is also very high. In addition, the startup says it donates a portion of its revenue (it says 10 percent on the can) to environmental organizations.

With videos like these, Liquid Death extols the benefits of aluminum beverage cans over plastic bottles

"If you're not pissing anyone off, you're not doing it right."

But the cost of producing aluminum is significant, as the New Yorker points out, as huge areas of rainforest are often cleared to mine the bauxite ore needed to make aluminum. On top of all of that, the water for Liquid Death comes from Austria—there is no supplier in the U.S. that can bottle non-carbonated water without preservatives, says founder Mike Cessario. So Liquid Death has water shipped to the U.S. from the Alps. Cessario calls this approach very CO2-efficient.

Part of the truth is that there is no deposit system in the U.S. and tap water often includes chlorine. Furthermore, recovering alcoholics thank Liquid Death on social media for helping them get through unpleasant situations or a become abstinent with the brand's product. In press interviews, Liquid Death's founder is quite receptive to criticism, like when it comes to accusations of sexism. At the same time, elsewhere he cites Patagonia founder Yves Chouinard and his credo "If you're not pissing off 51 percent of the people, you're doing something wrong" as a source of inspiration.

A network of 60,000 outlets

The trajectory Liquid Death has taken since its launch shows that Cessario can afford to take that attitude, at least from a personal and business perspective. For example, the brand's distribution network has grown rapidly. Since late 2019, Liquid Death has been available at convenience store chain 7-Eleven and since March 2020 at upscale supermarket chain Whole Foods, which is part of Amazon. As of today, Liquid Death is reported to be available in 60,000 stores in the US.

The company also said it has closed other investment rounds, the latest being its "Series D" in early October. In total, it has thus raised more than USD 200m. On the one hand, this has enabled the startup to expand its product range. For example, Liquid Death is now available in a carbonated version as well as three flavored variants. Secondly, it has been able to run one viral campaign after another at a high rate of impact.

Machine Gun Kelly and Tony Hawk as investors

Since the previous funding round, events group Live Nation has also taken a stake in Liquid Death, reportedly making the startup the exclusive water brand in many Live Nation venues. In the same wake, music and entertainment stars Wiz Khalifa, Machine Gun Kelly, Steve Aoki, Tony Hawk and Kelly Campbell have also invested in Liquid Death. That has opened up new reach and viral campaign opportunities for the startup: selling skateboards painted with Tony Hawk's blood for charity, and a video in which Wiz Khalifa touts Liquid Death as "the best bong water in the world." Jackass star Steve-O recently had the brand name tattooed on his neck with water.

"Liquid Death is so much bigger than just a water company," Mike Cessario says on the My First Million podcast. "We see ourselves as a pop culture factory." Brands, he says, are competing with everything great on the Internet with their social posts: influencers who can do unusual things, movie trailers, etc. Liquid Death therefore sees marketing more as entertainment. Apparently successfully. According to Science Lab co-founder Peter Pham, Liquid Death recorded more than 21 billion (!) organic media impressions last year and twice the engagement of Red Bull.

State-of-the-Art Digital Marketing

Everything else about Liquid Death's marketing seems state of the art, too: with its own Tiktok account alone, the company boasts 2.8 million followers, 14.8 million likes and (according to Infludata) 165 million views. For videos with the hashtag #liquiddeath, Tiktok currently has 195 million views. Liquid Death sells via Amazon and has accumulated more than 26,000 (90 percent positive) reviews there so far, is naturally active in influencer marketing, and runs a members' club ("Country Club") where you have to sell "your soul" to become a member. The startup is also experimenting with more recent trends such as its own NFT collection and associated Discord server.

According to Mike Cessario, the more elaborate marketing campaigns often pay for themselves. The vinyl version of "Greatest Hates" has sold 700 copies. The loyal community that Liquid Death has built up in the meantime spent USD 3m on merchandising last year. Total sales are said to have amounted to USD 45m. This year, the startup plans to nearly triple that amount, to USD 130m. Apparently, Liquid Death is also considering an IPO and expansion into Europe.

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Scott Peterson
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