How a Joke Became a $1.4 Billion Company - Liquid Death

no retailer will ever put liquid death on the Shelf in the US That's Mike Cesario founder CEO of canned water company liquid death which is currently valued at $1.4 billion and it all started with one big joke for years a bunch of marketing [ __ ] boys have tricked you into thinking that water is just some girly drink for yoga moms just look at all the cute brand names and dainty little bottles water is water is dead it kills innocent Surfers and snowboarders and kayakers every year water is responsible for thousands and thousands of deaths energy drinks only kill like what one or two kids most people first hear about a beverage company called liquid death they think wait that's a real thing and then they think oh that's an alcoholic beverage but no this is canned water with an insane Touch of marketing Mike thought what if you could actually make water cool and to quote Mike he said a brand transcends functional benefits if your brand is just functional benefits then you don't have a brand and I love this quote because it really speaks to how some of the most Innovative companies think and operate today now before we get into the crazy marketing strategies that have helped make liquid death become so successful we need to go back some time to understand how this company got started prior to starting this company Mike Cesario worked for a marketing agency in Nashville Tennessee they helped create advertising for Netflix apple and several other notable Brands one of the companies was organic Val would traditionally been a milk company but wanted to Branch out into selling protein shakes Mike realized that this company needed to start advertising to a different Market is they had only been advertising to moms concerned with organic milk a rather niche market so we helped create an advertising campaign selling to Jim Bros and tailoring their advertising to people who wanted to get jacked Mike understood that in order to Garner more attention he needed to go against the grain of what was normally promoted to customers but Mike was constantly in meetings with these big companies trying to convince them of doing something different and bold with their marketing strategy but rarely would they ever listen most corporations want to tow the line and be incredibly safe or in mic size boring this lesson in marketing would become a staple for what was to come with liquid death during the summer of 2009 the idea first began a friend of Mike's put him on the backstage list for The Warp Tour concerts like these were often sponsored by soda companies and energy drinks and this one in particular was sponsored by Monster Energy now it would be common to see monster everywhere here and artists would be drinking lots of the these beverages during their performances or so it looked like Mike got a view from behind the scenes of these artists and knew they couldn't be drinking four monsters in a couple hour span while performing live music so while backstage he saw that they weren't actually drinking Monster Energy they were drinking Monster Tour water which was just water in a Monster can a popular method these kinds of companies used to get their sponsored talent to actually be looking like they were using their product but monster wasn't selling this canned water in retail and at first this kind of pissed Mike off he felt like the brands were being deceiving but this is what sparked the idea for liquid death as he wondered why there weren't any healthy options that delivered on cooler branding such as Monster Redbull Mike realized all of the cool marketing was coming from junk food and soda companies but a water company well they weren't doing any sort of advertising like that so in 2014 Mike was working on a public service ad campaign about the health risks of sugary energy drinks and he proposed an idea of doing a canned water stunt that would make fun of the energy drink industry but the client wasn't interested so Mike kept thinking about the idea during his free time and trying to figure out more details on how he could potentially execute on it not for a client but for himself Mike said you kind of have to trick your brain to come up with a bad idea to truly be thinking in Innovative territory it works really well because you start thinking like oh what's the dumbest possible name for a super healthy safe beverage liquid death probably the dumbest name so using what he had learned from past jobs at ad agencies Mike decided he wanted to create a company with a name that was unlike any other and one that poked fun at the soda and energy drink industry so on July 6th 2017 Mike filed the term liquid death for trademark but there were two big problems he lacked the money and he knew very little about the beverage industry as a whole in the beginning Mike created a 3D render of the liquid death can and he started looking for potential investors but none of them thought it would work they said it looked too much like a beer can and retailers would never want to sell something with the word death on it Mike didn't stop though he said he would scour LinkedIn for bottled water consultants and call them up and try to gather more info on how he could put water into cans but they would tell him that they weren't familiar with any co-packers that could put water into cans the C- packing situation was rather complicated all of the co-packers used plastic for bottled water nowhere in the US could produce it at least not at an affordable cost but he did find someone over in Austria that said they could do it so Mike flew out to meet with them and things started to actually progress simultaneously during all of this Mike had created a Facebook page for liquid death and spent a few thousand dollars of his own money to create an ad for the product which at the time he had none of because liquid death still didn't actually exist nonetheless the ad became a huge hit and only four months later the video had 3 million views and the Facebook page had almost 880,000 followers which was more than aquafina's Facebook page at the time today the ad has over 5 million views on YouTube and the comment section is filled with positive comments not your average response to an ad but the ad was actually funny they swore in it they played right into the stigma that bottled water had and they made it so out landish that it had a shock value to it like you actually thought wait a minute is this real but more on the marketing tactics in a bit ideas are worth 0 everybody in the world has a great idea but it's the people that can execute it the best that create the value so now that Mike had a supplier and a lot of traction with the Facebook page he felt like he could move into finding some investors for the company the first round of funding was from friends and family many of these people threw in anywhere from 5 10 to 20 grand and this allowed Mike $150,000 to get a minim minimum run of product and launched directly to Consumers online the first sales were 12 packs of 500ml cans for $20 and in the first month liquid death sold $100,000 worth of product while only spending $2,500 on marketing of course $20 was and is a lot for a 12pack of canned water but they were spending a lot on shipping since they were getting it all the way from Austria and then again on shipping when it came to selling it to Consumers online so they had to charge a premium at first in order to make their money back and etch out a small profit they first launched on their liquid death website and then got it onto Amazon and they knew this method was good enough to get started but that it wasn't going to be sustainable for the long term most people don't go online to buy beverages they buy them in person at retail stores particularly when they're thirsty a lot of purchases are an Impulse buy but the problem of getting into retail was going to be a huge hurdle for them to face it wasn't just the controversial name of liquid debt retail is a Cutthroat game they have to go up against the biggest beverage conglomerates like Coke and Pepsi who have much more money and much more resources this means they can get the prime retail space and sell at lower cost because they do so much volume and in order for a retailer to add liquid death something has to get removed there's only a finite amount of space but velocity is the name of the game here velocity is basically how quickly a beverage product sells in a store usually units per week per store but it's a key indicator for Consumer demand for that product and despite liquid death's initial success online and with social media retailers weren't really convinced so instead of trying to get into big retailers Mike had a better idea let's try to get into bars instead he thought now bars weren't necessarily convinced of liquid death being a success either bottled water wasn't necessarily a hit for bars but liquid death was able to get the product into some different locations and boom it was a success liquid death was a conversation starter it looked different the name was out there and if someone had it it made other people want to know more of course bars don't make money when they give out tap water but they will if they're selling liquid death there's also an aspect to this that's sort of undervalued that makes drinking a non-alcoholic beverage in a setting like that kind of cool so the company was beginning to take off and Mike was continuing his attempts to get the product into retailers in the spring of 2020 in fact the exact same week the pandemic hit the US Whole Foods gave liquid death a full National launch they said they loved their slogan death to plastic because aluminum cans are infinitely recyclable and Whole Foods Lov sustainability now I have to mention that the full National treatment from Whole Foods was a huge huge deal because this meant that liquid death was going to be in every location in the US and this is not typically how big retailers do things what they'll usually do is test a product in a specific store or section of the country first they'll basically do a trial run see how it performs and then from there depending on how it does the product might get into some more locations so not only did this help with liquid death sales it also gave them some validation for getting into other retailers they could also sell their product at a much lower cost in the fall of 2020 they were able to get into the Southern California territory of 7-Eleven and the product did well resulting in a full National launch in 7-Eleven during the winter of 2021 in the first year when they were exclusively on the internet liquid death only did 2.8 million in Revenue now I say only with the context of in 2023 liquid death did 263 million in revenue and this was up 100% from 2022 when they did $110 million in Revenue liquid death's marketing philosophy is based 100% on entertainment they take edgy approaches to promoting their brand and they're rather Unapologetic in doing so Mike's quoted saying we don't want to make marketing we want to make people laugh this serves as a stark contrast among their peers some examples are them using Tony Hawk's blood to create limited edition skateboard Graphics having an adult film star promote the drink while explaining the dangers of plastic bottles and having steo get a liquid death neck tattoo I mean I could go on and some of the stuff I might get flagged by YouTube for if I was to show it or bully describe it which is hilarious and bizarre all in the same breath because it's literally an ad but nonetheless they have taken a very unorthodox approach and it's clearly working one of my favorite ways they've applied this is their most recent ad where they are giving away an actual jet if you ever saw the Netflix documentary Pepsi where is my jet then you'll get a kick out of this and if you didn't see it well basically in the 9s Pepsi did a similar giveaway except when the person actually won Pepsi was like oops we're just kidding so the guy took him to court and sued but he lost so liquid death is clearly made making fun of their competitor Pepsi by doing this and also of course doing something Brazen at the same time the Winner's also receiving a year-long supply of liquid death in 2022 liquid death continued to expand its beverage offerings into other categories under the liquid death name it started with flavored sparkling water which has agave in it so it's more of a healthy alternative to soda and then they got into different kinds of Iced Teas and most recently they released death dust which is an electrolyte drink mix even their drink names are hilarious like mango chainsaw or rest in Peach but the craziest one of all was their armless Palmer name which was for their iced tea lemonade drink and it wasn't long until they had an issue with that in the fall of 2023 they released an Instagram post saying the estate of Arnold Palmer was suing them so in order to avoid a senseless legal battle with someone who has way more money to spend they would change the name to dead billionaire and to go by the old cans while you still could now without a doubt liquid death is facing more competition now than ever before the big players in the industry like Coke and Pepsi are not just going to sit by idly and watch Gatorade which is owned by Pepsi released several new rehydration products including their own bottled water this year monster has released their own warp Tor canned water to retailers I bet they wish they did that a lot sooner and many of the other National water companies are owned by Coker Pepsi like danani Aquafina SmartWater Etc these conglomerates have way more money to spend their own Supply chains Prime real estate and retailers and many more employees so while liquid death has received over over $200 million from several rounds of investment funding and many investors are notable celebrities like Tony Hawk Martha Stewart Josh broland DeAndre Hopkins and Live Nation there was a report in 2023 that liquid death was working with Goldman Sachs on an IPO in 2024 this means the company would go public and be listed on the New York Stock Exchange but nothing is official as of the making of this video however it does beg the question how long can the joke last as of March 2024 the company is still not profitable which isn't necessarily a huge shortcoming for them as they're still in their early years focused on growth and expansion but to me the greater question is if they do sell out to go public what parts of the company remain intact and what parts Fall Away into history B and edgy advertisements are bound to rub some people the wrong way and when you start having to answer to shareholders on Wall Street your priorities certainly will shift so while liquid death is definitely disrupting the industry it remains to be seen for how long now if you enjoyed this video please consider subscribing to to the channel and if you're interested in the real reason why Red Lobster went bankrupt I broke it down in this video here thanks so much for watching peace

Channel: Established Context

Views: 143,679

Keywords: Liquid Death, The rise of Liquid Death, Liquid Deaths Success Story, How a Joke Became a $1.4 Billion Empire, Liquid Death 1.4 Billion Dollar Company, Canned water Liquid Death, Liquid Death History, The Rise of Liquid Death, Established Context, Established Context Liquid Death, Liquid Death Story, Liquid Death Water, Liquid Death Canned Water, What is Liquid Death?, History of Liquid Death, the story of liquid death

Id: u0ElPkksdI0

Length: 13min 7sec (787 seconds)

Published: Wed Jun 12 2024