Liquid Death, a water brand that began life in 2018 with a funny video to first test the concept, has grown deadly serious about its growth prospects. The L.A.-based outfit, which sells canned mountain water from the Alps that will “murder your thirst,” has just landed $75 million in Series C funding led by the startup studio Science Venture, which helped launch the company and now owns a “strong minority” position. (Says Science cofounder Mike Jones, “I wish we owned more.”)
We talked earlier today with Liquid Death’s cofounder and CEO, Mike Cessario, a West Coast agency creative-turned-entrepreneur, about the company’s growth. Seemingly, there is a lot to boast about. According to Cessario, Liquid Death is now carried in more than 29,000 locations throughout the U.S. including Whole Foods, Target, Safeway and 7-Eleven stores, and revenue reached nearly $45 million last year, up from $3 million in 2019 when the company sold its first can.
He thinks there is a lot of room to grow from here, including through flavored waters that Liquid Death is beginning to roll out with names that suit the brand’s punk-metal ethos. Its first three products? Berry It Alive, Severed Lime, and Mango Chainsaw.
Cessario has long credited the firm’s growth with its grimly funny phrasing, along with its packaging, arguing that aluminum is more recyclable than plastic (though, of course, no single-use container is great for the environment). Still, he’s particularly proud of Liquid Death’s organic growth strategy, one that has enabled the outfit to compete and even thrive in a world rife with other water brands. Indeed, asked how much Liquid Death spends on marketing compared with other beverage brands, Cessario insisted there is no comparison.
“I don’t know what other water brands spend, but we’re not going to have Coca-Cola or Pepsi-like budgets to spend. We don’t have $300 million to throw at something, so every piece of marketing that we make has to be interesting or entertaining so that people organically spread it.”
Some of these marketing pieces come together quickly, he said, in two weeks or less when “an idea comes out of nowhere.” Other times, a marketing piece can be a six-month-long process. Take a stunt last summer by Liquid Death and one of its handful of celebrity investors, Tony Hawk, who teamed up to sell 150 skateboard decks whose ink included some blood from Hawk. The decks sold out quickly, said Cessario, but making the decks, as well as lining up a phlebotomist who could “legally draw blood and was willing to be on camera” took some time, he said with a laugh.
In an even more extreme gimmick, Cessario had the face of an avid Liquid Death customer tattooed on his arm.
As for how the company’s strategy changes now that it has more products to push, Cessario told us that the focus remains squarely on building a brand “that’s about making healthy beverages as fun or more fun than junk food and alcohol brands.” Because its demographic skews younger and male, and because “young kids and most men have more of a palette for sweeter things,” observes Cessario, that means new drinks, which Cessario said are sweetened by agave nectar and feature just three grams of sugar and 20 calories per drink. (“We aren’t catering to people who are obsessing over every last calorie,” he noted.)
Certainly, he said, there are plenty of places in the U.S. that have yet to discover the brand. Pointing to a beverage industry metric called ACV (for all-commodity volume) that represents the total annual sales volume of retailers that can be aggregated from individual store-level, up to larger geographical sets, Cessario said that Fiji water has 90% ACV whereas Liquid Death was approaching just 9% at the end of 2021.
A sweeter deal with Amazon may well boost that percentage. Specifically, said Cessario, Liquid Death recently passed an important metric that Amazon uses to decide when to start selling a product wholesale, meaning Liquid Death no longer gets charged for every case of water that it sells through Amazon but instead is selling water directly to the e-commerce giant, which then sells the water directly to its customers at a reduced price — and has sent sales soaring, said Cessario.
It matters, he continued.”For a lot of food and beverage brands, Amazon is often their biggest sales channel.”
Other investors in Liquid Death’s new round include Live Nation, PowerPlant Partners, Access Capital, and Nomad Ventures.
Altogether, Liquid Death has now raised $125 million.
It is not disclosing its valuation.
