March 20, 2025 • 51 mins
Marketing maestro, Mike Cessario describes Liquid Death as an entertainment company.
He calls Amazon the great equalizer, and articulates his goal to build a multi-category, healthy beverage platform.
His advice to entrepreneurs is “to de-risk the offer” and “pursue something you know better than anyone else.”
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Transcript
Episode Transcript
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Speaker 1 (00:02):
Hello friends, old and new, and welcome to Drinks
with Caroline.
I'm so happy you've joined mefor what I believe will be
another stimulating conversationwith an industry expert,
founder or otherwise fabulousperson in the consumer industry.
Mike Cessario, welcome toDrinks with Caroline, I am so
(00:24):
excited to have you.
I have just cracked my liquiddeath dead billionaire tea,
lemonade, agave with vitaminsdrink and I'm super excited.
And if I drink the whole thing,I'm not going to last the whole
podcast because I'll have to runto the bathroom but, it looks
really delicious, so I'm reallygrateful that you agreed to join
us, because you have got one ofthe best founder stories ever.
(00:46):
I'm hoping you'll start withtelling us just how you came to
be the beverage guy yeah, thanksfor uh, having me on thinking
of me.
Speaker 2 (00:55):
I mean, my sort of journey was I was in advertising
on the creative side for abouta decade, working for big
agencies and working on allkinds of brands, from Volkswagen
to Domino's Pizza to Netflixand things like that and I
started getting frustrated thatthe big companies weren't really
marketing for the year that welive in.
(01:17):
They were still living in thepast of what marketing was in
the 90s, before social media andwhere people's attention was
not solely on their phones andall that.
So kind of wanted to start myown product where I could
control the way it was brandedand marketed in the way that I
think modern brands should brandand market.
(01:37):
And yeah, I wanted to dosomething in the healthy space
because what I had seen in mymarketing background is all the
funniest, most irreverentmarketing.
That's the most memorable, isall for stuff that's terrible
for you, like it's beer, candy,junk food, fast food, like
that's all the funny marketing,whereas healthy things were
(01:58):
never marketed in a fun way andit made no sense.
Why made no sense?
Why?
So Liquid Death was you know mywant to make a healthy product.
That's even funnier than theunhealthy stuff that people were
used to seeing for a long time.
Speaker 1 (02:13):
You make such a good point because, yes, it's like to
sell dare we say it a cigaretteor alcohol.
They've often had the bestcreative, and now you come along
and you're disrupting the waterbusiness.
That's pretty remarkable.
Right, because so many thingsthat are bad for you, like sugar
, candy soda the best creativeand now you come along and
you're disrupting the waterbusiness.
Speaker 2 (02:25):
That's pretty remarkable right, because so
many things that are bad for you, like sugar, candy, soda or
things like you know, alcohol,beer their whole marketing
strategy is we want people toassociate our products with fun.
It'd be all about fun.
So beer's about parties andcandy's about fun and soda's
about fun, but there's no reasonthat sugar is any more fun than
(02:46):
water or something else.
So it's really just we'retrying to make water and low
calorie flavored sparkling andlow calorie iced tea just as fun
as beer.
And you're seeing that I thinkwe have a lot of people who are
like hey, I go to a party and Idon't really wanna drink.
This is way more fun to walkaround with.
Or a mom who's like, hey,finally, my nine-year-old will
(03:11):
drink water for the first timeever because he feels like he
has something he's not supposedto have and I love that.
So, yeah, I think it's reallyall about fun.
Speaker 1 (03:15):
It is, and you've created the desire to have a
badge in the water category,which I think might have been
there for a single female whowas carrying around smart water
or something, but it wasn't thenorm in this segment at all.
So kudos to you, and it took anoutsider, I think, to see that.
Can you also explain why it'scalled Liquid Death?
Speaker 2 (03:37):
I knew from my marketing days that I knew how
expensive marketing is.
So when you're a brand newcompany with no marketing budget
, no media budget or anything,your only chance at survival is
the actual product itself has tobe super shareable, buzzworthy.
Like you need people to createthe media for you for free, and
(04:00):
that's really hard to do.
Like people don't share toomany things in their feed.
Like people don't tell theirfriends about a new beverage too
often.
Like so for us, we needed tobake so much of the marketing
into the packaging and productitself because we weren't going
to be able to afford to have aokay, who cares thing and then
spend millions of dollars tobuild a campaign around it.
(04:22):
The campaign had to be theproduct.
We knew that the name had to bevery, very provocative and
memorable and funny and do thethings we wanted the marketing
to do, which is be funny, bememorable.
We needed the product and brandname itself to do that.
So then, when we thought aboutit that way, all the names
started dying off until you gotto something hey, what are we
willing to bet on?
(04:43):
If this was on the shelf,someone has to pick it up.
Then they have to be like whatis this?
And they have to take a photowith their phone.
So Liquid Death was just kindof one of the few names that I
felt.
Yeah, I would bet this issomething people have to pick up
.
Speaker 1 (04:57):
Do you think people understand that you mean death
to plastic or that doesn'treally matter?
Speaker 2 (05:02):
It doesn't really matter, because it's about you
just have to generate curiosityin people, which is really hard.
When someone sees something onthe shelf in the water aisle
that says liquid death, it'senough to shake them out of
their routine and be like wait asecond, what is this?
And if you can just get acustomer to a what is this, you
are light years ahead of 98% ofother brands.
(05:24):
That's really hard to do.
So if I can get them to a whatis this?
And they pick it up and they'relike water murder, your thirst
death to plastic.
Oh, this is cool.
I'm going to try this right.
So that's what you're reallytrying to get to.
It's like get someone toactually pick it up and then
read more about what it actuallyis.
But just getting someone topick something up is almost
impossible.
Speaker 1 (05:49):
It's really absolutely genius.
I thought it was particularlycheeky given that we were in the
middle of COVID and I wasthinking what a scary thing to
do.
I mean, I come from abackground of Wall Street where
you're so careful about anythingyou ever say or do, and there
you are boldly taking a hugerisk.
Speaker 2 (06:00):
People always talk about risk but I honestly think
for a startup with very limitedcapital, trying to do something
like the big guys is way riskier.
You will run out of capital wehave.
And I think I've always knownabout people because, being in
(06:27):
marketing so long, you're justso in deep with like culture and
psychology and how do peopleactually respond to things and
you realize people are prettysmart.
I think a lot of companies justwrite off consumers as stupid
and they kind of just create forthe lowest common denominator
where you realize people have asense of humor.
The vast majority of peopleinstantly got that liquid death
(06:49):
was funny and I always bring upthe example.
Kroger has their own brand ofice cream and the flavor is
death by chocolate and no one islike scared to eat that ice
cream, right, because peoplearen't dumb, they know it's a
joke and it makes it fun and Ithink during COVID one of the
reasons and we were kind of likea perfect brand for that- Very
(07:30):
bold and quite brilliant, andit's actually a great segue,
though, to how did you raisecapital?
The very first round of capitalthat we raised was really just a
friends and family round.
And even when I came up withthe idea for Liquid Death and I
was telling people about it,what I kind of realized was
people I knew who were smartmarketers were like this is
(07:51):
brilliant, you have to do this.
But anybody else outside ofmarketing and you don't
typically raise all your moneyfor marketing people they were
like I don't know if this isgoing to work.
You know retailers won't put iton the shelf.
So I realized I kind of had toprove out some kind of test and
because to put something in acan, you can't just do that in
your garage like making abreakfast bar.
(08:13):
You have to produce a minimumrun of like a quarter million
cans minimum to do any kind ofcan product really.
So that was going to be acouple hundred grand just to
even start.
I said okay, let's make aphotoshop render of a can that
looks real.
Let's let me just shoot thisreally cheap little commercial
(08:34):
that we literally shot for 1500bucks.
And since we didn't have realcans, I literally used a Miller
light can that had a white canand a gold lid but a girl was
pouring it out like this, so youcouldn't actually see the can,
but water was coming out.
And we made this video.
We put it on Facebook, made acouple of little funny social
posts of like what looks like areal can, and I put up a few
(08:55):
thousand dollars in paid mediabehind the video, because
Facebook won't show the video toanybody unless you put paid
behind it.
And then after about fivemonths of that, the video had
about 3 million views.
Our page on Facebook had 80,000followers, which was more than
Aquafina had on Facebook at thetime, because, like, who really
wants to follow a bottled watercompany?
And then we had hundreds ofmessages from people saying this
(09:18):
is the coolest thing ever.
Or is this real?
Where can you get this?
I had a distributor from NewYork say, we're the biggest
non-alcoholic distributor in NewYork.
Can we talk to a salesperson?
So then I use all that tractionto then have something tangible
to show to investors, tode-risk them investing.
Hey guys, look what I did with$6,000 and myself and no help
(09:41):
with the right investment team,I think this can really be
something big.
So then, yeah, I was able tokind of cobble together a five
grand check here, a 10 grandcheck here to kind of cobble
together about 150K to do thefirst minimum run of liquid
death.
And then, once we had kind ofphysical cans, I was introduced
(10:01):
to a venture capital firm calledScience which was behind Dollar
Shave Club.
Their whole thing was kind offinding disruptive brand-driven
products that were aboutdirect-to-consumer, and our plan
at first was just to bedirect-to-consumer because
retail was just too afraid ofliquid death and it was too big
of an undertaking to try to getinto retail out of the gate.
(10:22):
So we said, hey, let's juststart selling through our
website and through Amazon andjust do kind of digital social
marketing to kind of driveawareness around.
So then science came in as ourfirst sort of institutional
investor and then we startedselling the first product in
late January 2019.
Speaker 1 (10:39):
2019.
And I don't know if youdisclose how big your sales are
at retail now.
Speaker 2 (10:45):
Yeah, we're well past 300 big.
Your sales are at retail now.
Speaker 1 (10:47):
Yeah, we're well past 300 million in scan sales at
retail.
That is incredible, and youstarted with still water, just
flat water, but you've had a lotof innovation going on recently
.
Can you talk a little bit abouthow that progressed?
Speaker 2 (11:00):
Yeah, we launched with still water.
That did really well.
And then in 2020, our secondyear we launched the sparkling
version of our sort of premiummountain source Stillwater.
We had mountain sourcesparkling water, so something
that was kind of like a Perrieror Pellegrino that world.
Speaker 1 (11:17):
And what did you call it?
How did you come up with thenames?
Speaker 2 (11:19):
Our first product, which is the Stillwater.
Here it's called Mountain Waterand then it just comes in a
still version and a sparklingversion.
So it's just Liquid DeathMountain Water, still and
sparkling.
And the sparkling did reallywell out of the gate.
And the great thing that we sawwas out of the gate it was
almost purely incremental.
It had no cannibalization onthe still, because I think you
(11:43):
realize that people are kind ofeither still or sparkling people
there's not that many who areequal still or sparkling.
There's kind of one or theother.
So it was kind of total newaudience for us that that served
.
Speaker 1 (11:51):
And that in itself is so unusual that newish brand
very new really by the standardsof the industry has now found a
way to layer on a wholeincremental consumer.
I mean brands die for that tohappen.
Speaker 2 (12:03):
What we knew very early on was Liquid Death was
going to be.
More was going to be a truebrand.
And what I mean by that is Idefine brand as how do people
feel about your company beyondthe functional benefits of the
liquid, whatever that might be?
Because at the end of the day,no one can own a function or an
ingredient Exactly.
Hey, yeah, I've got this manyelectrolytes.
(12:25):
Well, someone else can havethat many and they can probably
have it cheaper and they've gotbetter distribution.
So you can't own that.
So if you start spending allyour marketing telling people
about something you can't own,you're effectively marketing for
the category and competitors.
So we always looked at it aswhat we can own that no one else
can own is our fun brand.
(12:45):
Nobody can be as funny as us.
Nobody can kind of market theway we market, so we always led
with that.
And when you're creating a truelifestyle brand which I think
is a word thrown around toolightly like just because you
use an athlete to market doesn'tmake you a lifestyle brand,
exactly you use an athlete tomarket doesn't make you a
(13:06):
lifestyle brand.
Exactly your point.
I think lifestyle means truebadge value, which most people
can more easily understand thatin the fashion space, where you
know that, hey, this thousanddollar pair of shoes is just as
functional as the $50 pair ofshoes.
But there's an emotional reasonand badge value and all that of
why people pay more and everyoneunderstands that in fashion.
(13:28):
But no one really understandsthat in CPG, I think, or
especially food and beverage.
But it's a real thing, like ifyou look at data and psychology,
the reason people walk aroundwith certain beverages or
packages.
It is emotional and not so muchfunctional.
So we kind of knew that, hey,if people were gonna love Liquid
Death for the brand and thelifestyle, they would probably
(13:50):
be open to a variety ofdifferent kinds of liquids that
the brand was wrapped around,right.
So when it was Stillwater, youhad all these people that
thought the brand was awesomebut they might be like, yeah,
but I'm not really a plainStillwater drinker, so I'm not
gonna.
Yeah, but I'm not really aplain still water drinker, so
I'm not going to buy it, butit's a cool brand.
Speaker 1 (14:05):
Oh, now they make sparkling.
Speaker 2 (14:07):
Now I can participate in the brand and this is cool.
And then we have more peoplesaying, hey, when are you guys
going to come out with flavors?
I don't really drink unflavoredwater too often.
So then in 2022, we launchedflavored sparkling.
It had just a little bit ofsugar and more flavor than kind
of the typical category leaderlike LaCroix had, and then, sure
thing, almost all incrementaland you had people saying
(14:28):
finally, now I can participatein Liquid Death because I like
flavored water and I don't likeunflavored water.
We kind of knew from thebeginning that the brand had
more legs as a true lifestylebrand and it wasn't just about
one functional beverage category.
Speaker 1 (14:42):
So since that you've also launched into teas and most
recently into some soda flavors.
So will you talk a little bitabout those?
Speaker 2 (14:50):
So we launched iced tea in 2023, and that was even
more successful out of the gatefor us than flavored sparkling.
And you know, within a coupleof months I think we were like
the number two or number onebestseller iced tea on Amazon,
with very limited marketing.
We didn't do a ton.
We made one video when welaunched it and that was kind of
it.
And then, literally like amonth ago, we launched new
(15:14):
flavors of our flavoredsparkling, but inspired by more
traditional soda flavors likeCola, dr Death and like Root
Beer Wrath.
And what we found is thatthere's tons of data that people
are trying to drink less sugarysoda.
People are not drinking thatmuch diet soda because people
feel like some of the stuff indiet soda most diet soda is not
(15:34):
good either.
But and people are going to theflavored sparkling category as
a soda replacement.
But the category is so blandthat most people are like I, I
try, but it's so bland it's notreally a legitimate replacement
for me.
So we said, hey, I think there'san opportunity to use a little
bit of sugar, little bit of likea natural sweetener, and create
(15:57):
our sort of place within theflavored sparkling category as a
true soda replacement.
Now, it's not as sweet as soda.
It's probably about half assweet as soda, but it's got the
10 calories, two grams of sugar,and tastes significantly closer
to soda than anything else inthe category.
And we even found that some ofour most successful flavors
(16:18):
within flavored sparkling wereones that kind of had a clear
soda analog, where it's likeorange lime, cherry, like things
that were classic soda.
Those were the flavors withinour flavored sparkling that were
selling best and I think so.
You know, we kind of said, hey,let's just sort of reposition
in a way our flavored sparklingcategory where we can kind of
(16:39):
have our own space within it,and that's how we've sort of
launched it this year.
Speaker 1 (16:43):
When I first came to this country from South Africa,
I was appalled and amazed at thesize of the portions, the
sweetness of the candy, thesweetness of the drinks, and how
much everybody had ofeverything and how cheap it was,
and I then unfortunatelylearned to eat everything on my
plate.
But I have noticed a tippingpoint where there are enough
people now trying to get offsugar, trying to lose weight.
(17:06):
Obviously, the ozempic typedrugs are really accelerating
that trend.
We now have someone in chargeof our health and human services
who is very conscious about howhe wants children to be fed in
schools and so on, and so itreally feels to me like a
serious tipping point in theworld of soda, and you're seeing
Walmart building alternativesoda category displays.
(17:30):
So I really do feel like you'vehit something, and I'm just
wondering how the big guys aregoing to respond.
Coke and Pepsi are launchinginto the prebiotic soda business
, which has been dominated byOlipop and Poppy, but do you
feel anyone else is doing whatyou're trying to do without
claiming to have other healthbenefits?
Speaker 2 (17:49):
Not too many, not too many that I've seen and again
I'm sure they will come.
Just like when we launched oneof the first brand driven still
waters in a can, we were theonly one.
Now, if you go look at theshelf, there's 10 brands that
now put water in aluminum.
And when we originally weremarketing for the first still
water in a can, which was this,you know, I had everybody
(18:17):
telling me hey, you need to tellpeople that cans are infinitely
recyclable and make all yourmarketing about cans.
And I said, yeah, but if I dothat, the minute there's another
can water, I'm marketing forthem too.
So we always led with the brandfirst.
So make people want to badgethis.
And then the secondary messageis death to plastic, infinitely
recyclable, which allows peopleto justify the vanity purchase.
(18:39):
Right, if someone buys liquid.
Death if you really did a truepsychology experiment on them.
It's because they either want tolook cool, they want someone to
talk to them, because when youcarry around a liquid death,
someone will talk to you.
A stranger will say what isthat?
Or, oh my God, liquid death,Like I love that, Like it
creates conversations.
But if you ask someone, why didyou buy this?
Nobody will say because I wantto look cool, they say, oh no,
(19:02):
look, because it's not a plasticbottle, right.
Same thing Tesla.
People don't drive Teslasbecause they care about the
environment so much.
It's a cool, badge value car.
But then they justify thepurchase with but it's better
for the environment.
Like.
That element is what gets therepeat.
It gives people a reason tosupport the brand in their own
sort of psyche of why they feelthat this is something good.
(19:23):
So same thing with like.
If we have success with oursort of flavored sparkling play,
yes, others will come, butwe're winning with the brand
first.
Not simply because of the taste, because you can replicate
taste anywhere easily.
Speaker 1 (19:37):
You've said something so critical that winning on
ingredients is just notsustainable because other people
can come in and do that.
And the power of brands ismagnificent when they're working
.
One example is Coke, which hasa lot of things going against it
perhaps, and it's tens ofbillions in scale, and they are
growing in carbonated softdrinks, they're growing volume
(19:59):
and they're growing pricing.
It really is a lesson in howpowerful marketing is and the
power of brands, and you reallyget that.
That's what differentiatesLiquid Death.
Speaker 2 (20:10):
Yeah, and if I remember reading recently, most
of the growth is coming fromCoke Zero and the better for you
side of carbonated soft drinks.
Speaker 1 (20:18):
Right, but the fact that this brand is so old, the
name.
Coke, and there are many brandslike yours that have been born
in the last decade, but Coke hasmanaged to stay cool and
relevant.
Speaker 2 (20:30):
If you look at the actual marketing and shelf data,
there's a direct correlationbetween market share, velocity
and physical space.
The more physical space a brandhas, it is completely mapped to
what its market share is and towhat its velocity is.
Because I think you look atsome of the data and for any
(20:51):
given category, customers arenot loyal to one brand or
product or price point within acategory.
People who buy the cheapestbrand in the category 30 plus
percent of those people also buythe most expensive thing in
that category sometimes, andvice versa of those people also
buy the most expensive thing inthat category sometimes.
And vice versa.
The people who buy the mostexpensive thing 50% of them
sometimes buy the leastexpensive thing.
(21:12):
So I think brands have to getout of their head that, oh, I'm
going to have this loyalcustomer that only drinks this
and they're this specific kindof person.
The reality is people aredrinking all kinds of things and
whatever is physically in frontof them in a store.
When they're making atwo-second decision and they're
trying to get in and out,they're going to grab what that
is Like.
(21:32):
The few people will take timesearching for something when
they're making a purchasedecision.
Very few of the like hardcorefans do that, but that's very
small.
That's why I think it's thetricky thing as a new brand when
you've got the Coke or Pepsisof the world that own the
physical space.
But what I think is the greatequalizer is something like
Amazon, because Amazon takes thephysical space barrier out of
(21:55):
the equation.
It's purely about consumerdemand for the most part there.
So yeah, that's definitely oneof the tough parts about being
in brick and mortar, because ifyou don't have the physical
space, it's just not possiblefor you to gain a certain amount
of market share, a certainamount of velocity.
Speaker 1 (22:11):
So how did you first get into retail and who were
your most supportive retailersand what was it that you used to
sell to them?
About the opportunity and teachthem about what was possible.
It must have been really,really difficult.
Speaker 2 (22:24):
Yeah, it was tough.
It's almost like when you raisemoney from investors.
Essentially what you're tryingto do is de-risk the offer.
I mean, that's what you'retrying to do.
So at a certain point onceLiquid Death was doing a few
million in sales on Amazon alone.
That's finally when someonelike Whole Foods was our first
major retailer.
That took us on surprisingly.
(22:45):
Now at least you could come tothe table with something hey,
we're doing a couple million onAmazon and we have to charge.
At that time we had to charge 20bucks a 12 pack in order to
make money.
So then if you're going to WholeFoods because you're not
shipping it anymore you're notshipping a 12 pound case of
water to somebody it's like, ohwow, now we can sell it to Whole
Foods for a good margin, andnow Whole Foods can sell it for
(23:08):
$14.99.
So we can say, hey, whole Foods, we have millions in sales
paying 20 bucks.
What do you think is going tohappen when we tell all those
people, hey, now you can get itat Whole Foods for $14.99.
So you were able to make areally compelling case that
(23:29):
there was not a lot of risk forthem in doing this.
And that's kind of what we'vehad to do every step of the way
with every retailer is show themhow well the brand was doing in
other channels where we exist,and that they may be missing out
by not having this brand hereand that they're just going to
go, whether it's to yourcompetitor or to Amazon, if you
don't have it.
And that's kind of how we'vehad to build out retail and
that's on the distribution side.
Speaker 1 (23:49):
I'm also interested in your household penetration.
Speaker 2 (23:52):
When it comes to distribution, we're primarily
DSD through the beer network.
Speaker 1 (23:58):
So that's direct store delivery through a
bottling network.
Who do you use for that?
Speaker 2 (24:02):
Primarily Anheuser-Busch, which really I
don't know how many otheroptions new brands have for DSD,
because you can't go into Cokeor Pepsi unless they own you.
But because of the alcohol lawsin the US, these beer
distributors are independentlyowned and they can make their
own decisions of which brandsthey distribute.
Now you have to go one by oneto all these guys and there's
(24:22):
literally hundreds of them andit's hard to get them to want to
take on new brands.
But over time, as you do morevolume and you get more retail
awards, you can sign thosedistributors.
But then we also use some of theUNFI direct stuff for folks
like Whole Foods where theyrequire you to do that, but we
try to remain DSD for as manyaccounts as possible.
Speaker 1 (24:42):
I just want to go back to branding and the way you
come up with your names.
Do you ever worry you're goingto run out of brilliant ideas,
because every single name makesme laugh?
That's hard.
It's like being a stand-upcomedian and having to have new
material all the time.
What's the process and how doyou make sure you stay funny?
Speaker 2 (25:00):
We're not doing a completely different playbook
from what Red Bull was verysuccessful at, which was, hey,
you blur the lines between anentertainment company and a
beverage company.
And Red Bull's entertainmentwas action sports, which was,
hey, you blur the lines betweenan entertainment company and a
beverage company, and Red Bull'sentertainment was action sports
.
So dirt bikes and snowboardsand stunts, those don't feel
like Red Bull commercials, eventhough they are, but it's
(25:22):
legitimate entertainment thatpeople would seek out on their
own to watch and it's notterribly expensive to create.
We're doing the same thing, butrather than action sports, our
thing is comedy.
We've built our marketing teammore like a Saturday Night Live
writer's room.
Like we don't really havetraditional marketing
copywriters, like we do havestandup comedians and people
(25:44):
that wrote for TV shows andthings like that.
Because, to your point, youneed that level of comedic
talent that you're not gonna getfrom like traditional marketing
people, right.
Because to your point, you needthat level of comedic talent
that you're not going to getfrom like traditional marketing
people, right.
And then we sort of signcomedians the way Red Bull signs
athletes.
Like we've got folks like BurtKreischer, tom Segura, bill Burr
, whitney Cummings who have allsort of invested in the brand
(26:06):
because they believe in a brand.
That's all about comedy, andthen you know they help support
the brand.
We can bounce ideas off themsometimes.
So yeah, it's just like sort ofbuilding a comedy driven
ecosystem is how we're able tokind of continually have even
more firepower for the outputthat we have.
Speaker 1 (26:23):
I just love it.
It's really genius.
I can't think of another brandthat's doing that, even in a
different category, can you?
Speaker 2 (26:29):
not really.
I think to your point,especially big companies.
Like humor is really hard andbig companies are typically
really bad at it, because comedydoesn't really work through a
old system and I think what endsup happening is everybody is so
risk averse and no one reallyknows what to do, so it just
(26:50):
gets watered down into thisthing that's not really funny
and then that's the thing thatgets signed off on.
So for us, the great thingabout comedy I think there was a
stat.
It was like 90% of these largecompanies that were interviewed
felt they don't have theresources to deliver humor in
their advertising.
So it's something that a lot ofcompanies struggle with and are
(27:11):
afraid of, and it's our biggeststrength.
Again, why we feel our moat iswhat it is is that what we're
doing is really hard for a lotof companies to do effectively,
but we built our company fromday one with that in mind.
Speaker 1 (27:24):
Yeah, so it's really authentic to you.
You're not like hiring acomedian to sell your product.
It's totally your DNA.
I also want to ask about yourpartnerships.
It's not intuitive that a waterbrand is going to be partnering
with a makeup brand or a soapbrand, an ice cream brand.
Can you just talk about how youstart thinking about these
(27:45):
ideas?
How does this bubble up?
Speaker 2 (27:47):
Again, like when you think about our goal to be funny
and entertaining.
But one of the best ways tomake people laugh is to do
something unexpected.
They actually.
There's an old adage aboutcomedy Comedy is entering
through the door and leavingthrough the wall being
unexpected.
So that's why I think theseunexpected partnerships like
(28:07):
Liquid Death and Elf CosmeticsJust saying it is funny, it is,
it's very funny, really funnyvideo and all that.
So I think one it's like we findthese partnerships where,
because we have such a trackrecord of delivering super
shareable, funny, viral content,we have brands that come to us
now, like Elf, like Amazon, whosay hey, we want you to help
(28:33):
come up with a cool marketingidea that we can be a part of,
because we want some of that,and for us we get exposure to
their audience, which may be anew customer for us, and
oftentimes they're paying us forthat.
So it can be very, very lowcost for us to release something
like that and we find the rightway to get our brand in there
and their brand in there.
(28:53):
And it's kind of a win-winbecause for them, even though
they're paying, it's thecheapest thing they've probably
done all year with the highestreturn and for us it costs us
nothing sometimes and we stillget a bunch of awareness and all
of that.
So it's been a nice system thatwe have right now.
And now it's almost like theinbound that we're getting from
brands is so heavy now that nowwe have to kind of like, okay,
(29:13):
hold on, let's be selective withwho we work with and why we
work with them and can we getthe best creative product out of
them, because not every brandis the right brand to partner
with Liquid Death.
We've seen things where it'slike, hey, here's the thing we
wanna do, and they're like, ohno, we can't do that.
Ok, no problem, you're just notthe right brand.
Like, we don't need to do thesethings.
So it's more like hey, if youwant to be on the Liquid Death
(29:35):
Show and you like the LiquidDeath Show, yeah, let's talk,
but it's not for everybody.
Speaker 1 (29:40):
Which leads me to your hilarious Super Bowl
commercial.
Can you talk to me about howthat came about and then what
the response has been?
Speaker 2 (29:47):
Super Bowl is obviously a big marketing spend
for a small brand.
But I've always said I thinkSuper Bowl is one of the most
efficient marketing spends youcan do because it reaches over
100 million unique people and itis the one time a year where
people actually want to watchthe commercials.
No other big TV event, even theNFC championship game, has
(30:10):
nearly as many people as theSuper Bowl.
But people don't go into thatsaying, oh, I can't wait for the
commercial, but they do for theSuper Bowl.
So to reach that many peoplewhen they're actually paying
attention, I mean you'd have tospend multiple times that to
have the same effect outside ofthe Super Bowl.
So I do think it's an efficientspend.
But when you're a small brand itbecomes a much larger bet
within your marketing budget forthe year.
(30:31):
So for a brand like us we needthat Super Bowl spot to work
really hard for us.
So we have to thread a lot ofneedles.
One Fox or whatever big networkis running the Super Bowl and
the NFL they have to approve allthe commercials and they are
very, very strict with what youcan say and not say and how sort
of provocative anything can be.
(30:52):
So that's a-.
Speaker 1 (30:53):
Mike, that makes me want to see what was on the
cutting floor before you got itpast there.
Speaker 2 (30:59):
So, yeah, so we have to thread that needle.
Then we also have to thread theneedle of okay, well, it's got
to be, it's got to feel likeliquid death, it's got to have
some of our spirit and humor init, but then also it's got to do
a lot of work to helpstrategically of what we're
trying to do, which is, you know, there's a lot of people who
have heard of Liquid Death.
We're somewhere like north of40% aided brand awareness just
(31:24):
for the name Liquid Death.
But you look within that, ofthose 40% who have heard the
name Liquid Death, way less knowthat it's water or flavored
sparkling or iced tea.
They're like, oh, I've heard ofliquid death, I thought it was
a beer or I thought it was anenergy drink, because the way
the product looks what makes itfun?
It looks like stuff that it'snot.
So so much of our focus isgetting more and more people to
(31:45):
know what it actually is that wesell, so that when they see it
in the store it's not oh,there's Liquid Death.
I don't need any beer today, soI'm going to keep walking that
it's, hey, liquid Death.
That's that water I heard about.
Or that's that iced tea I heardabout, which will get a lot
more conversion and newcustomers when they know what it
is.
So we wanted to lean in with theSuper Bowl spot.
The number one thing thatpeople mistake us for, which is
(32:08):
almost intentional on our part,is beer.
People love that.
It looks like beer.
They can walk around a partyKids drink it because it looks
like something they're notsupposed to have.
But we need to do someeducation.
So we said, hey, let'sbasically make a parody of an
old, like early 90s, beercommercial, but have all these
people drinking what looks likebeer in jobs where you should
(32:28):
never, ever be drinking beer andthen at the end you pay it off
with don't be scared, it's justwater and iced tea.
That concept was able to threadall those needles we kind of
had to thread, for, you know,super Bowl.
Speaker 1 (32:40):
And what sort of response have you had?
Speaker 2 (32:42):
Awesome response.
I mean, you know there'sobviously after Super Bowl you
have all these differentmarketing reporters saying what
they think their favorite, bestand worst ads were for the Super
Bowl.
But there's one organizationcalled EDO that actually uses
engagement data to measure whichads in the Super Bowl were the
most effective.
So right after these ads ran,they're measuring how many
(33:05):
Google searches were there, howmany website visits were there
all the things that you cantrack digitally after an ad airs
to see how effective was it atgetting someone to take an
action.
Liquid Death was the numberthree most effective ad in the
Super Bowl by their data and itmade us the number one most
effective beverage by a longshot in the Super Bowl.
(33:26):
So we think it did exactly whatwe wanted it to do.
Speaker 1 (33:30):
And advertising generally takes a year or more
to pay back.
But do you expect to actuallysee a lift to your sales sooner?
I mean, are there things youcan do with that ad on social
that can amplify?
I mean, I know there are, soI'm just wondering what you
expect.
Speaker 2 (33:47):
Oh yeah, we have a very sophisticated media
strategy.
Expect oh yeah, we have a verysophisticated media strategy and
we actually we brought on lastfall our first chief media
officer because I think media isso critical and being
sophisticated and efficient withhow you deploy it with all the
new technologies that areavailable.
So, everything from when we runthat Super Bowl spot, all the
(34:07):
people that go to the websitewho agree to sort of cookies, we
can now target other ads tothem to try to convert them into
purchases through Amazon or todrive them to retail.
Or, you know, on connected TV,you can actually get, you know,
kroger data and target peoplewho are sparkling water
customers on connected TV toshow them a sparkling water ad.
(34:30):
And maybe you can even know,hey, someone who visited our
website after the Super Bowl,who saw the spot, they're
watching this.
So the Super Bowl it's notpurely about oh, right, after
this, how much do sales go up.
Part of it also is when you gointo those retailers in the fall
and you're trying to get shelfspace.
They want to see that you'remaking a real investment for
(34:52):
them to give you the space.
So when you can tell them, hey,look, we're running a Super
Bowl commercial.
We're doing all of this mediato try to drive customers
directly to your stores off theheels of that.
That makes them feel likeyou're de-risking them, giving
you the space, and without someof those investments you might
not even get that space to beginwith.
(35:13):
So there's a lot that goes intowhy you know, you make these
sort of media investments andhow you deploy them.
Speaker 1 (35:20):
And do you do billboards?
Do you do print Like?
What other forms do you likebest for media?
Speaker 2 (35:27):
Media is really just about finding the most efficient
way to get your message infront of the eyeballs that you
need, and earned media is alwaysat the top of our strategy,
which is why pay for eyeballswhen you can create things where
people are spreading it toother people for you for free.
Now you have to be legitimatelyentertaining to do that, but
(35:49):
that's in our DNA how we do that.
So when we do things like aviral video that we maybe spend
$60,000 to produce and shoot, itgets 15 million views and
generates $6 million in earnedmedia off of a $60,000
investment.
So that's always at the top ofhow we think about media getting
(36:09):
people to spread it, gettingpress to write about it,
generating its own media.
But then we just look at yeah,look, billboards are great, but
if you look at what is the costper eyeball, you're paying for
that billboard.
Speaker 1 (36:21):
It's really high and then if you're in the freeway in
traffic.
Speaker 2 (36:24):
Look at the car on either side of you.
People are.
They're not supposed to be ontheir phones, but they're on
their phones in their cars.
They're not looking up at thebillboards like they used to.
Sure you could run a billboard.
It might be effective, butyou're paying a big premium for
that and you have to analyze isit worth the premium?
I can spend one 50th of thatcost to target that same eyeball
(36:45):
on their phone and then youhave to make the case.
Is them reading you won'tbelieve it's not soda on their
phone?
Does that have a hugelydifferent impact than when they
read you won't believe it's notsoda on a billboard?
Maybe there's some right, butis it worth 50x more?
Maybe not right.
So it's all about this analysis, where I steal this from my old
boss.
Gary Vaynerchuk, where he's likeyeah, you're in the business of
(37:07):
day trading attention, You'rein the business of day trading
attention.
Where is the cheapest way toget the most ROI on your spend
from an attention standpoint?
Speaker 1 (37:15):
So what are your goals for Liquid Death going
forward?
You're over 300 million inretail sales already.
What?
Speaker 2 (37:23):
does the future look like?
Our goal is to be amulti-category, healthy beverage
platform.
We've already proven we're atrue multi-category brand.
Beyond.
You know, we're winning inStillwater, I believe, as of
last week on Amazon.
Our Mountain Water passed Fijiin market share on Amazon for
the first time last week.
(37:44):
But this is before Super Bowl.
We don't even have the postSuper Bowl data yet, this is
before Super Bowl.
So we're proving we're winningin Stillwater.
We're winning in FlavoredSparkling.
We're now the number one icedtea on Amazon in dollars.
We passed Pure Leaf in January.
I think Liquid Death can go intoother categories in the future.
We're not in any rush to jumpinto new categories.
We've got three pretty massivecategories with pretty massive
(38:07):
TAM that we can still keepgrowing.
But, yeah, we want to be a truemulti-category brand.
Exist in multiple places in thestore water section, in the
flavored sparkling section, inthe tea section.
What other sections can we endup in the store?
And then, yeah, I mean I thinkthere's a possibility for us to
be a multi-billion dollarbeverage company and to do it in
(38:31):
a way where we don't have to bethe number one brand in every
category, right, like we can bea top 10, top five brand across
four categories and be a massivebusiness, whereas a lot of
other brands where, if they'reonly in one category and they're
not good at extending intoother categories, they're
fighting for limited shelf onlyin one category and they're not
good at extending into othercategories they're fighting for
(38:53):
limited shelf space in onecategory and it's a lot harder
to get meaningful shelf spacelike that in one category unless
you're like the category leaderor the number two or number one
.
So that's kind of how we thinkabout it.
Speaker 1 (39:07):
In order to go from being little to even 300 million
and then taking a next step toget even bigger from there, you
need an incredible team aroundyou.
I think we often see what getsyou from A to B is not
necessarily what's going to getyou from A to F.
Wrong letter, not F, but A totriple.
Speaker 2 (39:26):
A.
Speaker 1 (39:26):
The process of growing up as a company is
really painful.
It's like being a toddler andthen a teenager, and you really
have to work hard to put theteam in place.
That's going to be the teamthat can win long term, so I'd
love to know who some of yourlieutenants are and how that
works.
Speaker 2 (39:44):
Yeah, no, you're absolutely right.
I think as you grow a companyfrom zero, the bigger you get,
the more options you have.
In the early days you don'thave many options.
How many people want to cometake a risk to run sales for a
company that's got a couplehundred thousand in sales right
Like you're going to be limitedon who's willing to do that.
So you kind of got to go withwho is excited, which may be a
(40:05):
very limited pool.
Work with those people.
Then hopefully some of thosepeople they're able to grow with
the role and stay.
Other times the company is adifferent company Every nine
months or 12 months as you growand scale and the scopes of
certain roles dramaticallychange every year and not
everybody like.
Sometimes the roles outgrowpeople.
But as you get bigger and moreproven you've got more interest
(40:26):
for strong talent that iswilling to maybe leave other big
companies to come work atsomewhere like Liquid Death, and
I think we now have a reallystrong executive team in place
with our chief retail officer,mike Fine, who came to us last
year from.
He was there at Body Armor andCoke like big companies with big
revenue that know the game thatwe need to play to get to that
(40:49):
next tier of whether that's abillion in sales or whatever you
want to frame it.
We brought in our new CFO lastyear who was the CFO of Beam
Suntory North America, kareemSadika.
You know, again, kareem isincredible but we probably
couldn't have gotten Kareem twoyears ago right, you kind of got
to be at the right level wherehe's excited to join and seize
the potential.
And then we've got folks likeMarissa Bertha, who is our chief
(41:12):
strategy officer, been with usfor a few years now.
She worked on the executiveside at 7-Eleven and was there
in the early days of LiquidDeath when 7-Eleven made a
venture investment into LiquidDeath in our early days and she
helped lead that and gotfamiliar with our brand and
eventually wanted to come overto our side.
We have a really strong team inplace with diverse backgrounds
that are really they've managedbusinesses that are a billion,
(41:36):
two billion, and they kind ofknow what excellence looks like
at those levels and, you know,helping us sort of start getting
into that next level of growthand process and the growing up
of a business.
Speaker 1 (41:47):
I'm lucky enough to have got to know Marissa she's
fantastic and also Kareem alittle more recently, and
they're real pros and veryanalytical, very data-driven,
very impressive.
It's just great to see that andthe opportunities that presents
, like, for example, I noticedyou're drinking a smaller can
than I've seen.
Speaker 2 (42:06):
Yeah, this is big for us this year.
So all of our grocery productthat's in cases, multi-packs is
going to 12-ounce cans this yearBecause we've been in these big
19-ounce cans that you'reholding and that was because we
didn't have much scale.
We could really only make senseof being in one can size.
So it's one can size for singleserve, grab and go, then the
(42:30):
same can in a multi-pack.
But what we realized when wereally dug into a lot of
research and work is that peopledon't really want to drink
giant cans on their couch athome for the home occasion.
The smaller 12 ounce cans arewhat people prefer for that take
home occasion which you kind ofsee in all the categories,
whether it's flavored, sparkling, iced tea, like smaller is for
(42:51):
the home occasion and that alsoenables us.
This year we're selling those12 ounce cans in six packs,
which get us down to like a 6.99to 8.99 price point, depending
on whether it's water orsparkling or tea, and getting
below that $10 price point inmass grocery is a huge unlock.
(43:12):
Almost all non-ALF brands otherthan Energy in their
multi-packs are in a sub $10price point where, even though
we've been growing like crazy,we were selling 19-ounce cans in
an eight-pack for anywhere from$14 to $16, which was almost
double the cost of anycompetitor sitting next to us on
(43:32):
the shelf.
So we're excited that this year,kind of moving into that
sub-$10 price point, it's goingto really level the playing
field, accelerate householdpenetration because it's a lot
less expensive to try the brand,whereas if you've never tried
Liquid Death, if you're going tospend $15, it's a little bit of
a stretch for some folks soexcited about that.
Speaker 1 (43:52):
It's been fascinating as a beverage analyst and I
covered Coke and Pepsi for goshwell over 20 years, probably
closer to 30.
And just looking at that, theycall it the price, package,
architecture, but also the pointof sale.
So being able to create thatgrid of which package for which
customer, for which actualconsumer, and there is so much
(44:15):
growth to be had by having theright thing at the right place
at the right time.
And so it often doesn't requireanother flavor, it's just let's
get the packaging right.
Speaker 2 (44:25):
Completely.
I think price and pack, as I'velearned, you know, more in
beverage is so critical, Like wenever had a packaging hierarchy
, it was just nope.
There's one and I think now,finally that you know we have
enough scale where you canproduce multiple packs
efficiently, it made sense to doa proper pricing and pack
architecture.
And yeah, we're still gonnahave the 19 ounce cans for the
(44:47):
cold grab and go single serve.
That works great in conveniencestores and sometimes I think,
for entrepreneurs.
Disruption is important.
But some things maybe don'tneed to be disrupted, like look
at the beer industry.
Any case of beer you buy in thegrocery store is a 12 ounce can
and any single beer can is abig 24 ounce tall boy.
Like they've spent decadesfiguring out.
(45:09):
That's the right thing.
You might.
That might not need to bereinvented.
So sometimes it's good to takea cue from certain things or
certain size and prices for areason and you know, take that
in mind as you're thinking abouthow you fit into that and you
can be disruptive elsewhere with, like, the brand, the marketing
, the product itself, the liquid.
But sometimes some of thesepricing and pack architectures
(45:32):
are already sort of created forthe categories.
Speaker 1 (45:35):
Just in terms of international exposure and plans
and also production.
Can you just talk about thehistory there and what your
goals are longer term?
Speaker 2 (45:44):
Yeah.
So we originally had to produceour still water in cans in
Austria because back in 2018,there was not a single co-packer
in North America who could putmountain spring water into cans.
It didn't exist.
So I found a co-packer inAustria because I had to start
(46:04):
looking outside the US, and theyhappened to be able to do it
because they owned their ownmountain spring water source,
but they also had big canningcapabilities because they made
energy drinks as well as bottledwater there.
So they said, oh yeah, we cantotally can water for you.
So at that time, when youreally looked at the cost of
cans and shipping it to the US,it actually wasn't that bad.
(46:25):
In fact, at that time it wasmaybe the same price, if not
less, to actually produce here,because there was a can shortage
in the US around 2021-ish andit was really hard to get cans
in the US.
So luckily, we didn't have thatproblem producing in Austria
Once COVID hit and then in 2021,ocean freight, as most people
(46:46):
know, 4x'd almost overnight.
So all of a sudden, our cost toship the product to the US went
absolutely through the roof andthat hung around for almost two
years.
So after about a year of thatwe said, hey, it's time We've
got enough scale, let's bringall of our supply chain to the
US domestically.
So basically over the next yearand a half we sort of got US
(47:10):
co-packers for our mountainwater SKUs and then also for our
flavored sparkling and our icedtea and it's really, as of it
was early last summer, we werefully transitioned to the US.
So we stopped working with ourAustrian co-packer late last
year and as we think aboutinternational now, we don't have
any plans to really pursue thatin the next couple of years
(47:32):
because we have this US supplychain and now it's just not
efficient to try to be shippingproduct from the US over oceans
to these other places.
Speaker 1 (47:39):
When you think about margin, Is that what you were
doing in the UK?
Because there was some news onthe UK recently.
Speaker 2 (47:46):
Yeah, I mean, if you look at just for a test launch
that we did in the UK, we hadalmost no marketing investment.
We did over 2 million in retailsales the first year in the UK,
which I think the stat I heardwas 98% of new brands there that
launched with almost noawareness, which we had no
awareness in the UK.
It was 1% brand awareness whenwe launched that.
(48:07):
98% of them don't even hit 1million in sales.
So for us I think it was apretty decent test.
But the reality was once lastsummer came along and we
realized, hey, the economics ofhaving to start shipping product
from the US to the UK insteadof Austria are just not going to
make sense.
So let's just pause on that fornow, really focus on the US and
(48:28):
growing the US, and then we cankind of come back to
international once we have a bitmore scale and can kind of make
the margins work for us there.
Speaker 1 (48:37):
Yeah, that makes a lot of sense.
Well, mike, you've beenincredible.
I've loved having thediscussion around marketing
because I think something yousaid is just so true to repeat
it again that it's very hard tostay ahead of the game based on
product attribute and the valueof a brand, just as we see in
(48:57):
fashion, is where the magic is.
So, being able to keep thatbrand healthy, alive, fed, and I
think you've really carved aunique space in humor and in
authenticity.
It's super exciting to watch.
It really, really is.
So I really appreciate yourtime.
Any thoughts you want to leaveus with?
I know that a lot ofentrepreneurs are probably going
(49:17):
to have watched this, as wellas investors, and I don't think
there's an easy way to invest inLiquid Death because it's
private right now.
But any thoughts you have,please go ahead.
Speaker 2 (49:28):
For me beverage, even though I had no experience in
beverage.
What I did have experience inwas marketing and brand.
And I think for mostentrepreneurs, if you're going
gonna start something, the keyingredient for winning has to be
something that you know betterthan most other people.
Because I knew in most beveragethe winners are determined by
brand, to your point.
They're not determined byingredients, they're not
(49:51):
determined by flavor profile,they're determined by brand.
So the fact in beverage thatbrand is so critical and that
was my strong suit it made sensefor me to kind of pursue that.
But I think some folks theymight go into entrepreneurial
things purely because they seean economic opportunity, but
they're not the person that'sgot the expertise for what's
(50:11):
really required to win in thatspace.
So that's what I would say.
Speaker 1 (50:15):
And there's also the staying power you need.
You just have to keep thatbelief going, because I know
that the journey is long andhard, the fundraising can be
torturous, and so I think someof it is just having that
staying power to be willing togo all out with it, right yeah?
Speaker 2 (50:30):
you have to.
The more you love something andthe more you care about
something more than the averageperson, the more you're willing
to go through that.
If you don't really care orlove it that much, it's hard to
go through hard things.
But if you really love it andyou really care, it's a lot
easier, I think, to get throughthe tough stuff.
Speaker 1 (50:47):
Well, Mike, thank you so much for your time.
I can't wait to do this againin a year and see just what's
happened.
Speaker 2 (50:53):
Yeah, I would love to .
Speaker 1 (50:54):
I'm sure it's going to be great.
Thanks again.
Hello friends, old and new, and welcome to Drinks
with Caroline.
I'm so happy you've joined mefor what I believe will be
another stimulating conversationwith an industry expert,
founder or otherwise fabulousperson in the consumer industry.
Mike Cessario, welcome toDrinks with Caroline, I am so
(00:24):
excited to have you.
I have just cracked my liquiddeath dead billionaire tea,
lemonade, agave with vitaminsdrink and I'm super excited.
And if I drink the whole thing,I'm not going to last the whole
podcast because I'll have to runto the bathroom but, it looks
really delicious, so I'm reallygrateful that you agreed to join
us, because you have got one ofthe best founder stories ever.
(00:46):
I'm hoping you'll start withtelling us just how you came to
be the beverage guy yeah, thanksfor uh, having me on thinking
of me.
Speaker 2 (00:55):
I mean, my sort of journey was I was in advertising
on the creative side for abouta decade, working for big
agencies and working on allkinds of brands, from Volkswagen
to Domino's Pizza to Netflixand things like that and I
started getting frustrated thatthe big companies weren't really
marketing for the year that welive in.
(01:17):
They were still living in thepast of what marketing was in
the 90s, before social media andwhere people's attention was
not solely on their phones andall that.
So kind of wanted to start myown product where I could
control the way it was brandedand marketed in the way that I
think modern brands should brandand market.
(01:37):
And yeah, I wanted to dosomething in the healthy space
because what I had seen in mymarketing background is all the
funniest, most irreverentmarketing.
That's the most memorable, isall for stuff that's terrible
for you, like it's beer, candy,junk food, fast food, like
that's all the funny marketing,whereas healthy things were
(01:58):
never marketed in a fun way andit made no sense.
Why made no sense?
Why?
So Liquid Death was you know mywant to make a healthy product.
That's even funnier than theunhealthy stuff that people were
used to seeing for a long time.
Speaker 1 (02:13):
You make such a good point because, yes, it's like to
sell dare we say it a cigaretteor alcohol.
They've often had the bestcreative, and now you come along
and you're disrupting the waterbusiness.
That's pretty remarkable.
Right, because so many thingsthat are bad for you, like sugar
, candy soda the best creativeand now you come along and
you're disrupting the waterbusiness.
Speaker 2 (02:25):
That's pretty remarkable right, because so
many things that are bad for you, like sugar, candy, soda or
things like you know, alcohol,beer their whole marketing
strategy is we want people toassociate our products with fun.
It'd be all about fun.
So beer's about parties andcandy's about fun and soda's
about fun, but there's no reasonthat sugar is any more fun than
(02:46):
water or something else.
So it's really just we'retrying to make water and low
calorie flavored sparkling andlow calorie iced tea just as fun
as beer.
And you're seeing that I thinkwe have a lot of people who are
like hey, I go to a party and Idon't really wanna drink.
This is way more fun to walkaround with.
Or a mom who's like, hey,finally, my nine-year-old will
(03:11):
drink water for the first timeever because he feels like he
has something he's not supposedto have and I love that.
So, yeah, I think it's reallyall about fun.
Speaker 1 (03:15):
It is, and you've created the desire to have a
badge in the water category,which I think might have been
there for a single female whowas carrying around smart water
or something, but it wasn't thenorm in this segment at all.
So kudos to you, and it took anoutsider, I think, to see that.
Can you also explain why it'scalled Liquid Death?
Speaker 2 (03:37):
I knew from my marketing days that I knew how
expensive marketing is.
So when you're a brand newcompany with no marketing budget
, no media budget or anything,your only chance at survival is
the actual product itself has tobe super shareable, buzzworthy.
Like you need people to createthe media for you for free, and
(04:00):
that's really hard to do.
Like people don't share toomany things in their feed.
Like people don't tell theirfriends about a new beverage too
often.
Like so for us, we needed tobake so much of the marketing
into the packaging and productitself because we weren't going
to be able to afford to have aokay, who cares thing and then
spend millions of dollars tobuild a campaign around it.
(04:22):
The campaign had to be theproduct.
We knew that the name had to bevery, very provocative and
memorable and funny and do thethings we wanted the marketing
to do, which is be funny, bememorable.
We needed the product and brandname itself to do that.
So then, when we thought aboutit that way, all the names
started dying off until you gotto something hey, what are we
willing to bet on?
(04:43):
If this was on the shelf,someone has to pick it up.
Then they have to be like whatis this?
And they have to take a photowith their phone.
So Liquid Death was just kindof one of the few names that I
felt.
Yeah, I would bet this issomething people have to pick up
.
Speaker 1 (04:57):
Do you think people understand that you mean death
to plastic or that doesn'treally matter?
Speaker 2 (05:02):
It doesn't really matter, because it's about you
just have to generate curiosityin people, which is really hard.
When someone sees something onthe shelf in the water aisle
that says liquid death, it'senough to shake them out of
their routine and be like wait asecond, what is this?
And if you can just get acustomer to a what is this, you
are light years ahead of 98% ofother brands.
(05:24):
That's really hard to do.
So if I can get them to a whatis this?
And they pick it up and they'relike water murder, your thirst
death to plastic.
Oh, this is cool.
I'm going to try this right.
So that's what you're reallytrying to get to.
It's like get someone toactually pick it up and then
read more about what it actuallyis.
But just getting someone topick something up is almost
impossible.
Speaker 1 (05:49):
It's really absolutely genius.
I thought it was particularlycheeky given that we were in the
middle of COVID and I wasthinking what a scary thing to
do.
I mean, I come from abackground of Wall Street where
you're so careful about anythingyou ever say or do, and there
you are boldly taking a hugerisk.
Speaker 2 (06:00):
People always talk about risk but I honestly think
for a startup with very limitedcapital, trying to do something
like the big guys is way riskier.
You will run out of capital wehave.
And I think I've always knownabout people because, being in
(06:27):
marketing so long, you're justso in deep with like culture and
psychology and how do peopleactually respond to things and
you realize people are prettysmart.
I think a lot of companies justwrite off consumers as stupid
and they kind of just create forthe lowest common denominator
where you realize people have asense of humor.
The vast majority of peopleinstantly got that liquid death
(06:49):
was funny and I always bring upthe example.
Kroger has their own brand ofice cream and the flavor is
death by chocolate and no one islike scared to eat that ice
cream, right, because peoplearen't dumb, they know it's a
joke and it makes it fun and Ithink during COVID one of the
reasons and we were kind of likea perfect brand for that- Very
(07:30):
bold and quite brilliant, andit's actually a great segue,
though, to how did you raisecapital?
The very first round of capitalthat we raised was really just a
friends and family round.
And even when I came up withthe idea for Liquid Death and I
was telling people about it,what I kind of realized was
people I knew who were smartmarketers were like this is
(07:51):
brilliant, you have to do this.
But anybody else outside ofmarketing and you don't
typically raise all your moneyfor marketing people they were
like I don't know if this isgoing to work.
You know retailers won't put iton the shelf.
So I realized I kind of had toprove out some kind of test and
because to put something in acan, you can't just do that in
your garage like making abreakfast bar.
(08:13):
You have to produce a minimumrun of like a quarter million
cans minimum to do any kind ofcan product really.
So that was going to be acouple hundred grand just to
even start.
I said okay, let's make aphotoshop render of a can that
looks real.
Let's let me just shoot thisreally cheap little commercial
(08:34):
that we literally shot for 1500bucks.
And since we didn't have realcans, I literally used a Miller
light can that had a white canand a gold lid but a girl was
pouring it out like this, so youcouldn't actually see the can,
but water was coming out.
And we made this video.
We put it on Facebook, made acouple of little funny social
posts of like what looks like areal can, and I put up a few
(08:55):
thousand dollars in paid mediabehind the video, because
Facebook won't show the video toanybody unless you put paid
behind it.
And then after about fivemonths of that, the video had
about 3 million views.
Our page on Facebook had 80,000followers, which was more than
Aquafina had on Facebook at thetime, because, like, who really
wants to follow a bottled watercompany?
And then we had hundreds ofmessages from people saying this
(09:18):
is the coolest thing ever.
Or is this real?
Where can you get this?
I had a distributor from NewYork say, we're the biggest
non-alcoholic distributor in NewYork.
Can we talk to a salesperson?
So then I use all that tractionto then have something tangible
to show to investors, tode-risk them investing.
Hey guys, look what I did with$6,000 and myself and no help
(09:41):
with the right investment team,I think this can really be
something big.
So then, yeah, I was able tokind of cobble together a five
grand check here, a 10 grandcheck here to kind of cobble
together about 150K to do thefirst minimum run of liquid
death.
And then, once we had kind ofphysical cans, I was introduced
(10:01):
to a venture capital firm calledScience which was behind Dollar
Shave Club.
Their whole thing was kind offinding disruptive brand-driven
products that were aboutdirect-to-consumer, and our plan
at first was just to bedirect-to-consumer because
retail was just too afraid ofliquid death and it was too big
of an undertaking to try to getinto retail out of the gate.
(10:22):
So we said, hey, let's juststart selling through our
website and through Amazon andjust do kind of digital social
marketing to kind of driveawareness around.
So then science came in as ourfirst sort of institutional
investor and then we startedselling the first product in
late January 2019.
Speaker 1 (10:39):
2019.
And I don't know if youdisclose how big your sales are
at retail now.
Speaker 2 (10:45):
Yeah, we're well past 300 big.
Your sales are at retail now.
Speaker 1 (10:47):
Yeah, we're well past 300 million in scan sales at
retail.
That is incredible, and youstarted with still water, just
flat water, but you've had a lotof innovation going on recently
.
Can you talk a little bit abouthow that progressed?
Speaker 2 (11:00):
Yeah, we launched with still water.
That did really well.
And then in 2020, our secondyear we launched the sparkling
version of our sort of premiummountain source Stillwater.
We had mountain sourcesparkling water, so something
that was kind of like a Perrieror Pellegrino that world.
Speaker 1 (11:17):
And what did you call it?
How did you come up with thenames?
Speaker 2 (11:19):
Our first product, which is the Stillwater.
Here it's called Mountain Waterand then it just comes in a
still version and a sparklingversion.
So it's just Liquid DeathMountain Water, still and
sparkling.
And the sparkling did reallywell out of the gate.
And the great thing that we sawwas out of the gate it was
almost purely incremental.
It had no cannibalization onthe still, because I think you
(11:43):
realize that people are kind ofeither still or sparkling people
there's not that many who areequal still or sparkling.
There's kind of one or theother.
So it was kind of total newaudience for us that that served
.
Speaker 1 (11:51):
And that in itself is so unusual that newish brand
very new really by the standardsof the industry has now found a
way to layer on a wholeincremental consumer.
I mean brands die for that tohappen.
Speaker 2 (12:03):
What we knew very early on was Liquid Death was
going to be.
More was going to be a truebrand.
And what I mean by that is Idefine brand as how do people
feel about your company beyondthe functional benefits of the
liquid, whatever that might be?
Because at the end of the day,no one can own a function or an
ingredient Exactly.
Hey, yeah, I've got this manyelectrolytes.
(12:25):
Well, someone else can havethat many and they can probably
have it cheaper and they've gotbetter distribution.
So you can't own that.
So if you start spending allyour marketing telling people
about something you can't own,you're effectively marketing for
the category and competitors.
So we always looked at it aswhat we can own that no one else
can own is our fun brand.
(12:45):
Nobody can be as funny as us.
Nobody can kind of market theway we market, so we always led
with that.
And when you're creating a truelifestyle brand which I think
is a word thrown around toolightly like just because you
use an athlete to market doesn'tmake you a lifestyle brand,
exactly you use an athlete tomarket doesn't make you a
(13:06):
lifestyle brand.
Exactly your point.
I think lifestyle means truebadge value, which most people
can more easily understand thatin the fashion space, where you
know that, hey, this thousanddollar pair of shoes is just as
functional as the $50 pair ofshoes.
But there's an emotional reasonand badge value and all that of
why people pay more and everyoneunderstands that in fashion.
(13:28):
But no one really understandsthat in CPG, I think, or
especially food and beverage.
But it's a real thing, like ifyou look at data and psychology,
the reason people walk aroundwith certain beverages or
packages.
It is emotional and not so muchfunctional.
So we kind of knew that, hey,if people were gonna love Liquid
Death for the brand and thelifestyle, they would probably
(13:50):
be open to a variety ofdifferent kinds of liquids that
the brand was wrapped around,right.
So when it was Stillwater, youhad all these people that
thought the brand was awesomebut they might be like, yeah,
but I'm not really a plainStillwater drinker, so I'm not
gonna.
Yeah, but I'm not really aplain still water drinker, so
I'm not going to buy it, butit's a cool brand.
Speaker 1 (14:05):
Oh, now they make sparkling.
Speaker 2 (14:07):
Now I can participate in the brand and this is cool.
And then we have more peoplesaying, hey, when are you guys
going to come out with flavors?
I don't really drink unflavoredwater too often.
So then in 2022, we launchedflavored sparkling.
It had just a little bit ofsugar and more flavor than kind
of the typical category leaderlike LaCroix had, and then, sure
thing, almost all incrementaland you had people saying
(14:28):
finally, now I can participatein Liquid Death because I like
flavored water and I don't likeunflavored water.
We kind of knew from thebeginning that the brand had
more legs as a true lifestylebrand and it wasn't just about
one functional beverage category.
Speaker 1 (14:42):
So since that you've also launched into teas and most
recently into some soda flavors.
So will you talk a little bitabout those?
Speaker 2 (14:50):
So we launched iced tea in 2023, and that was even
more successful out of the gatefor us than flavored sparkling.
And you know, within a coupleof months I think we were like
the number two or number onebestseller iced tea on Amazon,
with very limited marketing.
We didn't do a ton.
We made one video when welaunched it and that was kind of
it.
And then, literally like amonth ago, we launched new
(15:14):
flavors of our flavoredsparkling, but inspired by more
traditional soda flavors likeCola, dr Death and like Root
Beer Wrath.
And what we found is thatthere's tons of data that people
are trying to drink less sugarysoda.
People are not drinking thatmuch diet soda because people
feel like some of the stuff indiet soda most diet soda is not
(15:34):
good either.
But and people are going to theflavored sparkling category as
a soda replacement.
But the category is so blandthat most people are like I, I
try, but it's so bland it's notreally a legitimate replacement
for me.
So we said, hey, I think there'san opportunity to use a little
bit of sugar, little bit of likea natural sweetener, and create
(15:57):
our sort of place within theflavored sparkling category as a
true soda replacement.
Now, it's not as sweet as soda.
It's probably about half assweet as soda, but it's got the
10 calories, two grams of sugar,and tastes significantly closer
to soda than anything else inthe category.
And we even found that some ofour most successful flavors
(16:18):
within flavored sparkling wereones that kind of had a clear
soda analog, where it's likeorange lime, cherry, like things
that were classic soda.
Those were the flavors withinour flavored sparkling that were
selling best and I think so.
You know, we kind of said, hey,let's just sort of reposition
in a way our flavored sparklingcategory where we can kind of
(16:39):
have our own space within it,and that's how we've sort of
launched it this year.
Speaker 1 (16:43):
When I first came to this country from South Africa,
I was appalled and amazed at thesize of the portions, the
sweetness of the candy, thesweetness of the drinks, and how
much everybody had ofeverything and how cheap it was,
and I then unfortunatelylearned to eat everything on my
plate.
But I have noticed a tippingpoint where there are enough
people now trying to get offsugar, trying to lose weight.
(17:06):
Obviously, the ozempic typedrugs are really accelerating
that trend.
We now have someone in chargeof our health and human services
who is very conscious about howhe wants children to be fed in
schools and so on, and so itreally feels to me like a
serious tipping point in theworld of soda, and you're seeing
Walmart building alternativesoda category displays.
(17:30):
So I really do feel like you'vehit something, and I'm just
wondering how the big guys aregoing to respond.
Coke and Pepsi are launchinginto the prebiotic soda business
, which has been dominated byOlipop and Poppy, but do you
feel anyone else is doing whatyou're trying to do without
claiming to have other healthbenefits?
Speaker 2 (17:49):
Not too many, not too many that I've seen and again
I'm sure they will come.
Just like when we launched oneof the first brand driven still
waters in a can, we were theonly one.
Now, if you go look at theshelf, there's 10 brands that
now put water in aluminum.
And when we originally weremarketing for the first still
water in a can, which was this,you know, I had everybody
(18:17):
telling me hey, you need to tellpeople that cans are infinitely
recyclable and make all yourmarketing about cans.
And I said, yeah, but if I dothat, the minute there's another
can water, I'm marketing forthem too.
So we always led with the brandfirst.
So make people want to badgethis.
And then the secondary messageis death to plastic, infinitely
recyclable, which allows peopleto justify the vanity purchase.
(18:39):
Right, if someone buys liquid.
Death if you really did a truepsychology experiment on them.
It's because they either want tolook cool, they want someone to
talk to them, because when youcarry around a liquid death,
someone will talk to you.
A stranger will say what isthat?
Or, oh my God, liquid death,Like I love that, Like it
creates conversations.
But if you ask someone, why didyou buy this?
Nobody will say because I wantto look cool, they say, oh no,
(19:02):
look, because it's not a plasticbottle, right.
Same thing Tesla.
People don't drive Teslasbecause they care about the
environment so much.
It's a cool, badge value car.
But then they justify thepurchase with but it's better
for the environment.
Like.
That element is what gets therepeat.
It gives people a reason tosupport the brand in their own
sort of psyche of why they feelthat this is something good.
(19:23):
So same thing with like.
If we have success with oursort of flavored sparkling play,
yes, others will come, butwe're winning with the brand
first.
Not simply because of the taste, because you can replicate
taste anywhere easily.
Speaker 1 (19:37):
You've said something so critical that winning on
ingredients is just notsustainable because other people
can come in and do that.
And the power of brands ismagnificent when they're working
.
One example is Coke, which hasa lot of things going against it
perhaps, and it's tens ofbillions in scale, and they are
growing in carbonated softdrinks, they're growing volume
(19:59):
and they're growing pricing.
It really is a lesson in howpowerful marketing is and the
power of brands, and you reallyget that.
That's what differentiatesLiquid Death.
Speaker 2 (20:10):
Yeah, and if I remember reading recently, most
of the growth is coming fromCoke Zero and the better for you
side of carbonated soft drinks.
Speaker 1 (20:18):
Right, but the fact that this brand is so old, the
name.
Coke, and there are many brandslike yours that have been born
in the last decade, but Coke hasmanaged to stay cool and
relevant.
Speaker 2 (20:30):
If you look at the actual marketing and shelf data,
there's a direct correlationbetween market share, velocity
and physical space.
The more physical space a brandhas, it is completely mapped to
what its market share is and towhat its velocity is.
Because I think you look atsome of the data and for any
(20:51):
given category, customers arenot loyal to one brand or
product or price point within acategory.
People who buy the cheapestbrand in the category 30 plus
percent of those people also buythe most expensive thing in
that category sometimes, andvice versa of those people also
buy the most expensive thing inthat category sometimes.
And vice versa.
The people who buy the mostexpensive thing 50% of them
sometimes buy the leastexpensive thing.
(21:12):
So I think brands have to getout of their head that, oh, I'm
going to have this loyalcustomer that only drinks this
and they're this specific kindof person.
The reality is people aredrinking all kinds of things and
whatever is physically in frontof them in a store.
When they're making atwo-second decision and they're
trying to get in and out,they're going to grab what that
is Like.
(21:32):
The few people will take timesearching for something when
they're making a purchasedecision.
Very few of the like hardcorefans do that, but that's very
small.
That's why I think it's thetricky thing as a new brand when
you've got the Coke or Pepsisof the world that own the
physical space.
But what I think is the greatequalizer is something like
Amazon, because Amazon takes thephysical space barrier out of
(21:55):
the equation.
It's purely about consumerdemand for the most part there.
So yeah, that's definitely oneof the tough parts about being
in brick and mortar, because ifyou don't have the physical
space, it's just not possiblefor you to gain a certain amount
of market share, a certainamount of velocity.
Speaker 1 (22:11):
So how did you first get into retail and who were
your most supportive retailersand what was it that you used to
sell to them?
About the opportunity and teachthem about what was possible.
It must have been really,really difficult.
Speaker 2 (22:24):
Yeah, it was tough.
It's almost like when you raisemoney from investors.
Essentially what you're tryingto do is de-risk the offer.
I mean, that's what you'retrying to do.
So at a certain point onceLiquid Death was doing a few
million in sales on Amazon alone.
That's finally when someonelike Whole Foods was our first
major retailer.
That took us on surprisingly.
(22:45):
Now at least you could come tothe table with something hey,
we're doing a couple million onAmazon and we have to charge.
At that time we had to charge 20bucks a 12 pack in order to
make money.
So then if you're going to WholeFoods because you're not
shipping it anymore you're notshipping a 12 pound case of
water to somebody it's like, ohwow, now we can sell it to Whole
Foods for a good margin, andnow Whole Foods can sell it for
(23:08):
$14.99.
So we can say, hey, whole Foods, we have millions in sales
paying 20 bucks.
What do you think is going tohappen when we tell all those
people, hey, now you can get itat Whole Foods for $14.99.
So you were able to make areally compelling case that
(23:29):
there was not a lot of risk forthem in doing this.
And that's kind of what we'vehad to do every step of the way
with every retailer is show themhow well the brand was doing in
other channels where we exist,and that they may be missing out
by not having this brand hereand that they're just going to
go, whether it's to yourcompetitor or to Amazon, if you
don't have it.
And that's kind of how we'vehad to build out retail and
that's on the distribution side.
Speaker 1 (23:49):
I'm also interested in your household penetration.
Speaker 2 (23:52):
When it comes to distribution, we're primarily
DSD through the beer network.
Speaker 1 (23:58):
So that's direct store delivery through a
bottling network.
Who do you use for that?
Speaker 2 (24:02):
Primarily Anheuser-Busch, which really I
don't know how many otheroptions new brands have for DSD,
because you can't go into Cokeor Pepsi unless they own you.
But because of the alcohol lawsin the US, these beer
distributors are independentlyowned and they can make their
own decisions of which brandsthey distribute.
Now you have to go one by oneto all these guys and there's
(24:22):
literally hundreds of them andit's hard to get them to want to
take on new brands.
But over time, as you do morevolume and you get more retail
awards, you can sign thosedistributors.
But then we also use some of theUNFI direct stuff for folks
like Whole Foods where theyrequire you to do that, but we
try to remain DSD for as manyaccounts as possible.
Speaker 1 (24:42):
I just want to go back to branding and the way you
come up with your names.
Do you ever worry you're goingto run out of brilliant ideas,
because every single name makesme laugh?
That's hard.
It's like being a stand-upcomedian and having to have new
material all the time.
What's the process and how doyou make sure you stay funny?
Speaker 2 (25:00):
We're not doing a completely different playbook
from what Red Bull was verysuccessful at, which was, hey,
you blur the lines between anentertainment company and a
beverage company.
And Red Bull's entertainmentwas action sports, which was,
hey, you blur the lines betweenan entertainment company and a
beverage company, and Red Bull'sentertainment was action sports
.
So dirt bikes and snowboardsand stunts, those don't feel
like Red Bull commercials, eventhough they are, but it's
(25:22):
legitimate entertainment thatpeople would seek out on their
own to watch and it's notterribly expensive to create.
We're doing the same thing, butrather than action sports, our
thing is comedy.
We've built our marketing teammore like a Saturday Night Live
writer's room.
Like we don't really havetraditional marketing
copywriters, like we do havestandup comedians and people
(25:44):
that wrote for TV shows andthings like that.
Because, to your point, youneed that level of comedic
talent that you're not gonna getfrom like traditional marketing
people, right.
Because to your point, you needthat level of comedic talent
that you're not going to getfrom like traditional marketing
people, right.
And then we sort of signcomedians the way Red Bull signs
athletes.
Like we've got folks like BurtKreischer, tom Segura, bill Burr
, whitney Cummings who have allsort of invested in the brand
(26:06):
because they believe in a brand.
That's all about comedy, andthen you know they help support
the brand.
We can bounce ideas off themsometimes.
So yeah, it's just like sort ofbuilding a comedy driven
ecosystem is how we're able tokind of continually have even
more firepower for the outputthat we have.
Speaker 1 (26:23):
I just love it.
It's really genius.
I can't think of another brandthat's doing that, even in a
different category, can you?
Speaker 2 (26:29):
not really.
I think to your point,especially big companies.
Like humor is really hard andbig companies are typically
really bad at it, because comedydoesn't really work through a
old system and I think what endsup happening is everybody is so
risk averse and no one reallyknows what to do, so it just
(26:50):
gets watered down into thisthing that's not really funny
and then that's the thing thatgets signed off on.
So for us, the great thingabout comedy I think there was a
stat.
It was like 90% of these largecompanies that were interviewed
felt they don't have theresources to deliver humor in
their advertising.
So it's something that a lot ofcompanies struggle with and are
(27:11):
afraid of, and it's our biggeststrength.
Again, why we feel our moat iswhat it is is that what we're
doing is really hard for a lotof companies to do effectively,
but we built our company fromday one with that in mind.
Speaker 1 (27:24):
Yeah, so it's really authentic to you.
You're not like hiring acomedian to sell your product.
It's totally your DNA.
I also want to ask about yourpartnerships.
It's not intuitive that a waterbrand is going to be partnering
with a makeup brand or a soapbrand, an ice cream brand.
Can you just talk about how youstart thinking about these
(27:45):
ideas?
How does this bubble up?
Speaker 2 (27:47):
Again, like when you think about our goal to be funny
and entertaining.
But one of the best ways tomake people laugh is to do
something unexpected.
They actually.
There's an old adage aboutcomedy Comedy is entering
through the door and leavingthrough the wall being
unexpected.
So that's why I think theseunexpected partnerships like
(28:07):
Liquid Death and Elf CosmeticsJust saying it is funny, it is,
it's very funny, really funnyvideo and all that.
So I think one it's like we findthese partnerships where,
because we have such a trackrecord of delivering super
shareable, funny, viral content,we have brands that come to us
now, like Elf, like Amazon, whosay hey, we want you to help
(28:33):
come up with a cool marketingidea that we can be a part of,
because we want some of that,and for us we get exposure to
their audience, which may be anew customer for us, and
oftentimes they're paying us forthat.
So it can be very, very lowcost for us to release something
like that and we find the rightway to get our brand in there
and their brand in there.
(28:53):
And it's kind of a win-winbecause for them, even though
they're paying, it's thecheapest thing they've probably
done all year with the highestreturn and for us it costs us
nothing sometimes and we stillget a bunch of awareness and all
of that.
So it's been a nice system thatwe have right now.
And now it's almost like theinbound that we're getting from
brands is so heavy now that nowwe have to kind of like, okay,
(29:13):
hold on, let's be selective withwho we work with and why we
work with them and can we getthe best creative product out of
them, because not every brandis the right brand to partner
with Liquid Death.
We've seen things where it'slike, hey, here's the thing we
wanna do, and they're like, ohno, we can't do that.
Ok, no problem, you're just notthe right brand.
Like, we don't need to do thesethings.
So it's more like hey, if youwant to be on the Liquid Death
(29:35):
Show and you like the LiquidDeath Show, yeah, let's talk,
but it's not for everybody.
Speaker 1 (29:40):
Which leads me to your hilarious Super Bowl
commercial.
Can you talk to me about howthat came about and then what
the response has been?
Speaker 2 (29:47):
Super Bowl is obviously a big marketing spend
for a small brand.
But I've always said I thinkSuper Bowl is one of the most
efficient marketing spends youcan do because it reaches over
100 million unique people and itis the one time a year where
people actually want to watchthe commercials.
No other big TV event, even theNFC championship game, has
(30:10):
nearly as many people as theSuper Bowl.
But people don't go into thatsaying, oh, I can't wait for the
commercial, but they do for theSuper Bowl.
So to reach that many peoplewhen they're actually paying
attention, I mean you'd have tospend multiple times that to
have the same effect outside ofthe Super Bowl.
So I do think it's an efficientspend.
But when you're a small brand itbecomes a much larger bet
within your marketing budget forthe year.
(30:31):
So for a brand like us we needthat Super Bowl spot to work
really hard for us.
So we have to thread a lot ofneedles.
One Fox or whatever big networkis running the Super Bowl and
the NFL they have to approve allthe commercials and they are
very, very strict with what youcan say and not say and how sort
of provocative anything can be.
(30:52):
So that's a-.
Speaker 1 (30:53):
Mike, that makes me want to see what was on the
cutting floor before you got itpast there.
Speaker 2 (30:59):
So, yeah, so we have to thread that needle.
Then we also have to thread theneedle of okay, well, it's got
to be, it's got to feel likeliquid death, it's got to have
some of our spirit and humor init, but then also it's got to do
a lot of work to helpstrategically of what we're
trying to do, which is, you know, there's a lot of people who
have heard of Liquid Death.
We're somewhere like north of40% aided brand awareness just
(31:24):
for the name Liquid Death.
But you look within that, ofthose 40% who have heard the
name Liquid Death, way less knowthat it's water or flavored
sparkling or iced tea.
They're like, oh, I've heard ofliquid death, I thought it was
a beer or I thought it was anenergy drink, because the way
the product looks what makes itfun?
It looks like stuff that it'snot.
So so much of our focus isgetting more and more people to
(31:45):
know what it actually is that wesell, so that when they see it
in the store it's not oh,there's Liquid Death.
I don't need any beer today, soI'm going to keep walking that
it's, hey, liquid Death.
That's that water I heard about.
Or that's that iced tea I heardabout, which will get a lot
more conversion and newcustomers when they know what it
is.
So we wanted to lean in with theSuper Bowl spot.
The number one thing thatpeople mistake us for, which is
(32:08):
almost intentional on our part,is beer.
People love that.
It looks like beer.
They can walk around a partyKids drink it because it looks
like something they're notsupposed to have.
But we need to do someeducation.
So we said, hey, let'sbasically make a parody of an
old, like early 90s, beercommercial, but have all these
people drinking what looks likebeer in jobs where you should
(32:28):
never, ever be drinking beer andthen at the end you pay it off
with don't be scared, it's justwater and iced tea.
That concept was able to threadall those needles we kind of
had to thread, for, you know,super Bowl.
Speaker 1 (32:40):
And what sort of response have you had?
Speaker 2 (32:42):
Awesome response.
I mean, you know there'sobviously after Super Bowl you
have all these differentmarketing reporters saying what
they think their favorite, bestand worst ads were for the Super
Bowl.
But there's one organizationcalled EDO that actually uses
engagement data to measure whichads in the Super Bowl were the
most effective.
So right after these ads ran,they're measuring how many
(33:05):
Google searches were there, howmany website visits were there
all the things that you cantrack digitally after an ad airs
to see how effective was it atgetting someone to take an
action.
Liquid Death was the numberthree most effective ad in the
Super Bowl by their data and itmade us the number one most
effective beverage by a longshot in the Super Bowl.
(33:26):
So we think it did exactly whatwe wanted it to do.
Speaker 1 (33:30):
And advertising generally takes a year or more
to pay back.
But do you expect to actuallysee a lift to your sales sooner?
I mean, are there things youcan do with that ad on social
that can amplify?
I mean, I know there are, soI'm just wondering what you
expect.
Speaker 2 (33:47):
Oh yeah, we have a very sophisticated media
strategy.
Expect oh yeah, we have a verysophisticated media strategy and
we actually we brought on lastfall our first chief media
officer because I think media isso critical and being
sophisticated and efficient withhow you deploy it with all the
new technologies that areavailable.
So, everything from when we runthat Super Bowl spot, all the
(34:07):
people that go to the websitewho agree to sort of cookies, we
can now target other ads tothem to try to convert them into
purchases through Amazon or todrive them to retail.
Or, you know, on connected TV,you can actually get, you know,
kroger data and target peoplewho are sparkling water
customers on connected TV toshow them a sparkling water ad.
(34:30):
And maybe you can even know,hey, someone who visited our
website after the Super Bowl,who saw the spot, they're
watching this.
So the Super Bowl it's notpurely about oh, right, after
this, how much do sales go up.
Part of it also is when you gointo those retailers in the fall
and you're trying to get shelfspace.
They want to see that you'remaking a real investment for
(34:52):
them to give you the space.
So when you can tell them, hey,look, we're running a Super
Bowl commercial.
We're doing all of this mediato try to drive customers
directly to your stores off theheels of that.
That makes them feel likeyou're de-risking them, giving
you the space, and without someof those investments you might
not even get that space to beginwith.
(35:13):
So there's a lot that goes intowhy you know, you make these
sort of media investments andhow you deploy them.
Speaker 1 (35:20):
And do you do billboards?
Do you do print Like?
What other forms do you likebest for media?
Speaker 2 (35:27):
Media is really just about finding the most efficient
way to get your message infront of the eyeballs that you
need, and earned media is alwaysat the top of our strategy,
which is why pay for eyeballswhen you can create things where
people are spreading it toother people for you for free.
Now you have to be legitimatelyentertaining to do that, but
(35:49):
that's in our DNA how we do that.
So when we do things like aviral video that we maybe spend
$60,000 to produce and shoot, itgets 15 million views and
generates $6 million in earnedmedia off of a $60,000
investment.
So that's always at the top ofhow we think about media getting
(36:09):
people to spread it, gettingpress to write about it,
generating its own media.
But then we just look at yeah,look, billboards are great, but
if you look at what is the costper eyeball, you're paying for
that billboard.
Speaker 1 (36:21):
It's really high and then if you're in the freeway in
traffic.
Speaker 2 (36:24):
Look at the car on either side of you.
People are.
They're not supposed to be ontheir phones, but they're on
their phones in their cars.
They're not looking up at thebillboards like they used to.
Sure you could run a billboard.
It might be effective, butyou're paying a big premium for
that and you have to analyze isit worth the premium?
I can spend one 50th of thatcost to target that same eyeball
(36:45):
on their phone and then youhave to make the case.
Is them reading you won'tbelieve it's not soda on their
phone?
Does that have a hugelydifferent impact than when they
read you won't believe it's notsoda on a billboard?
Maybe there's some right, butis it worth 50x more?
Maybe not right.
So it's all about this analysis, where I steal this from my old
boss.
Gary Vaynerchuk, where he's likeyeah, you're in the business of
(37:07):
day trading attention, You'rein the business of day trading
attention.
Where is the cheapest way toget the most ROI on your spend
from an attention standpoint?
Speaker 1 (37:15):
So what are your goals for Liquid Death going
forward?
You're over 300 million inretail sales already.
What?
Speaker 2 (37:23):
does the future look like?
Our goal is to be amulti-category, healthy beverage
platform.
We've already proven we're atrue multi-category brand.
Beyond.
You know, we're winning inStillwater, I believe, as of
last week on Amazon.
Our Mountain Water passed Fijiin market share on Amazon for
the first time last week.
(37:44):
But this is before Super Bowl.
We don't even have the postSuper Bowl data yet, this is
before Super Bowl.
So we're proving we're winningin Stillwater.
We're winning in FlavoredSparkling.
We're now the number one icedtea on Amazon in dollars.
We passed Pure Leaf in January.
I think Liquid Death can go intoother categories in the future.
We're not in any rush to jumpinto new categories.
We've got three pretty massivecategories with pretty massive
(38:07):
TAM that we can still keepgrowing.
But, yeah, we want to be a truemulti-category brand.
Exist in multiple places in thestore water section, in the
flavored sparkling section, inthe tea section.
What other sections can we endup in the store?
And then, yeah, I mean I thinkthere's a possibility for us to
be a multi-billion dollarbeverage company and to do it in
(38:31):
a way where we don't have to bethe number one brand in every
category, right, like we can bea top 10, top five brand across
four categories and be a massivebusiness, whereas a lot of
other brands where, if they'reonly in one category and they're
not good at extending intoother categories, they're
fighting for limited shelf onlyin one category and they're not
good at extending into othercategories they're fighting for
(38:53):
limited shelf space in onecategory and it's a lot harder
to get meaningful shelf spacelike that in one category unless
you're like the category leaderor the number two or number one
.
So that's kind of how we thinkabout it.
Speaker 1 (39:07):
In order to go from being little to even 300 million
and then taking a next step toget even bigger from there, you
need an incredible team aroundyou.
I think we often see what getsyou from A to B is not
necessarily what's going to getyou from A to F.
Wrong letter, not F, but A totriple.
Speaker 2 (39:26):
A.
Speaker 1 (39:26):
The process of growing up as a company is
really painful.
It's like being a toddler andthen a teenager, and you really
have to work hard to put theteam in place.
That's going to be the teamthat can win long term, so I'd
love to know who some of yourlieutenants are and how that
works.
Speaker 2 (39:44):
Yeah, no, you're absolutely right.
I think as you grow a companyfrom zero, the bigger you get,
the more options you have.
In the early days you don'thave many options.
How many people want to cometake a risk to run sales for a
company that's got a couplehundred thousand in sales right
Like you're going to be limitedon who's willing to do that.
So you kind of got to go withwho is excited, which may be a
(40:05):
very limited pool.
Work with those people.
Then hopefully some of thosepeople they're able to grow with
the role and stay.
Other times the company is adifferent company Every nine
months or 12 months as you growand scale and the scopes of
certain roles dramaticallychange every year and not
everybody like.
Sometimes the roles outgrowpeople.
But as you get bigger and moreproven you've got more interest
(40:26):
for strong talent that iswilling to maybe leave other big
companies to come work atsomewhere like Liquid Death, and
I think we now have a reallystrong executive team in place
with our chief retail officer,mike Fine, who came to us last
year from.
He was there at Body Armor andCoke like big companies with big
revenue that know the game thatwe need to play to get to that
(40:49):
next tier of whether that's abillion in sales or whatever you
want to frame it.
We brought in our new CFO lastyear who was the CFO of Beam
Suntory North America, kareemSadika.
You know, again, kareem isincredible but we probably
couldn't have gotten Kareem twoyears ago right, you kind of got
to be at the right level wherehe's excited to join and seize
the potential.
And then we've got folks likeMarissa Bertha, who is our chief
(41:12):
strategy officer, been with usfor a few years now.
She worked on the executiveside at 7-Eleven and was there
in the early days of LiquidDeath when 7-Eleven made a
venture investment into LiquidDeath in our early days and she
helped lead that and gotfamiliar with our brand and
eventually wanted to come overto our side.
We have a really strong team inplace with diverse backgrounds
that are really they've managedbusinesses that are a billion,
(41:36):
two billion, and they kind ofknow what excellence looks like
at those levels and, you know,helping us sort of start getting
into that next level of growthand process and the growing up
of a business.
Speaker 1 (41:47):
I'm lucky enough to have got to know Marissa she's
fantastic and also Kareem alittle more recently, and
they're real pros and veryanalytical, very data-driven,
very impressive.
It's just great to see that andthe opportunities that presents
, like, for example, I noticedyou're drinking a smaller can
than I've seen.
Speaker 2 (42:06):
Yeah, this is big for us this year.
So all of our grocery productthat's in cases, multi-packs is
going to 12-ounce cans this yearBecause we've been in these big
19-ounce cans that you'reholding and that was because we
didn't have much scale.
We could really only make senseof being in one can size.
So it's one can size for singleserve, grab and go, then the
(42:30):
same can in a multi-pack.
But what we realized when wereally dug into a lot of
research and work is that peopledon't really want to drink
giant cans on their couch athome for the home occasion.
The smaller 12 ounce cans arewhat people prefer for that take
home occasion which you kind ofsee in all the categories,
whether it's flavored, sparkling, iced tea, like smaller is for
(42:51):
the home occasion and that alsoenables us.
This year we're selling those12 ounce cans in six packs,
which get us down to like a 6.99to 8.99 price point, depending
on whether it's water orsparkling or tea, and getting
below that $10 price point inmass grocery is a huge unlock.
(43:12):
Almost all non-ALF brands otherthan Energy in their
multi-packs are in a sub $10price point where, even though
we've been growing like crazy,we were selling 19-ounce cans in
an eight-pack for anywhere from$14 to $16, which was almost
double the cost of anycompetitor sitting next to us on
(43:32):
the shelf.
So we're excited that this year,kind of moving into that
sub-$10 price point, it's goingto really level the playing
field, accelerate householdpenetration because it's a lot
less expensive to try the brand,whereas if you've never tried
Liquid Death, if you're going tospend $15, it's a little bit of
a stretch for some folks soexcited about that.
Speaker 1 (43:52):
It's been fascinating as a beverage analyst and I
covered Coke and Pepsi for goshwell over 20 years, probably
closer to 30.
And just looking at that, theycall it the price, package,
architecture, but also the pointof sale.
So being able to create thatgrid of which package for which
customer, for which actualconsumer, and there is so much
(44:15):
growth to be had by having theright thing at the right place
at the right time.
And so it often doesn't requireanother flavor, it's just let's
get the packaging right.
Speaker 2 (44:25):
Completely.
I think price and pack, as I'velearned, you know, more in
beverage is so critical, Like wenever had a packaging hierarchy
, it was just nope.
There's one and I think now,finally that you know we have
enough scale where you canproduce multiple packs
efficiently, it made sense to doa proper pricing and pack
architecture.
And yeah, we're still gonnahave the 19 ounce cans for the
(44:47):
cold grab and go single serve.
That works great in conveniencestores and sometimes I think,
for entrepreneurs.
Disruption is important.
But some things maybe don'tneed to be disrupted, like look
at the beer industry.
Any case of beer you buy in thegrocery store is a 12 ounce can
and any single beer can is abig 24 ounce tall boy.
Like they've spent decadesfiguring out.
(45:09):
That's the right thing.
You might.
That might not need to bereinvented.
So sometimes it's good to takea cue from certain things or
certain size and prices for areason and you know, take that
in mind as you're thinking abouthow you fit into that and you
can be disruptive elsewhere with, like, the brand, the marketing
, the product itself, the liquid.
But sometimes some of thesepricing and pack architectures
(45:32):
are already sort of created forthe categories.
Speaker 1 (45:35):
Just in terms of international exposure and plans
and also production.
Can you just talk about thehistory there and what your
goals are longer term?
Speaker 2 (45:44):
Yeah.
So we originally had to produceour still water in cans in
Austria because back in 2018,there was not a single co-packer
in North America who could putmountain spring water into cans.
It didn't exist.
So I found a co-packer inAustria because I had to start
(46:04):
looking outside the US, and theyhappened to be able to do it
because they owned their ownmountain spring water source,
but they also had big canningcapabilities because they made
energy drinks as well as bottledwater there.
So they said, oh yeah, we cantotally can water for you.
So at that time, when youreally looked at the cost of
cans and shipping it to the US,it actually wasn't that bad.
(46:25):
In fact, at that time it wasmaybe the same price, if not
less, to actually produce here,because there was a can shortage
in the US around 2021-ish andit was really hard to get cans
in the US.
So luckily, we didn't have thatproblem producing in Austria
Once COVID hit and then in 2021,ocean freight, as most people
(46:46):
know, 4x'd almost overnight.
So all of a sudden, our cost toship the product to the US went
absolutely through the roof andthat hung around for almost two
years.
So after about a year of thatwe said, hey, it's time We've
got enough scale, let's bringall of our supply chain to the
US domestically.
So basically over the next yearand a half we sort of got US
(47:10):
co-packers for our mountainwater SKUs and then also for our
flavored sparkling and our icedtea and it's really, as of it
was early last summer, we werefully transitioned to the US.
So we stopped working with ourAustrian co-packer late last
year and as we think aboutinternational now, we don't have
any plans to really pursue thatin the next couple of years
(47:32):
because we have this US supplychain and now it's just not
efficient to try to be shippingproduct from the US over oceans
to these other places.
Speaker 1 (47:39):
When you think about margin, Is that what you were
doing in the UK?
Because there was some news onthe UK recently.
Speaker 2 (47:46):
Yeah, I mean, if you look at just for a test launch
that we did in the UK, we hadalmost no marketing investment.
We did over 2 million in retailsales the first year in the UK,
which I think the stat I heardwas 98% of new brands there that
launched with almost noawareness, which we had no
awareness in the UK.
It was 1% brand awareness whenwe launched that.
(48:07):
98% of them don't even hit 1million in sales.
So for us I think it was apretty decent test.
But the reality was once lastsummer came along and we
realized, hey, the economics ofhaving to start shipping product
from the US to the UK insteadof Austria are just not going to
make sense.
So let's just pause on that fornow, really focus on the US and
(48:28):
growing the US, and then we cankind of come back to
international once we have a bitmore scale and can kind of make
the margins work for us there.
Speaker 1 (48:37):
Yeah, that makes a lot of sense.
Well, mike, you've beenincredible.
I've loved having thediscussion around marketing
because I think something yousaid is just so true to repeat
it again that it's very hard tostay ahead of the game based on
product attribute and the valueof a brand, just as we see in
(48:57):
fashion, is where the magic is.
So, being able to keep thatbrand healthy, alive, fed, and I
think you've really carved aunique space in humor and in
authenticity.
It's super exciting to watch.
It really, really is.
So I really appreciate yourtime.
Any thoughts you want to leaveus with?
I know that a lot ofentrepreneurs are probably going
(49:17):
to have watched this, as wellas investors, and I don't think
there's an easy way to invest inLiquid Death because it's
private right now.
But any thoughts you have,please go ahead.
Speaker 2 (49:28):
For me beverage, even though I had no experience in
beverage.
What I did have experience inwas marketing and brand.
And I think for mostentrepreneurs, if you're going
gonna start something, the keyingredient for winning has to be
something that you know betterthan most other people.
Because I knew in most beveragethe winners are determined by
brand, to your point.
They're not determined byingredients, they're not
(49:51):
determined by flavor profile,they're determined by brand.
So the fact in beverage thatbrand is so critical and that
was my strong suit it made sensefor me to kind of pursue that.
But I think some folks theymight go into entrepreneurial
things purely because they seean economic opportunity, but
they're not the person that'sgot the expertise for what's
(50:11):
really required to win in thatspace.
So that's what I would say.
Speaker 1 (50:15):
And there's also the staying power you need.
You just have to keep thatbelief going, because I know
that the journey is long andhard, the fundraising can be
torturous, and so I think someof it is just having that
staying power to be willing togo all out with it, right yeah?
Speaker 2 (50:30):
you have to.
The more you love something andthe more you care about
something more than the averageperson, the more you're willing
to go through that.
If you don't really care orlove it that much, it's hard to
go through hard things.
But if you really love it andyou really care, it's a lot
easier, I think, to get throughthe tough stuff.
Speaker 1 (50:47):
Well, Mike, thank you so much for your time.
I can't wait to do this againin a year and see just what's
happened.
Speaker 2 (50:53):
Yeah, I would love to .
Speaker 1 (50:54):
I'm sure it's going to be great.
Thanks again.
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