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THE LATEST BEVERAGE BRAND NEWS
Liquid Death Raises $75M, Preps Flavored Line Launch California-based canned water brand Liquid Death announced in January that it has raised $75 million in a Series C round led by startup studio Science Inc. The new funding brings the brand’s total financing to about $125 million since its founding in 2018 and is aimed at helping the company scale its presence in the conventional channel and support a new flavored sparkling water line launching in January. The round also includes investments from Powerplant Partners, Live Nation Entertainment (which first invested in the brand in 2021), Access Capital and Nomad Ventures. According to co-founder and CEO Mike Cessario, Liquid Death was up over 300% year-over-year in 2021 and reported about $45 million in topline revenue, up from $3 million when the brand launched in 2019. Its products are currently sold in about 29,000 retail locations nationwide, including Whole Foods, 7-Eleven and Target stores. With Albertsons already onboard, the company is seeking to grow its presence in grocery stores, with much of the new funding set to go towards building out its field sales team. “As you can imagine, everybody at the beginning, BevNET included, was skeptical of Liquid Death and I think it’s taken retailers more time to come around and realize it’s not some niche thing,” he said. At the end of 2021, Liquid Death had a retail ACV of about 9% nationwide, though Cessario noted that for most of the year the brand averaged a 6% ACV. The company is also preparing to launch its first flavored line, set to debut online at the end of January. The new sparkling waters will be sold in Liquid Death’s customary tallboy 16.9 oz. cans and come in three flavors: Berry It Alive, Severed Lime and Mango Chainsaw. The drinks are made with the brand’s mountain spring water and will also be sweetened with agave syrup and contain 20 calories per can. “The most important thing is, we want to make something that you absolutely call a healthy beverage, but let’s make the taste significantly better, or better is a relative word, but a little more intense or bold than Lacroix and Bubly and all of the zero-zero-zero [calorie] flavored sparkling waters out there,” he said. Mark Rampolla, co-founder and managing partner of Powerplant Partners, told BevNET in a statement that he has “never seen anything like Liquid Death” throughout his time in the food and beverage business, pointing to its swift crossover success in both the conventional and natural channels, as well as with a diverse array of consumers. While Liquid Death has worked closely with lead investor Science Inc., which first took a stake in the brand in 2018, the new partnership with Powerplant is also poised to open additional doors within the beverage industry through the firm’s experience in the space. “It’s scaling so fast, selling as well in Whole Foods as 7-Eleven and resonating with a wide audience ranging from heavy metal to country music fans and soccer Moms to skater kids,” Rampolla said. “Many entrepreneurs think they are building lifestyle brands, but how many of those brands have consumers sporting tattoos of them? Mike and his team are building the next Red Bull by making water cool and along the way will eliminate mountains of 12 BEVNET MAGAZINE – JANUARY/FEBRUARY 2022
single-use plastic and pull tons of sugar out of our bodies. That’s a mission we’re excited to support.” Dan Gluck, managing partner of Powerplant, echoed Rampolla’s comparison to Red Bull, noting that despite early skepticism from many in the CPG industry that a brand built around death could connect with mainstream consumers, he didn’t believe Liquid Death had a ceiling. Citing Powerplant’s internal data, Gluck said 291 bottled water brands launched in 2019 and Liquid Death is now outpacing all of them. “M&A is always part of our diligence,” Gluck said. “And we’ve seen where transactions have taken place, the multiples, and this is going to be a very attractive asset to acquire one day.” As has been the brand’s main claim to fame thus far, Cessario said the company drove a significant number of sales last year through earned media. One of the most successful recent ad campaigns, he said, was the release of a limited line of skateboards made using ink mixed with the blood of Tony Hawk (also an investor in the brand). A video for the campaign cost about $10,000 to produce and roughly $5,000 was spent on the physical boards he said, but its viral success ultimately generated roughly $10 million in earned media (as well as revenue from selling the boards). Going forward, merchandise and apparel will also play a bigger role in Liquid Death’s strategy, including plans for a wholesale business. Last year, apparel sales passed $3 million, up from $700,000 the year before, and branded clothing is also being sold in Urban Outfitters stores. According to Cessario, about 52% of direct-to-consumer purchases last year also included an item from the brand’s online merchandise store. “Merch is a very serious part of our business, just like it is for Metallica or Travis Scott, or any of these huge artists where merch and apparel is a huge part of what they do, even though technically what they do is make music that people consume,” he said. “They’re not clothing manufacturers, but I think it all goes hand in hand and not many CPG brands know how to really take advantage of that.”
