♪ Breaking the law, breaking the law ♪ - [Narrator] This isn't what it looks like. These kids aren't cracking open beers. They're hydrating with Liquid Death, a water brand that ditched the serene mountain springs

for skulls, punk rock, and viral chaos. What started as a joke—marketing water like booze—has evolved into a company with a $1.4 billion valuation. And it's all built on one simple idea: making the plainest drink in the world feel rebellious.

- The success of the bottled water industry is really the success of the marketing industry. (upbeat music) - [Narrator] This is the Economics of Liquid Death. These are some of the top luxury bottled water brands

in the U.S. Evian highlights its water's journey from the French Alps. Smartwater markets its vapor-distilled H2O with added electrolytes. And Fiji emphasizes its aquifer and pH level of 7.7. Liquid Death has none of that.

- The traditional marketing strategy for bottled water as a premium product was all about purity. - [Narrator] And that strategy has a lot to do with the distrust of tap water. Experts say 59% of American water users think that bottled water is safer than tap.

- Bottled water brands are just sitting back, you know. They don't need to do anything. This distrust is out there, and people are buying this water. - There's not really anything incredibly different about our water or our products,

But there really is nothing incredibly different about any product almost anywhere. It's all just brand differences and packaging differences, and that's why people buy things. - [Narrator] Liquid Death's CEO Mike Cessario wanted to compete with luxury brands like Fiji and Evian.

- We're premium. We have to be. But we don't want to be far and away the most expensive thing on the shelf. - [Narrator] To target a consumer willing to spend money on luxury water, the company focused on differentiation.

- We've seen it as an aspirational product. We've seen it as a kind of Goop-esque health product, but we haven't seen it as this, like, counterculture product. And that's just enough for someone,

when they're passing the water aisle, to do a double take. And even those few seconds, when it comes to consumer marketing, those are seconds that marketers will spend millions of dollars trying to buy from you. - [Narrator] Thanks to that identity,

the company didn't have to spend millions on ad agencies. Instead, it relied on going viral from the very start. - Liquid Death, especially in the beginning, relied a lot on organic marketing. You're basically cutting out millions of dollars

in advertising costs. - [Narrator] This paved the way for a move into physical retail, like grocery stores, convenience shops, and bars. - A really good aspect of their distribution strategy was getting into bars quite early on.

You know, we don't really see that so much with newer soda brands, for instance, which prioritize retail and wholesale. - [Narrator] The company targeted audiences in places where it wanted its cans photographed and shared.

A 2021 partnership made Liquid Death the exclusive water sold at Live Nation concerts nationwide. - So many people have told us, "Yes, the first time we ever heard of Liquid Death, or saw it, was at a festival." And then, eventually, you have to imagine those people then

seeing our marketing elsewhere, and then, or the next time they're in a store, like, "Oh, there's that water that I had at the concert." - [Narrator] In just a few years, Liquid Death has become

one of the most followed beverage brands worldwide, outpacing luxury water brands and trailing only energy drink giants, Red Bull and Monster.  The company has secured distribution in 113,000 retail locations in the US and UK,

with retail scanned sales rising to $263 million in 2023, a nearly 140% increase from the year prior. - Now, we've gotten a lot more sophisticated. We can target specific kinds of people with social,

geo-targeted advertising around a specific store.  Hey, within a 10-mile radius of this store, we can reach these people and try to give them a specific offer or reason to go into that store and purchase, and be able to track that.

- [Narrator] But Liquid Death's competitors aren't necessarily just other bottled water brands. It's also targeting competitors like non-alcoholic beers, better-for-you sodas, and functional beverages. - What they're trying to be is a beverage company.

- [Narrator] A year after the original Liquid Death launched, the company started selling sparkling water. Almost two years later, it introduced flavored sparkling waters. Last year, it added iced teas. And to target users of refillable water bottles,

Liquid Death released flavored electrolyte packets called Death Dust. - The minute you go into the world of flavor and texture and the sense of adding fizz, then you can start to sell a product that is a little bit more unique to you

and therefore you can charge a little bit more for it. - [Narrator] Today, the company says the majority of their sales come from sparkling flavored water and iced tea. - Over 60, 70% of our business now is not plain water.

- [Narrator] But some new launches are still played for the joke, like the brand's collaboration with Van Leeuwen, which introduced a limited-edition flavor, hot fudge sundae, that the company says was Amazon's best-ever grocery limited-time offer.

- We thought it was going to be a month or two of inventory. We sold out of it in six hours. - [Narrator] It also sells things like an almost $6,000 cold plunge, a $250 murder hole game set,

and a mysterious country club membership for the small price of your soul. - Most beverage brands don't have fans. We have people who are spending $30 on a t-shirt, and we're selling out of them. We've sold over a million dollars worth

of Liquid Death gold watches. The brand means something more to people than just the functional difference of the liquid. - That's all marketing. It's all just a ploy to get that name out there and to get PR and publicity.

It's going to be the drinks that are going to make them money. - [Narrator] But as trends shift and new brands emerge, Liquid Death does risk becoming flat. - It's just going to be really interesting to see, as a brand like this gets bigger and bigger,

can they still sustain this idea of 'we're a punk rock independent company,' when by the very virtue of growing and growing, you're probably not going to end up doing things that differently. And the question will be whether consumers like the product enough

to keep buying it then, or whether there'll be some kind of pull away when they think that they've been lied to. (bright upbeat music)

How Liquid Death Turned Normal Water Into a $1.4B Beverage Brand | WSJ The Economics Of

The Wall Street Journal takes you inside carefully selected stories and events in a visually captivating way so you can dig deeper into the news and insights that matter to you. 

How Liquid Death Turned Normal Water Into a $1.4B Beverage Brand | WSJ The Economics Of

How Liquid Death Turned Normal Water Into a $1.4B Beverage Brand | WSJ The Economics Of

Scripts