![]() Some founders overvalue the brand and drink too much Kool-Aid, thinking there’s more runway than they have.”Ĭompetition is as tough as ever and inflation and fuel costs are still hurting brands. “I hear about it all the time, especially with younger brands asking for too much money. “Many brands miss their acquisition window at peak price,” said Arthur Gallego, a longtime beverage industry consultant. Robert Brown, cofounder of Encore Consumer Capital "It’s an unbelievable marketing success that has come at an incredible cost.” (Rampolla reacquired Zico in 2021 and is trying to rehab the brand.) An IPO isn’t out of the question–energy drink Monster and fitness beverage Celsius took that route but there have been very few of late. But Coca-Cola also shut down Rampolla’s Zico Coconut Water and Honest Tea in the last couple of years–it paid a pretty penny to acquire the brands only a few years prior. Then in 2021 Coca-Cola bought sports drink BodyArmor in a $5.6 billion deal, the company's largest acquisition of a brand. ![]() But can Cessario get investors that include beverage industry veterans and celebrities such as Swedish House Mafia, Machine Gun Kelly, Tony Hawk and Whitney Cummings anywhere near the valuations of the past? The watershed moment in the industry was Vitamin Water’s eye-popping $4.1 billion acquisition in 2007 by Coca-Cola, which spurred a bubble of investment in unprofitable new beverage brands seeking big exits. Last fall, when investors put in money, they were already baking in the fact that Liquid Death would find a way to be profitable. Cessario likely has an estimated 10% ownership, worth $70 million. Liquid Death’s $700 million valuation, roughly seven times sales, is far higher than Pepsi’s three times sales though it trails energy drink Monster’s valuation of nearly nine times sales. The financial highlights sent to investors while raising its Series D in October show that last year the company was unprofitable and had slim gross profits–roughly 12%–versus a typical beverage company’s targeted 50%. Liquid Death declined to comment on the financials in the investor presentation, noting only that going domestic has “significantly” increased profitability. At that point, Liquid Death, which sells entirely into North America but is expanding into Europe this summer, expects domestic shipping to account for 11% of total expenses. Liquid Death hopes to bring that down to 21% this year, and projects that the company will be profitable by 2024, or when ocean freight is supposed to be entirely eliminated. ![]() Soaring ocean freight costs hammered Liquid Death in 2022, accounting for 47% of expenses, according to an investor presentation viewed by Forbes. Gabe Ginsberg/Nightclub & Bar Media Group/Getty Images Otherwise, they retained core elements such as the wordmark and skull.Liquid Death is the top-selling water on Amazon, and has a cult-like following: 240 fans have tattooed the brand’s logo on their bodies. Finally, Severed Lime makes excellent use of green and yellow, with a bit of white. Mango Chainshaw sports a gold hue with black with a little white. Berry It Alive looks the most similar to the original packaging, with a white background, gold as a secondary color, and a touch of red. The packaging follows a similar formula taking Liquid Death’s fun and standout packaging and adding some color. Liquid Death took its quality Alpine water and added a splash of flavor, electrolytes, and a touch of sweetness to create its new sparkling flavored waters. “Our flavored waters are lightly sweetened with three grams of real agave nectar, coming in at just 20 calories, so you get a much better taste without sacrificing too much on health.” “Our flavored sparkling waters have also found a new gap within the flavored water market itself,” Mike explained. On the other end of the spectrum, there are super sweet sodas with tons of sugar or intense sweeteners,” Cessario said. “Many flavored options fall in the zero-zero-zero category-zero carbs, zero calories, zero sugar, and often zero flavor. Our Instagram post of the flavor cans is our second-best performing post of all time, second only to our Tony Hawk post that literally broke Instagram,” Mike Cessario, co-founder and CEO of Liquid Death, told Dieline. “A lot of our sparkling water customers have been dying for us to come out with flavors, so we have some built-in demand. Given such success, which includes a deal with festival and event venue firm Live Nation to replace plastic bottled water with Liquid Death, it was only a matter of time before it branched out into flavored sparkling water. ![]() Canning water isn’t a new concept, but Liquid Death has taken the idea of RTD still and sparkling H2O mainstream with its heavy metal branding and strong sustainability message around using aluminum instead of plastic. ![]()
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