How is a company that sells canned water worth $1.4B?

https://www.theatlantic.com/technology/archive/2024/03/liquid-death-canned-water-marketing/677752/

by divbzero • 2 years ago

24 83 2 years ago

theatlantic.com

bedhead• 2 years ago

Because people pay money for it?

anigbrowl2• 2 years ago

Obviously, but why? What makes a brand so valuable, when not anchored to any sort of unique product?

aiauthoritydev23• 2 years ago

People paying money itself is an evidence of "unique product". You think you can make money by selling canned water ?

steveklabnik10• 2 years ago

Here's the reason: people who drink have weird feelings about being around non-drinkers.

I've been on both sides of this: I have a straightedge tattoo. I didn't start drinking till my late 20s, post college. I now drink... probably a bit too much at times, if I'm honest.

Back when I didn't drink, I had zero problems with other people drinking. I'd go to the bar with people, no problem. Just a personal choice.

But drinking is a social activity. It's got a lot of vibes, not a lot of rigidity. And some drinkers, when out drinking, find that someone who isn't drinking can ruin the vibe. I found that a lot of people who I was okay hanging out with while they were drinking, weren't as okay as having me hanging out while they were drinking.

Enter Liquid Death. Now others feel like you're fitting in. Seems like you're having a tall boy just like everyone else.

Furthermore, since this is now A Thing, if you want to go out, but don't want to drink, it's nice to know that it's gonna be accessible. I was out a few weekends ago, one of the trio was done drinking, but the other two of us weren't. It was nice to be able to buy them a "drink" too, they could get started on re-hydrating immediately. I bought a Liquid Death over this past weekend, when I was out a bit early, didn't feel like having a drink, but did want to support the event I was at buy buying a drink.

Yes, it's "irrational." It's really about human interaction. Which has its own logic.

hermitcrab8• 2 years ago

Because we are all basically apes in clothing and obsessed by status. If you can convince someone that something will make them cool/desirable/higher status, they will buy it, regardless of what it is. Even a $2 can of water. Why do you think people spend fortunes on Lamborghinis, that are objectively shit cars for anything other than showing off? Or Rolexes, which don't even keep time very well?

lebean• 2 years ago

Bingo! This, and people will probably pay money for it in the future. A killer combo that makes something worth money!

paulpauper2• 2 years ago

When why not just make a copycat brand. I thing the success of this brand is just survivorship bias. There is nothing special about it but the branding.

hermitcrab8• 2 years ago

It's hard enough to sell people stuff they do need. Selling them stuff they don't need requires a lot of money and dark skills.

AdamJacobMuller6• 2 years ago

https://archive.is/ef7nb

tempsy• 2 years ago

You can ask the same about Celsius the zero sugar energy drink maker which is worth $20 billion apparently

reducesuffering• 2 years ago

Celsius makes sense as they have good flavors, include ECGC, B vitamins, caffeine, and are cheaper than other big energy drinks, even $1/ea if you buy bulk.

kube-system2• 2 years ago

Because water is the most important substance to support human life and people value the convenience of having it available in a manner that they prefer.

ramon156• 2 years ago

laugh track

hermitcrab8• 2 years ago

water is the most important substance to support human life

I'd say that was air.

AdamJacobMuller6• 2 years ago

I don't mind bottled water, I drink a lot of it in fact, but I do find two things interesting here.

#1 is how companies are creating "artificial" value of their products, purely through marketing

#2 is companies who seem to exist purely as this marketing and sales apparatus.

AdamJacobMuller6• 2 years ago

Because you're not paying for a company that cans water, you're paying for a company that has built an effective marketing apparatus which entices people to pay a premium for their canned water.

I know nothing about this companies operations (I only heard about them a few weeks ago) but I would wager money that they entirely outsource their production and distribution operations and what they consider their "secret sauce" or the actual thing which is actually valuable to future growth of the company is entirely their marketing and sales operation.

This is not (entirely) to be diminutive of what they are doing. Convincing people to spend $2/can for filtered tap water is impressive.

Solvency2• 2 years ago

You just described every single beverage company in the world. Monster. Coke. Redbull got into F1 for marketing. The list goes on and on.

Liquid Death is literally paying for these hype op-ed pieces on top of their novelty marketing just to further convince people and create a self perpetuating feedback loop. Just like every other canned beverage company before them, and every other to come. No one has a secret sauce. It's marketing 24/7.

BrianGragg2• 2 years ago

Slight difference in the companies listed all contain addictive substances and the other just contain water.

AdamJacobMuller6• 2 years ago

Coke and Monster manufacture their own beverages. So does Redbull (kind of).

aiauthoritydev23• 2 years ago

I bought it only once. In fact the label made me think that it was carbonated water for some reason. I bought it and drank it and realized I was scammed. Since then I judge people who buy this crap.

wnevets• 2 years ago

Are you sure you didn't buy the wrong product?

https://liquiddeath.com/products/sparkling-water

ethanbond• 2 years ago

They do sell sparkling products, including IMO the best-tasting flavored sparkling waters on the market.

Agreed flat water out of a can is… not my favorite.

MisterBastahrd• 2 years ago

They sell a carbonated version, and a few flavored versions.

I still buy the carbonated (black can) from time to time. I didn't buy it sooner because I was under the assumption that "Liquid Death" would also be caffeinated, and I couldn't imagine an unflavored caffeinated beverage tasting good.

AdamJacobMuller6• 2 years ago

Yeah I originally thought it was carbonated as well when I first saw it (which I drink a lot of). Never had the misfortune of buying one though.

nickthegreek• 2 years ago

Not reading the can doesn't mean you were scammed.

tcdent• 2 years ago

It is spring water.

There is really not much competition. Aside from Fiji and Mountain Valley, almost everything else is filtered municipal supply.

hermitcrab8• 2 years ago

Convincing people to spend $2/can for filtered tap water is impressive.

In the same way that building a death star would be 'impressive'. ;0)

AdamJacobMuller6• 2 years ago

I would be massively impressed by anyone who could build a death star. Imagine what someone like that could accomplish if they put 10% or 1% of their ability and output towards something good.

coffeebeqn3• 2 years ago

I guess a can is better than cheap plastic that leeches into the water?

mint2• 2 years ago

Cans are lined with plastic.

Canned water is a plastic membrane holding water with aluminum on the outside for structural integrity.

Same with boxed water but cardboard replaces the aluminum.

infecto5• 2 years ago

Cans are lined with plastic though. Now you could make an argument that less plastic is used but your water is still touching plastic.

UncleOxidant• 2 years ago

built an effective marketing apparatus which entices people to pay a premium for their canned water.

And they did that by calling it Liquid Death. Never makes sense to me, but I guess I'm not the target demographic.

tennisflyi• 2 years ago

Yes and this explains everything. Not sure of the reason for your last sentence

Solvency2• 2 years ago

"Valuation" is the same reason Tesla is "worth" an absurd amount of money well beyond its means. It's all bullshit.

No one is buying this crap. Just because you see it on shelves and in chain stores doesn't mean anything.

I have friends at Walmart. Pavilions. Albertsons. And Wawa (NJ). It's a novelty beverage like any other and any speculative valuation about it is just meme financebro shenanigans.

skyyler• 2 years ago

Are your friends "at Walmart. Pavilions. Albertsons. And Wawa" cashiers or something?

If they had access to sales data they'd know this stuff is flying off the shelves in a confusing way. It's just edgy marketing fizzy water. But it's extremely popular with early 20s dudes right now.

BrianGragg2• 2 years ago

I don't see stores continuing to stock items that don't sell long term and this product has been around long enough for the stores to realize this and stop stocking a non selling product. So in saying that I have to disagree with your observation.

hermitcrab8• 2 years ago

Supermarkets are data driven and ruthless. I don't see them putting anything on their valuable shelf space for more than a few weeks if it doesn't sell.

keybored• 2 years ago

A^w I buy a fair amount of carbonated bottled water. Like coffee and beer: something I would have hated as a child.

williamcotton• 2 years ago

My kids have always loved seltzer!

ryanwhitney• 2 years ago

I hated this brand when I first saw it. The epitome of marketing bullshit: make water look edgy/cool/etc.

But overall, the fact that it comes in aluminum cans does seem like a good thing in comparison to bottle water. No idea what the environmental (weight?) tradeoffs are compared to shipping plastic bottles though.

hnhg• 2 years ago

The inner lining of aluminum cans is usually plastic, I believe.

steveklabnik10• 2 years ago

In this case, Liquid Death makes it a point to have zero plastic: https://liquiddeath.com/pages/death-to-plastic

paulpauper2• 2 years ago

that also means you cannot store it after being opened. at least bottled water can be stored

yayamo2• 2 years ago

Ball corporation, the largest manufacturer of aluminum cans, commissioned a study of the environmental impact of aluminum cans against cartons, PET, and glass:

https://www.ball.com/getattachment/85d9e3af-e3aa-4b93-a687-5...

and if you go to page 121, you can see figure 5-6 "Global Warming Potential [kg CO2 eq.] per gallon of fill volume, cradle-to-grave incl. transports, US, TRACI 2.1" which shows that for non-carbonated beverages the 16.9 oz clear PET bottle has the lowest total lice cycle impact, by a fairly large margin. The paragraph following the figure:

"The 16.9oz PET bottle for non-carbonated water has the lowest impact overall due to its extremely thin-wall design. The second place among non-carbonated drinks packaging is a close match between aluminum cans and beverage cartons, with very similar overall burdens. Glass bottles, by a large margin, come in last. Among options for carbonated drinks, aluminum performs strongest, followed by PET bottles and finally glass. The low mass and high recycled content of aluminum cans enable consistently low impacts of this packaging format. The lightweight nature of the PET bottles make them a highly efficient packaging format, where the majority of climate change impacts are coming from the fossil-based raw materials"

Learned this recently and found it surprising!

kube-system2• 2 years ago

CO2 is only one measure of environmental impact. Pollution is a very big problem for disposable beverage containers, and the good thing about aluminum is that it is highly recyclable and also has a significant enough scrap value that it incentivizes collecting the waste instead of discharging it into the environment.

This is (unsurprisingly!) also in that source:

Aluminum cans have relatively high MCI scores of ~0.7, which reflects the highest average recycled content (55% of can stock, 3% of end and tab stock) and end of life recycling rate (69%) of all beverage packaging materials.

porkbeer• 2 years ago

I personally like that they list their ingredients instead of shady hand waving like most flavored waters seem to. No, i will not accept zero calorie 'essence' as a real thing (likely unregulated sugar alch) and nor should you.

xnx2• 2 years ago

I like the 16 oz cans and their labels are cool, but nothing nails the combination of flavor and calories like Spindrift. Unfortunately, I've never seen Spindrift tallboys at retail.

coffeebeqn3• 2 years ago

That’s my go to as well. It doesn’t have the gross artificial flavor of 0 cal seltzer waters because it’s real fruit but in small amounts

xnx2• 2 years ago

My only disappointment is I don't know of any generic/store-brand clones of Spindrift. Plenty of zero-calories seltzer clones, but none that use a little bit of real fruit juice.

themark• 2 years ago

Because when you are at a rock concert and you want something light to drink, it is cooler to ask the bar tender for Liquid Death rather than a Perrier.

hermitcrab8• 2 years ago

"because the brand is what’s important; the brand is all there is"

With enough marketing and a bit of luck, you can sell anything. Even something as unneccessary[1] as a canned water. Welcome to late stage capitalism.

It's worth learning a bit about marketing to recognize how marketing pushes our buttons. It won't make you immune, to does help you to understand when you are being manipulated. This book is a good start:

"Influence: The Psychology of Persuasion" by Robert B. Cialdini

[1]For most people reading this.

friend_and_foe• 2 years ago

I had a realization a while back: nobody sells products anymore. Even the products are part of a marketing campaign. Think of this. Burger Joint comes out with a new burger. They advertise it endlessly, you go to the joint and buy one and give them your money. Would they take your money without giving you anything at all if they could? Of course they would, but that doesn't work. They have to give you something.

The "product" is nothing more than the last mile of a marketing campaign. They don't care about the product, only the revenue. Almost no product is created today that is designed solely to meet an existing market need, they're all crafted as part of a holistic marketing campaign. The product doesn't matter, only that you give them money. People naive enough to not know this and start with creating value are probably laughed at inside marketing and MBA circles worldwide.

hermitcrab8• 2 years ago

Yes. Watch a modern car ad. The car hardly features. No mention of miles per gallon, boot/trunk space or warranties. It's all beautiful people doing beautiful things in beautiful surroundings. "Buy this car and you will become one of them" is piped straight into your lizard brain.

onel• 2 years ago

True. But that's why good marketing had never been about the product. It has always been about how it makes you feel. You take a grouo of unhappy people and you can sell a lot of things to them if you phrase it right.

You made me curious about that book

neilv• 2 years ago

When I saw Liquid Death on the shelves of WFM, I thought maybe it was targeted at health-nuts and non-alcohol-drinkers wanting something to drink in social situations when people were drinking beer, without "just water, thanks".

With what people are conditioned to pay for drinks at bars and restaurants, paying for water substitute is easier. (Not everyone wants to burp club soda.)

As for bottled water in general, I never would've considered it until a few years ago, since city tap water used to always be fine for me... but personally I'm now drinking and cooking with bottled water exclusively, after repeated pipe incidents in my old apartment building made my usual Pur tap filters inadequate.

Also, based on how quickly stock of 2.5gals of Poland Spring and other brands seem to move from local store shelves, in neighborhoods of student doctors and scientists living in dodgy old buildings... I suspect I'm not the only one who decided that plastic byproducts (and the occasional injury from shuffling around 2.5gals) seemed safer than drinking out of some of these old building pipes.

(Also, there's conditions like Detroit's tragic lead problem. Even the local water authority for my HCOLA recently had a problem with PFAS.)

kshacker• 2 years ago

I suspect I'm not the only one who decided that plastic byproducts (and the occasional injury from shuffling around 2.5gals) seemed safer than drinking out of some of these old building pipes.

We decided on an RO (Reverse Osmosis) system along with a filteration system. Based on what we spend annually maintaining the system, sometimes I wonder if we would not be better off just going bottled water (bulk, from Costco) with less of an overhead, and it is a close call ... although I do not know what it will cost to buy water in bulk, and I guess I still may need a filteration system for bathing.

ilrwbwrkhv• 2 years ago

I know people are making fun of this brand because most engineers think they are above marketing and people should only buy the constituent product.

What liquid death has done is to provide water in an environment where everyone else is drinking a hard drink. Also the can and branding makes you feel you are having more than water. It is a market need and it is being filled by this company.

That is why the founder will make more money than many FAANG engineers will make in their lifetime combined.

steveklabnik10• 2 years ago

Yes, threads like these really remind you of the bias HN has. There's tons of great businesses that engineers will dismiss completely. Oh well!

hn_user82179• 2 years ago

I was recently at a party where a subset of us weren't interested in drinking (all of us were watching calories, so like mocktails/juices weren't a great option). It was a bar where everything was sold by the can (no mixed drinks). We all separately ordered and to my surprise we all ordered Liquid Death in spite of other seltzer waters, such as La Croix, being available. Whatever marketing they're doing is working. Sometimes it feels like not drinking is a "statement" so it's nice having a lowkey non-alcoholic option.

ncrmro• 2 years ago

The severed lime is sweetened with agave and has a bit more sugar that regular flavored sparkling water which makes them a nice way to get a small amount of sugar.

throw0101b• 2 years ago

If you think that's weird (2019):

Moses Lam and Troy Paquette are capturing, compressing and commercializing something most Canadians take for granted — fresh air.
The pair of Alberta entrepreneurs made headlines back in 2015, largely as a curiosity. Their company, Vitality Air, was reminiscent of the fictional cans of "Perri Air" from the movie Spaceballs.

* https://www.cbc.ca/news/canada/calgary/alberta-vitality-air-...

How is a company that sells canned water worth $1.4B?

Related Stories