Episode 82 – Liquid Death – The Latest Skate Ramp Winner


NOVEMBER 15, 2022


My 14-year-old son doesn’t get it. Neither did I, initially. We’re not the audience for Liquid Death. We rarely consume bottled water anyways, so that accounts for most of the disconnect. 


Why do such extreme branding in a boring category, many have asked?


Because it’s boring! That’s why! To get attention for a low awareness brand.


Because no one takes any risks in bottled water, so bold is wide open. Unlike alcohol. Or beer.


Everyone is so damn serious in water. Everything is functional (Essentia) or status-oriented (Fuji).


I can’t think of a better case study for Marty Neumeier’s positioning theory than Liquid Death- when they zig, you zag. Check out Marty’s book of the same name.


Pick a unique, underserved audience and design for them. It might help to really know the audience well. Honestly, this IS the story of some of the most successful premium consumer brands, where the founder was the initial niche audience. Gary Erikson of Clif bar is the most well known in food. 


Most consumer brands scale based on attribute-based symbolism, not just by selling in to retailers. But some of the most successful used clever marketing to get awareness to build with highly predisposed folks.


In order for marketing to really work well, it needs to build awareness months and years ahead of purchase. And this is precisely where everything gets completely ass backwards in early-stage brand building. 


The culprit? Historically, the primary social network to find stakeholders and assistance as an amateur CPG entrepreneur was a series of trade shows we all know well. 


In fact, Expo East 2022 just wrapped. A trade show is where the sales teams get the spotlight. And, before e-commerce became 10% or so of premium CPG sales, retail sales always had an advantage in dominating the growth conversation in a CPG startup.


When you’re only in 200 stores, it’s pretty obvious that you’ll need to add a lot more stores if you want to be the next Annie’s or Popchips, or Bai. Brands an expand velocities from 1 U/S/W to 40 U/S/W but not to 10,000 U/S/W. Not even Frito-Lay. And because of this largely institutional bias, the operational energy required to grow accounts and ACV tends to overwhelm most small teams (especially when they’re new to the industry). It’s basically all they end up doing. 


In the process, what gets lost? Awareness building. Awareness build gets relegated to stale IG posts and B2B PR (or not even that in some cases) and some obligatory founder demoing at this or that retailer. By the time marketing has a dedicated budget with a non-founder leader, sales has already built the business and taken advantage of whatever intrinsic design advantages the core products have revealed to the public. Sales basically gets the resources first, so it’s not shocking that what emerges is a really lopsided sales-dominant internal culture. Any scrap of unexpected profit gets sent to the trade marketing budget, often for years.


Clearly, DTC is upending this balance of power in Phases 1-3. Liquid Death has been the most dramatic example of focusing on marketing spending initially to see if they could generate virality, move traffic to a website and get pre-orders. That’s a very smart, scientific approach, by the way. But not something I’d recommend outside of a category like, well, water, where brand identity alone has billions in market share to play with. If we step back and think about it, as Mike Cessario did, bottled water sells with no real symbolic processing by the consumer other than trademark recognition and price. I mean the crappy plastic brands. Yes, there are value-added segments. Mineral water (Perrier), Alkaline water (Essentia), and specialty origin water (Fuji) have their leaders. But most bottled water is consumed as mindless hydration, making it the epitome of a mindless consumer category. It began primarily as a portable water solution for Soccer Moms in the 1990s. In Arizona, we keep this stuff in our vehicles to save our lives if our car breaks down between Tucson and Phoenix (a reasonable approximation to Tattoine). 


Starting with millions available for advertising is not generalizable to most startups, yes, but Liquid Death demonstrates what happens when you build a frenzy of highly memorable awareness years ahead of showing up in someone’s local stores. First, the true core audience bought directly off the website early on. And it still took Liquid Death over a year to get its store count up into the 1000s, even with $9M in Series A funding on board in February of 2020. Retail just has built-in inertia you can’t get past, even without a pandemic. But this structural ‘delay’ only gave the Liquid Death PR and advertising machine more time to soak our minds ahead of its arrival. The brand turned on the most recent 20,000 doors (including lots of C-stores) to young people pre-loaded with the slogan and trademark and brand identity. Why not mock the ‘rules’ of bottled Soccer Mom water? Founders don’t need to do this level of advertising to get exponential growth, but it shows how marketing can actually lead the sales team when you’re highly capitalized and brave. 


What Liquid Death ironically reveals is that the old sales-dominant team cultures of natural CPG companies are more a result of initial under-capitalization than a true necessity. When you’re broke, B2B retail sales seem like the best way to place your bet. This isn’t always the case for those who can’t get meetings, though! They run out of time to generate performance metrics that attract money and allow them to keep the lights on. 


Historically, the ‘talent’ available to early-stage consumer brands was anemic at best. Often there was a person who was head of sales and marketing. And we know he favored the former and knew little about the latter.


In the past 15 years, however, a mass exodus of trained talent left major ad agencies and started their own. But, increasingly, these creative refugees are starting consumer brands in categories that lean heavily on brand identity or that require clever arguments to communicate difficult, emerging solutions to everyday problems. 


Still, the average marketing person at early-stage companies is more interested in marketing than great at doing it. And they simply lack the training environment to accelerate learning. Moreover, no one is enforcing known behavioral metrics to put pressure on early-stage marketers to deliver powerful creative that hooks emotionally and tells a persuasive story. 


The best CPG salespeople can tailor their ‘pitch’ to the buyer in question. They do it mostly by listening and asking upfront at the initial meeting. They also do pre-meeting research and rehearsal.


Marketing benefits even more from audience-specific empathy. I still meet far too many folks running startup marketing who have no behavioral insights and think their job is to amplify the company’s version of what the brand means to as many people as possible. 


No one has informed these poor folks that this is not how effective marketing works and it definitely is NOT how you do marketing on a budget.


What Liquid Death reminds us is that building awareness before distribution in very crowded categories can generate very fast exponential growth – 4 years to $100M. But to do this you have to amazingly cunning creative messaging and branding. Recently, much of this powerful work has been male-oriented, but that, to me, is an accident more or less. 


Or maybe it’s not.