These kids aren't cracking open beers.

They're hydrating.

With Liquid Death, a water brand that ditched the serene mountain springs, first 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.

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.

And that strategy has a lot to do with a 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 that's incredibly different about our water or our products.

But there really is nothing incredibly different of any product almost anywhere.

It's all just brand differences and packaging differences.

That's why people buy things.

Liquid Death CEO Mike Cesario wanted to compete with luxury brands like Fiji and Evian.

We're premium.

You have to be.

But we don't want to be far and away the most expensive thing on 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 matter of seconds when it to consumer marketing.

Those are seconds that marketers will spend millions of dollars trying to buy from you.

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 distributing your ads.

This paved the way for a move into physical retail, like grocery stores, convenience shops and bars.

A really good thing of distribution that they've done is getting into bars quite early on.

You know, we don't really see that so much with the newer soda brands, for instance, which prioritize retail and wholesale.

The company targeted audiences in places where it would want 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 see our marketing elsewhere, then or the next time they're in a store, like, oh, there's that water that I had at the concert.

In just a few years, Liquid Death has become one of the most followed beverage brands worldwide, outpacing luxury water brands and trailing energy drink giants Red Bull and Monster.

And the company has secured distribution in 113,000 retail locations in the U.S. and U.K., with retail scan 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 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.

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.

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 packages called Death Dust.

The minute you go into the world of flavor and texture in 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.

Today, the company says the majority of their sales come from sparkling flavored water and iced tea.

Over 60, 70 percent of our of our business now is not plain water.

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.

It also sells things like an almost $6,000 cold plunge, a $250 murder whole 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 they're spending 30 bucks on a t-shirt and we're selling out of it.

We've sold over a million dollars worth of Liquid Death gold watches.

The brand means something more to people than just like 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.

But as trends shift and new brands emerge, Liquid Deaths does risk becoming flat.

It's just going to be really interesting to see as a brand like this get 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.