Mgk liquid death12/27/2023 ![]() ![]() 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 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. ![]()
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