Company Background:

Liquid Death is a canned water company founded by Mike Cessario. Its tagline is "murder your thirst". The drink began selling to consumers on its website in January 2019. Its manufacturer is Supplying Demand, Inc. As of October 2022, the company is valued at $700 million, though the valuation could be viewed "sceptically" as it was an insider-led round.

The initial product was sparkling water. It is sourced from the Austrian Alps where it was also canned. Liquid Death also introduced four flavoured carbonated beverages including Mango Chainsaw, Severed Lime, Convicted Melon, and Berry It Alive. Unlike their unflavored seltzer these flavoured carbonated beverages ("sparkling waters") are actually akin to all-natural, low-calorie sodas as they not only contained added natural flavourings/extracts but also acidulants and some added sugar (from agave nectar) as well. The sugar sparkling waters each have around 20 calories. In March 2023, the company announced sale of three tea flavours: Grim Leafer, Rest in Peach, and Dead Billionaire. Dead Billionaire was originally called Armless Palmer, a play on the popular iced tea and lemonade beverage Arnold Palmer, but after an unnamed enterprise threatened to sue the company for commercial use of the Palmer name in November 2023, Liquid Death announced the name change to Dead Billionaire, taking a jab at the late golfer.

Mike Cessario, a graphic designer, was inspired to create Liquid Death after watching a Vans Warped Tour in 2009, in which concert goers would drink water out of Monster Energy cans to stay hydrated. Cessario stated he wondered why no one had marketed water in a manner similar to Monster. So, they sell their drinks in a 16.9 US fl oz (500 ml) "tallboy" drink can. It is branded like a craft ale (e.g. using heavy metal and punk rock music tropes).

Initially sold via its website. Cessario stated the brand was initially marketed towards straight edge adherents and fans of heavy metal music and punk rock. Then, Cessario stated the company's plan was to expand to bars, tattoo parlours, and certain barber shops in Los Angeles and Philadelphia as a "lifestyle play". In February 2020, the brand expanded into Whole Foods Market in the United States, where according to Eater it became "the fastest-selling water brand on its shelves' '. In August 2020, the brand expanded into two hundred 7-Eleven stores in the Los Angeles and San Diego markets as part of a trial run. As of December 2021, the drink began selling in large supermarket chains such as Publix and Sprouts stores.

Cessario stated that the company's revenue rose to $45 million in 2021, with revenue projected at $130 million for 2022.

Marketing Approach:

The company has a history of innovative marketing approaches. In May 2020, the company released Greatest Hates, an album of death metal music created with lyrics from hate comments the company received online. A second album of hate comments, described as "punk rock", was released in November. In February 2022, during Super Bowl LVI, the company released an advertisement featuring children enjoying the beverage with Judas Priest's song "Breaking the Law". Parodying advertisements for alcoholic beverages, the advertisement ends with the tagline "Don't be scared, it's just water".

Murder Head Death Club (MHDC) NFT Collection - The Basics:

In March 2022, Liquid Death announced the opening of its presale list (or Murderlist) for its first limited-edition NFT collection of 6,666 unique severed heads. The Muderlist gave interested buyers the chance to get to the front of the line before the NFT minting later that month.

The collection features art by Will Carsola. NFTs from the collection were available to mint for 0.0666 ETH. The collection sold out in under three hours. This raised 444 ETH (or $1.5m, measured at the time of the release).

To date (Nov 2023), the collection has also traded for 869 ETH on the secondary market. Liquid Death takes 6.66% creator royalties. This has raised approx. 58 ETH (or $129k, at the average ETH price between April 1 2022 and the present date).

Charity:

Every time a Murder Head is sold, 10% of the royalties will be donated to non-profits like 5Gyres and Thirst Project who are helping to kill plastic pollution and bring clean drinking water to people in need. Per the above calculation, this has raised approximately $13k for charity.

Holder Benefits:

Each NFT holder receives benefits. These include:

• Access to a private Discord community, where they can offer input on brand marketing, flavour ideas and other suggestions for the company

• Access to virtual events

• First access tickets for live IRL events (entrance to the Liquid Death Country Club at the biggest Live Nation events and invitations to “super fancy secret parties”)

• NFT-branded merch drops

• Discounts from the Liquid Death site

• The chance to be featured in a Liquid Death commercial, have their face tattooed on Liquid Death’s CEO, be the company’s CEO for a day, and much more

Incentivising the Most Loyal Holders:

In addition, Liquid Death incentivised customers to buy multiple NFTs by offering tiered benefits, such as:

• Holders of one Murder Head receive a 10% discount at the Liquid death site.
  However:

  • Holders of 10 or more receive a 20% discount

  • Soul Mates (see below) also receive a 20% discount

• Those with 6 or more will receive a NFT of one human soul from the company’s collection

• Those with 66 more can have their NFTs featured on product packaging, in addition to other surprises

Surprises:

The company focuses on surprising (and delighting) their loyal customers. For example:

• Holders of a Murder Head with super-rare traits receive a 30% discount at the Liquid Death site

• Membership comes with weekly surprises and giveaways (announced on the MDHC Twitter account). These typically related to free giveaways of Liquid Death or MHDC merchandise. In the last couple of weeks, they have included:

  • “This holiday, replace your traditional elf skin wrapping paper with our 100% cruelty-free faux elf skin. You’ll be amazed at how closely it looks and feels like real elf skin.” - Christmas wrapper paper worth $24 for the owner of MHDC #3925

  • “Introducing our most exciting advancement in thirst slaughtering yet: The Slaughter Bottle. Originally it was just a Liquid Death can with a dream of dismembering thirsts repeatedly until the earth gets sucked into the sun. It trained. It bulked up. It underwent dangerous experimental procedures at the hands of our least ethical scientists. Now, this towering, hulking drinking vessel is armed with a lid allowing for eternal reusability and brutally murdering thirsts from now until the end of time. It’s the last water bottle you’ll ever need.” - Drinking bottle worth $42 for the owner of MHDC #5058

Creative Commons (CC0) Licence:

The MHDC collection was released on a creative commons (CC0) licence. This means that not only customers get to own their unique NFT, but they get to utilise the artwork for their own purposes. Per Liquid Death - “Use it as a centrepiece at your next family dinner, or turn it into a Christmas ornament for all to enjoy. The choices are only limited by your imagination.” They even give customers a place to advertise their MHDC-branded products. Examples of holders’ products marketing on the site include MHDC playing cards and sticker packs. This is a great approach. It gives the loyal customer the opportunity to monetise the creativity and power of the Liquid Death brand. However, at the same time, it allows Liquid Death to proliferate their brand with little/ no additional marketing spend. The risk to their brand reputation is limited because the approach is aligned with their rebellious approach.

Approaching web3 in the Right Way:

After the launch of MHDC, Cessario (the CEO) admitted being new to web3. He became interested in ways to implement the technology after hearing about opportunities from various business partners. He noted that he also worked to get more involved in the web3 community in order to create an NFT line that wouldn’t come across as a brand simply trying to cash in. “We really took the time and completely immersed ourselves in the world and tried to understand the community there, what they want, what they think is lame, what they think is awesome, and really understand that we’re not going to try to come in here and force something in there as a brand,” he said. “We wanted to truly build something that we know the community will actually be really excited about and surprised that a brand is actually behind it. As soon as they hear ‘oh, a brand is doing an NFT’ the legit NFT communities are kind of like, ‘oh, it’s gonna be some [B.S.] thing.’ They don’t like when people are not taking it seriously.”

In particular, Cessario said he saw a connection between the NFT community’s focus on art and Liquid Death’s connection to underground music and subversive visuals. The company enlisted Carsola, who previously directed the Liquid Death’s mid-length horror film Dead Till Death, to design unique severed head art for the NFTs that was simultaneously cartoonish and macabre. “I don’t ever want to make marketing,” Cessario said. “It’s like corporate art – that’s kind of what marketing is – very safe, creative stuff that does a thing. But if you go into real contemporary art museums, there’s gnarly stuff in there, and that is what real art is. So we’re trying to play in some space that is as close to real art as we can get, while being able to still be a major brand that retailers aren’t going to freak out about.”

Cessario said he wasn’t concerned about the comments however, suggesting that most new technologies are poorly understood at launch and that most of the response to Murder Head Death Club has been positive. Although he acknowledged the environmental impact the electricity usage for minting NFTs is currently high, he added that there are currently efforts to reduce the carbon footprint of the technology and that “in the long term it is going to work out.” As for the upset consumers, Cessario said he’s not concerned about losing shoppers and that they’re likely a small minority who will be against NFTs no matter what.

It is worth noting that, since Liquid Death launched MHDC, Ethereum has transitioned to the Proof of Stake model for securing the blockchain. This has eliminated over 99% of its energy consumption. It is worth further noting that Proof of Work (used by blockchains such as Bitcoin) is increasingly becoming environmentally positive - e.g. incentivising investment in renewable energy, balancing grids, utilising wasted and stranded energy (e.g. flared gas), reducing harmful emissions, and making use of the heat that it produces (e.g. distilling water and heating public infrastructure), etc.

“If we think long term, the good these things can do, the value, where these things will even be a year from now – it’s absolutely a game changer,” he said. “And it’s something that every brand and every company should absolutely be taking seriously. Just like people wrote off social media in the early days.”