Liquid Death May Just Be The 'Fastest Growing Non-Alcoholic Beverage Of All Time'

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Liquid Death May Just Be The 'Fastest Growing Non-Alcoholic Beverage Of All Time'
Liquid Death Files Paperwork to Raise $15 Million

When Santa Monica-based Liquid Death launched with funding from neighboring venture capital firm Science Inc. in 2018, the Los Angeles startup world – and everyone else – had nothing but jokes. But with the company’s latest $700 million valuation, it appears the joke is on the rest of us.


“We believe Liquid Death may be the fastest growing non-alcoholic beverage of all time,” Science co-founder and Liquid Death board member Peter Pham wrote in an Oct. 3 blog post. “From our research, it took Monster four years and Celsius 12 years to reach the level of retail success Liquid Death has had in just three. Liquid Death is projecting $130M in revenue in 2022, up from $45M in 2021 and is on pace to double next year.”

Liquid Death’s valuation came on the heels of a $700 million Series D round led by Science, which included investors Live Nation, PowerPlant Partners and Hinge Capital.

Since Liquid Death is private, we don’t know their net loss figures.

"We're using Liquid Death's platform, which we built by creating viral entertainment, to shift consumption habits toward health and sustainability," co-founder and CEO Mike Cessario told dot.LA via email Tuesday. "People are stocking up on cases of Liquid Death for house parties and drinking more water at festivals... We've fostered a cult following that's translated into success."

Liquid Death’s website manifesto reads: “We’re just a funny water company who hates corporate marketing as much as you do,” Ironically though, it’s been their marketing approach that’s catapulted Liquid Death to become one of Amazon’s top-10 best-selling water brands.

Part of that approach included jolting the brand to ubiquity. If you’ll recall, the brand was everywhere seemingly overnight from the get-go. This was because the founders saw the value in taking a small loss first to bring their product to the masses – giving tech events cases of Liquid Death to expose people to the brand and, most importantly, get a local tight-knit circle of potential backers talking.

While Liquid Death has long been a staple at LA tech events, it quickly turned that trickle of interest from local startups into a deluge of orders from established retailers, inking distribution deals with national chains including 7/11, Amazon’s Whole Foods, Publix, and Sprouts. 7/11 initially accepted Liquid Death in August 2020 as part of a trial run for startup snack and beverage brands, and the deal stuck. The brand expanded to Publix and Sprouts stores by last December.

The other aspect of Liquid Death’s ingenious marketing campaign was appealing to sober punks or tech bros who still wanted to feel cool at a gig while holding a non-alcoholic tallboy. The brand quickly won over notable now-sober celebrities like Steve-O, who frequently uses the water on his podcast “Steve-O’s Wild Ride,” and helps the company’s mission to make drinking water cool.

It helps that Cessario is a former creative director for Netflix who knows the power of a good celebrity ad campaign. Last October Cessario recruited Chace Crawford to reprise his character of The Deep (from Amazon’s hit show “The Boys”) to become the company’s “chief sustainability officer”.

Liquid Death’s also recruited comedian Bert Kreischer, adult film actress Cheri DeVille and rapper Wiz Khalifa to do promos. Two years ago, Liquid Death surprised the advertising world by turning negative reviews into a heavy metal album for sale.

The metal album “Greatest Hates” was an attempt to turn bad publicity into sales, and it mostly worked. The album wasn’t a chart-topper, but it certainly got people talking about the product on social media, even the haters. They later doubled down with “Greatest Hates: Vol. 2” the same year, featuring more angry reviews. And a month ago, the brand signed a “pro waterboy” for $100,000 in an act that further solidified their tendency toward irreverent marketing campaigns.

One could even argue that the water brand’s marketing strategy has been so effective, it’s kept most consumers from asking thornier questions about Liquid Death’s business. The company’s calling card is “death to plastic,” but aluminum isn’t exactly sustainable, either.

Still, it remains to be seen if Liquid Death can take over the beverage industry. It is, after all, just one company competing against giants like Nestle, which owns a portion of the upscale water market with holdings in Perrier and San Pellegrino. Not to mention Coca-Cola, whose portfolio includes Dasani, Smart Water, and Topo Chico brands. But none of these brands have the “cool factor” Liquid Death is going for, so maybe its bombastic marketing will give these legacy brands a run for their money.

"After just six months in the market, our flavored sparkling waters are outselling Aha, Bubly, Poland Spring and San Pellegrino in stores," Cessario claimed. "We are the No. 1 dollar contributor to the water category growth over the past year in Whole Foods and are the fastest growing still water brand in Walmart over the last year."

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AI Is Rapidly Advancing, but the Question Is, Can We Keep Up?

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
AI Is Rapidly Advancing, but the Question Is, Can We Keep Up?
Evan Xie

One way to measure just how white-hot AI development has become: the world is running out of the advanced graphics chips necessary to power AI programs. While Intel central processing units were once the most sought-after industry leaders, advanced graphics chips like Nvidia’s are designed to run multiple computations simultaneously, a baseline necessity for many AI models.

An early version of ChatGPT required around 10,000 graphics chips to run. By some estimates, newer updates require 3-5 times that amount of processing power. As a result of this skyrocketing demand, shares of Nvidia have jumped 165% so far this year.

Building on this momentum, this week, Nvidia revealed a line-up of new AI-related projects including an Israeli supercomputer project and a platform utilizing AI to help video game developers. For smaller companies and startups, however, getting access to the vital underlying technology that powers AI development is already becoming less about meritocracy and more about “who you know.” According to the Wall Street Journal, Elon Musk scooped up a valuable share of server space from Oracle this year before anyone else got a crack at it for his new OpenAI rival, X.AI.

The massive demand for Nvidia-style chips has also created a lucrative secondary market, where smaller companies and startups are often outbid by larger and more established rivals. One startup founder compares the fevered crush of the current chip marketplace to toilet paper in the early days of the pandemic. For those companies that don’t get access to the most powerful chips or enough server space in the cloud, often the only remaining option is to simplify their AI models, so they can run more efficiently.

Beyond just the design of new AI products, we’re also at a key moment for users and consumers, who are still figuring out what sorts of applications are ideal for AI and which ones are less effective, or potentially even unethical or dangerous. There’s now mounting evidence that the hype around some of these AI tools is reaching a lot further than the warnings about its drawbacks.

JP Morgan Chase is training a new AI chatbot to help customers choose financial securities and stocks, known as IndexGPT. For now, they insist that it’s purely supplemental, designed to advise and not replace money managers, but it may just be a matter of time before job losses begin to hit financial planners along with everyone else.

A lawyer in New York just this week was busted by a judge for using ChatGPT as part of his background research. When questioned by the judge, lawyer Peter LoDuco revealed that he’d farmed out some research to a colleague, Steven A. Schwartz, who had consulted with ChatGPT on the case. Schwartz was apparently unaware that the AI chatbot was able to lie – transcripts even show him questioning ChatGPT’s responses and the bot assuring him that these were, in fact, real cases and citations.

New research by Marucie Jakesch, a doctoral student from Cornell University, suggests that even users who are more aware than Schwartz about how AI works and its limitations may still be impacted in subtle and subconscious ways by its output.

Not to mention, according to data from Intelligent.com, high school and college students already – on the whole – prefer utilizing ChatGPT for help with schoolwork over a human tutor. The survey also notes that advanced students tend to report getting more out of using ChatGPT-type programs than beginners, likely because they have more baseline knowledge and can construct better and more informative prompts.

But therein lies the big drawback to using ChatGPT and other AI tools for education. At least so far, they’re reliant on the end user writing good prompts and having some sense about how to organize a lesson plan for themselves. Human tutors, on the other hand, have a lot of personal experience in these kinds of areas. Someone who instructs others in foreign languages professionally probably has a good inherent sense of when you need to focus on expanding your vocabulary vs. drilling certain kinds of verb and tense conjugations. They’ve helped many other students prepare for tests, quizzes, and real-world challenges, while computer software can only guess at what kinds of scenarios its proteges will face.

A recent Forbes editorial by academic Thomas Davenport suggests that, while AI is getting all the hype right now, other forms of computing or machine learning are still going to be more effective for a lot of basic tasks. From a marketing perspective in 2023, it’s helpful for a tech company to throw the “AI” brand around, but it’s not magically going to be the answer for every problem.

Davenport points to a similar (if smaller) whirlwind of excitement around IBM’s “Watson” in the early 2010s, when it was famously able to take out human “Jeopardy!’ champions. It turns out, Watson was a general knowledge engine, really best suited for jobs like playing “Jeopardy.” But after the software gained celebrity status, people tried to use it for all sorts of advanced applications, like designing cancer drugs or providing investment advice. Today, few people turn to Watson for these kinds of solutions. It’s just the wrong tool for the job. In that same way, Davenport suggests that generative AI is in danger of being misapplied.

While the industry and end users both race to solve the AI puzzle in real time, governments are also feeling pressure to step in and potentially regulate the AI industry. This is much easier said than done, though, as politicians face the same kinds of questions and uncertainty as everyone else.

OpenAI CEO Sam Altman has been calling for governments to begin regulating AI, but just this week, he suggested that the company might pull out of the European Union entirely if the regulations were too onerous. Specifically, Altman worries that attempts to narrow what kinds of data can be used to train AI systems – specifically blocking copyrighted material – might well prove impossible. “If we can comply, we will, and if we can’t, we’ll cease operating,” Altman told Time. “We will try, but there are technical limits to what’s possible.” (Altman has already started walking this threat back, suggesting he has no immediate plans to exit the EU.)

In the US, The White House has been working on a “Blueprint for an AI Bill of Rights,” but it’s non-binding, just a collection of largely vague suggestions. It’s one thing to agree “consumers shouldn’t face discrimination from an algorithm” and “everyone should be protected from abusive data practices and have agency over how their data is used.” But enforcement is an entirely different animal. A lot of these issues already exist in tech, and are much larger than AI, and the US government already doesn’t do much about them.

Additionally, it’s possible AI regulations won’t work well at all if they aren’t global. Even if you set some policies and get an entire nation’s government to agree, how to set similar worldwide protocols? What if US and Europe agree but India doesn’t? Everyone around the world accesses roughly the same internet, so without any kind of international standard, it’s going to be much harder for individual nations to enforce specific rules. As with so many other AI developments, there’s inherent danger in patchwork regulations; it could allow some companies, or regions, or players to move forward while others are unfairly or ineffectively stymied or held back.

The same kinds of socio-economic concerns around AI that we have nationally – some sectors of the work force left behind, the wealthiest and most established players coming in to the new market with massive advantages, the rapid spread of misinformation – are all, in actuality, global concerns. Just as the hegemony of Microsoft and Google threaten the ability of new players to enter the AI space, the West’s early dominance of AI tech threatens to push out companies and innovations from emerging markets like Southeast Asia, Subsaharan Africa, and Central America. Left unfettered, AI could potentially deepen social, economic, and digital divisions both within and between all of these societies.

Undaunted, some governments aren’t waiting around for these tools to develop any further before they start attempting to regulate them. New York City has already set up some rules about how AI can be used during the hiring process while will take effect in July. The law requires any company using AI software in hiring to notify candidates that it’s being used, and to have independent auditors check the system annually for bias.

This sort of piecemeal figure-it-out-as-we-go approach is probably what’s going to be necessary, at least short-term, as AI development shows zero signs of slowing down or stopping any time soon. Though there’s some disagreement among experts, most analysts agree with Wharton professor and economist Jeremy Siegel, who told CNBC this week that AI is not yet a bubble. He pointed to the Nvidia earnings as a sign the market remains healthy and not overly frothy. So, at least for now, the feverish excitement around AI is not going to burst like a late ‘90s startup stock. The world needs to prepare as if this technology is going to be with us for a while.

What the Future of Rivian Looks Like According to CEO RJ Scaringe

David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

What the Future of Rivian Looks Like According to CEO RJ Scaringe
Rivian

Rivian CEO RJ Scaringe took to Instagram last weekend to answer questions from the public about his company and its future. Topics covered included new colors, sustainability, production ramp, new products and features. Speaking of which, viewers also got a first look at the company’s much-anticipated R2 platform, albeit made of clay and covered by a sheet, but hey, that’s…something. If you don’t want to watch the whole 33 minute video, which is now also on Youtube, we’ve got the highlights for you.

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From AI to Layoffs, Here's Why College Grads No Longer Want Tech Jobs

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
From AI to Layoffs, Here's Why College Grads No Longer Want Tech Jobs
Evan Xie

A new report in Bloomberg suggests that younger workers and college graduates are moving away from tech as the preferred industry in which to embark on their careers. While big tech companies and startups once promised skilled young workers not just the opportunity to develop cutting-edge, exciting products, but also perks and – for the most talented and ambitious newcomers – a relatively reliable path to wealth. (Who could forget the tales of overnight Facebook millionaires that fueled the previous dot com explosion? There were even movies about it!)

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