Case Study #4_Cristina Solorzano

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Cristina Solorzano 110566104 MKGT Strategy Case #4: Liquid Death Market Analysis Bottled water consists of both carbonate and non-carbonated water sold in bottles or other water dispensers (Statista, 2024). The global bottled water market size was estimated at $ 303.95 billion in 2022 and expected to grow almost 6% from 2023 to 2030 due to the increasing need of clean and hygienic water that has not been contaminated due to pollution (Grand View Research, 2023). Within the market, single serving sizes are the most popular type of water (Grand View Research, 2023).Furthermore, although the still water has the largest market share in the bottled water segment with mora than 74.5% in terms of revenue, the functional water segment is projected to grow more rapidly at 7% from 2023 to 2030, as consumers are becoming increasingly conscious of their wellbeing and health (Grand View Research, 2023). Geographically, Asia Pacific makes the largest contribution to the global market with a revenue share of 45% in 2022, followed by North America with a share of 23.9%. Speaking of geographics, it is very frequent that brands native to a region will be more popular over imported bottled water brands due to their lower price. Although foreign brands would be present in the country and water is a necessity, people will opt for the cheaper option which are usually national brands, as geographic regulations demand certain amount of minerals and standards to ensure that all water brands are considered safe and healthy (FDA, 2024). Liquid Death currently has a 0.2% if the share in the still water market, and a 1% share in sparkling water market in the US (DiLallo, 2023). Their current market valuation is at $700 million and a yearly revenue of$ 130 million, a tremendous growth since its launch in 2019 (Valinsky, 2022). As mentioned earlier, both the still and sparking water market which Liquid Death forms part of, are projected to grow in the future 6 years. Liquid Death is stationed in the US and sells its products through US grocery retailers such as Whole Foods, 7-Eleven, Sprouts, Publix and GetGo (Liquid Death, 2024). Other countries may have access to the brand through Amazon, however their consumers are mostly in the US (Liquid Death, 2024). Competitive Market Positions The current market leaders for bottled water are Danone S.A, The Coca-Cola Company, and Nestle SA (Mordor Intelligence, 2023). Liquid death is a market nicher, aligning with rebellious, disregard norms that are not afraid to stand out, and to be healthy (Brand Credential, 2023). The brand’s marketing strategies surround people who want to go to raves, bars, and social settings without having to sacrifice their hydration and sobriety, and coolness. The brand uses punk and gothic fonts to attract consumers who might want to drink water more comfortably in a social setting (Brand Credential, 2023).

Product Pioneer or Follower Liquid death is a product pioneer of canned still and sparking water product segmented to young people who are wanting to be comfortable drinking water in a social setting. Water has never been marketed as something cool or in trend, whilst still maintaining its healthy assets. Since its founding in 2019, brands are now following the trend of canned sparkling or functional water yet are still weary of entering the canned still water market as the brand’s pioneering allowed them to position themselves in a way that canned water is now associated primarily with Liquid Death. Competitor Analysis/Assessing Competitors The two competitors being analyzed are La Croix and Topo Chico. These brands are in the sparkling water segment, and additionally the alcoholic beverage segment for the case of the brand Topo Chico. These brands were chosen as they are popular with the young audience market segment, however targeting different niches. La Croix targets millennials and young adults that are looking for alternatives to sodas (Hill, 2021). Topo Chico is a brand that produces hard seltzers as well as sparking water. Although their hard seltzers are mostly known in the younger audience, their sparking waters bottled in glass containers are marketed to millennials and older adults (Valencia, 2016). We begin the competitor analysis with La Croix with the following depiction of their strengths and weaknesses (LaCroix, 2024): Strengths Weaknesses - Flavor variety. - Health-Conscious Branding (zero sugar, zero calorie, naturally flavored) - Strong Brand Loyalty - Distribution network in supermarkets, convenience stores and online retailers. - High competition fighting for market share. - Premium price - Limited market expansion outside of the US market. Similarly, we now analyze Topo Chico’s strengths and weaknesses in the following table (Topo Chico, 2024): Strengths Weaknesses - Brand Heritage (19 th century) - Versatility (hard seltzers and still water) - Distinct mineral profile from Mexico - Limited flavor variety compared to other sparking water brands. - Premium price - High competition fighting for market share

Marketing Objectives, Characteristics and Components of Strategic Marketing According to the marketing objectives and strategies for new product pioneer's matrix, Liquid Death is opting for a niche penetration strategy. Instead of pursuing to capture the entire market, Liquid Death’s efforts are centered on Gen alpha, Gen Z, and young Millennials (Raj, 2023). This strategy was successful as Liquid Death became a pioneer in targeting this certain niche, and therefore holds the leading share in the target segment. As the target segment are the drivers on trends in the market, the adoption rate of Liquid Death was fast and easy as shown by their 3.8 million followers on TikTok and almost 3 million followers on Instagram in less than five years since its launch (Raj, 2023). Their production process is easy yet innovative as water is usually packaged in bottles instead of cans. However, although the process is already established Liquid Death needs to invest in premium water sources and packaging to differentiate themselves. Having also limited marketing skills and resources in the beginning, they relied heavily in partnering with influencers in the alternative and punk music scenes to promote the brand and its products (Robertson, 2023). However, their true differentiation came from their edgy branding slogan “Murder your thirst ” that is used in the production of their catchy, humorous, and even dark social media content (Robertson, 2023). A good strategy they used was heavy advertising directed at the target segment, that completely embodied and resonated with the interests of said segment. As time went on and Liquid Death’s initial success began to slow down, the brand released a variety of sparkling water flavors to continue to appeal to their target segment (Liquid Death, 2024). Furthermore, they release limited-edition cans and merchandise, and now even flavored iced tea, which fuels the sense of belonging of the target segment (Brand Credential, 2023). Ironically, the problem is that the brand grew too fast due to its incredible marketing and branding, which has not allowed the brand to be as profitable due to their inability to cut their manufacturing costs (Sorvino, 2023). Competitive Strategies Liquid Death advantage to the previously, identified competitors is their connection with their target audience. The brand utilizes phrases and packaging that embodies their target segment to a T. Instead of having the customers come to the brand, Liquid Death went to the customers (Berry, 2023). The brand started partnering with music festivals to utilize the festivals as an exposure opportunity for their intended niche. Furthermore, Liquid Death differentiates itself from its competitors by rejecting tradition and opting for out of the box and eccentric marketing campaigns that gather the attention of their targeted audience, even if it meant upsetting other audiences (McKessy, 2023). To their target audience this is perceived as a brand who is all in in their own persona showing authenticity and even defiance, which are elements

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that the target audience admires. These competitive strategies are completely sustainable as they are not seen as trends or fads, but part of the brand’s personality. It is somehow expected for the brand to act this certain way and continue breaking the barriers of tradition. Market Development Liquid Death has recently entered the iced tea market in May of last year with three different flavor options (McCarthy, 2023). As usual, the branding relies on shocking and playful world play that even prompted a lawsuit (McKessy, 2023). Their strategy consists in maintaining their brand identity, whilst still adding the “premium” aspect to their products. Their iced teas contain agave nectar for sweetness, caffeine, and the recommended daily number of vitamins B6 and B12 (McCarthy, 2023). This is a complete differentiator from their direct competition Arizona that relies on their sugary flavors and their low-price points. So far, this strategy seems successful as the brand can enter the already saturated market with a completely different product proposal. References FDA. (2024). Bottled water everywhere: Keeping it safe . U.S. Food and Drug Administration. https://www.fda.gov/consumers/consumer-updates/bottled-water-everywhere-keeping-it- safe#:~:text=The%20U.S.%20Food%20and%20Drug,they%27re%20safe%20to%20drink . Grand View Research. (2023a). Bottled water market size, share & trends report, 2030 . Bottled Water Market Size, Share & Trends Report, 2030. https://www.grandviewresearch.com/industry-analysis/bottled- water-market Statista. (2024). Bottled water - worldwide: Statista market forecast . https://www.statista.com/outlook/cmo/non-alcoholic-drinks/bottled-water/worldwide DiLallo, M. (2023). Investing in liquid death stock Pre-IPO . The Motley Fool. https://www.fool.com/investing/how-to-invest/stocks/how-to-invest-in-liquid- death/#:~:text=What%20is%20the%20market%20share,1%25%20share%20in%20sparkling%20water . Valinsky. (2022). Liquid death canned water company is now worth $700 million. https://www.cnn.com/2022/10/04/business/liquid-death-water-valuation/index.html Liquid Death. (2024). Murder your thirst . https://liquiddeath.com/ Mordor Intelligenece. (2024). North America Bottled Water Market Size & share analysis - industry research report - growth trends . North America Bottled Water Market Size & Share Analysis - Industry Research Report - Growth Trends. https://www.mordorintelligence.com/industry-reports/north-america-bottled- water-market Brand Credential. (2024). Liquid death marketing strategy case study: Slaying the beverage industry with killer branding and marketing . https://www.brandcredential.com/post/liquid-death-marketing-strategy-case- study-slaying-the-beverage-industry-with-killer-branding-and-marketing

Valencia. (2018, March 27). Topo Chico is becoming the most popular imported sparkling water in the southwest . KJZZ. https://kjzz.org/content/10461/topo-chico-becoming-most-popular-imported- sparkling-water-southwest LaCroix. (2023, August 8). Home . https://www.lacroixwater.com/ Topo Chico. (2024). Topo Chico Mineral Water: Bottled sparkling mineral water . TopoChico. https://www.topochico.com/ McKessy, J. (2023, November 29). Canned Water Company Liquid Death Rebrands “armless Palmer” drink after lawsuit threat . USA Today. https://www.usatoday.com/story/money/food/2023/11/29/armless-palmer- name-change-dead-billionaire/71742963007/ Sorvino, C. (2023, April 28). Even with a $700 million valuation, liquid death may need a lot of luck to become liquid gold . Forbes. https://www.forbes.com/sites/chloesorvino/2023/04/14/even-with-a-700-million- valuation-liquid-death-may-need-a-lot-of-luck-to-become-liquid-gold/ Robertson, G. (2024, February 4). Liquid death case study: The disruptor brand that big brands can’t duplicate . beloved brands. https://beloved-brands.com/liquid-death/

Case Study #4_Cristina Solorzano

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