Business worth millions: Start-up sells Austrian water at high prices in the USA: Expert uncovers brazen marketing lies

It's nothing new for companies to pump water from somewhere, bottle it, and ship it around the world to sell at high prices elsewhere.

Business worth millions: Start-up sells Austrian water at high prices in the USA: Expert uncovers brazen marketing lies

It's nothing new for companies to pump water from somewhere, bottle it, and ship it around the world to sell at high prices elsewhere. Nestlé, Danone, Volvic and Co. have been earning billions in this way for years - regardless of the ecological and social consequences that this entails.

However, it is not only large corporations that take advantage of the lucrative business with essential goods. The US start-up "Liquid Death" (in German: "Liquid Death") sells Austrian water in aluminum cans at high prices in the USA - and with great success. According to the company, the canned water is sold in more than 29,000 locations, including Whole Foods, Target and 7-Eleven.

In early October 2022, "Liquid Death" received a $70 million cash injection from investors including Science Ventures and music group Swedish House Mafia. Overall, the company is currently valued at $700 million. Investors are adamant that the canned water could be the "fastest-growing soft drink of all time."

According to its own statements, "Liquid Death" is on track to achieve sales of $130 million in 2022, which is about three times the sales of the previous year. "With this boost, the company is laying the groundwork for an IPO, if it makes sense for the company, and for expansion into Europe," says investor Peter Pham.

The start-up was founded in 2018, and the first canned water went over the counter in 2019. The company is co-founded and CEO by former Netflix creative director Mike Cessario. Cessario understands successful marketing and has worked on numerous Netflix original productions' viral advertising campaigns.

The marketing of the mineral water in the can follows a special strategy: Under the slogan "Murder your thirst" (in German: "Kill your thirst"), it uses language that downplays violence and presents itself as a supposedly cool and nonconformist brand. "Liquid Death" uses negative comments and reviews from customers to compose songs from them. The start-up has already released two "Greatest Hates" albums. Most popular track: "Fire Your Marketing Guy".

"When we started, we wondered why it is that products, like [the packaging] of products, still have to conform to those dreary and boring 1950s rules, while other entertainment items can conform to more fun rules," he said Cessario told Business Insider.

In order to still be able to keep up with those products with "boring" packaging, the concept of canned water is particularly well thought out: "I don't know what other water brands spend, but we don't have budgets like Coca-Cola or Pepsi that we can spend. [ ...] So every bit of marketing we do has to be interesting or entertaining so that people spread it of their own accord," said the CEO.

Cessario also sees marketing as the reason for his start-up's success: "Branding in food and beverages is the biggest differentiator because 'consumers are not stupid'. They don't really believe that one product is dramatically better than the other. It's more about what brand they have an affinity for," he says. For him, the extent of this affinity is shown by the fact that more and more customers are having “Liquid Death” tattoos done.

In addition to its image, the company advertises its canned water with supposed facts on the subject of sustainability. On its website, it calls the recycling of plastics a "myth": plastic is "technically no longer recyclable because it is no longer worth recycling." His reasoning: Most recycling plants would simply send plastic to landfill, as they would go bankrupt trying to recycle it.

For Thomas Fischer, Head of Circular Economy at Deutsche Umwelthilfe, these statements are "completely confused nonsense". "Here you want to find artificial arguments to use the can," says the trained environmental scientist to the star. According to him, plastic bottles are an environmental problem, especially when they end up back in the environment. "The big food packaging manufacturers are licking all five fingers for single-use plastic bottles that they can use as recycling material," explains Fischer. With a deposit system like the one here, it is possible to recover sorted plastic bottles – and even use them to produce new single-use plastic bottles.

This is also much cheaper than "Liquid Death" portrays. "Using a material that has already been produced saves energy and causes only half of the CO2 emissions. For that reason alone it pays off, since energy is expensive and recycling is more environmentally friendly than using new material," says Fischer.

"I can't understand why it's written that this isn't possible," he says. In the USA, where canned water is primarily sold, there is no uniform deposit system as in this country. Nevertheless, in some US states, including California - which is also where "Liquid Death" comes from - there is a legally regulated deposit system for bottles and cans.

The reason the company prefers aluminum cans to plastic bottles is the longevity of the metal: "More than 75% of the aluminum manufactured since 1888 is still used today," according to "Liquid Death". But that is mainly due to the areas in which aluminum is used, says Fischer: aluminum is mainly used in devices such as automobiles, buildings, ladders, bicycles, window frames, etc. "These are all very durable products. It's entirely possible that most of the aluminum has been built into something for a hundred years - but it's just not freely available." Beverage cans, on the other hand, were short-lived products and fast-moving consumer goods. "That means Ex-and-hopp, drink and get rid of it," says Fischer.

If cans are collected together with other aluminum scrap, it is difficult to produce new beverage cans from them. In Germany alone there are over 400 different aluminum alloys, i.e. with different proportions of other metals. That changes the material properties, explains the environmental scientist. "If you melt many alloys together, the material is suitable for window frames, but only to a limited extent for thin-walled packaging such as cans."

It's different with aluminum cans with a deposit: These are collected by type - and so new cans can be made from the material. Aluminum has a melting temperature of around 660 degrees Celsius, which means that the pyrolysis and remelting processes require a lot of energy. In addition, up to 5 percent or even more of the material is lost in these processes. "Therefore, there is no infinite recycling cycle for cans. At some point, there is simply nothing left of the recycled material," says Fischer.

"Aluminum is generally too valuable a raw material and also too energy-intensive and too complex to mine to use it for fast-moving products such as cans," he says. For him, the can is and will remain "an unecological and dispensable beverage packaging".

Sources: CNN, Business Insider, Techcrunch, Brutkasten, CalRecycle