Mike Cessario

31:00Do you think Liquid Death is really a story about what's possible considering social media? Like if social media didn't exist, could you have done this? No, no chance. So in the old world, this could not happen. Could not happen. Yeah. Because the internet is both a blessing and a curse, but I think the blessing side of it is it has really democratized business. I mean, even like music, I mean, there are people who a label probably never would have given a chance, but they can put a video on YouTube and become, you know, it lets the market decide the winners and losers. Whereas before, you had executives that decide.

31:42Gatekeepers. Yeah, yeah, gatekeepers who kind of decide what the market gets.

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33:25what did you watch on tv growing up i watched a lot of married with children i still think that show is so funny and could never exist today my dad was a really funny guy so everything in our house was about humor brothers and sisters one younger brother we watched a lot of funny stuff like not a lot of serious stuff growing up who were your favorite comedians? George Carlin's probably my favorite of all time. More modern day, like Tom Segura, Burt Kreischer, Bill Burr. And all those guys have kind of become investors in Liquid Death, which is really cool too, yeah. That's great. It's cool because not only can they be ambassadors for the brand, but it's like, we're cool enough where it's like, hey, we're trying to think of a funny flavor name for cherry.

34:14Do you have any ideas? You can actually kind of have them contribute the humor of the brand in light ways that's not taking too much of their time, and that's cool too. Tell me about the power of humor. Humor, one, is really hard. And I think it gives us this competitive advantage where giant companies like Coke or Pepsi, with the way the bureaucracy is there, it's almost not possible to generate real humor. Everything's going through layers of approvals. Like, it just, it can't live that way. And humor by its nature is edgy. Yeah. And I feel like with everything that was happening culturally over the last couple years, I think there was a lot of good intention for some of, like, the woke kind of thing.

35:03But then I think it just got out of hand where it was like, there was a period where almost, like, comedy was dead. It's like, you're not allowed to make fun of things anymore. and I thought that was really weird and I think the world needs to be able to make fun of stuff always that's a reason why I think comedy is so it's so much of a infinite genre because all comedy really is is making fun of whatever's happening at the moment and even in the future if there's cyborg robots that own us we'll make fun of those robots that own us and there will be a way to make people laugh by making fun of sort of what's happening.

35:42So I think for us, it's like we could continue to make people laugh forever, because there's always going to be stuff to make fun of. So I think there's a power in just the genre as something that has legs versus, I don't know, will action sports always be a thing that's popular? I don't know. And how early in the process did you realize comedy was a big part of it? From the onset, the name was not about to try to be actually badass it was we want to be sarcastic it's almost like i was making fun of the extreme marketing that was all kind of bs like there's no reason that just because something has caffeine in it that it's extreme it's like my grandmother drank english breakfast tea that had the same ingredients as monster energy you know but it's all just marketing once you realize that marketing is all kind of theater, it's easy to make fun of it and to kind of like expose the bullshittiness of it.

36:43You know, it's like what happens when you try to position water as extreme, it becomes funny and it kind of makes light of anybody trying to position anything as extreme is kind of crazy. Can you go too far? Yes. I think any comedy is about taste. Even talking with Tom Segura, for him, comedy is such a game of fine-tuning. He's like, you can change one word and something goes from not being funny to funny. Or you change one little thing is sometimes all you need. So with us, it's a little different because we are a product. It has to be sold in Walmart. It has to be sold in Target. And they have their gatekeepers who are very risk-averse.

37:26so people are like oh liquid death is so edgy i'm like yes if you compare it to like traditional marketing that people hate but if you compare it to legitimate entertainment look at the number one comedy special on netflix that bajillions of people watch we are tame compared to the jokes in that or the number one horror movie we don't show anything remotely as graphic as that but These are still things generating hundreds of millions of dollars and massive mainstream appeal. But because we are a product, if we go too far and a Walmart executive says, that's too far, we're taking you off the shelf, there's no more brand.

38:06So you kind of have to, like for us, it is a tricky thing of we're always trying to toe that line between we want it to be legitimately entertaining, but we also need to be somewhat mindful of our business partners that we're not pissing them off. Have you ever had any pushback from any of the business partners? Little things. We did this campaign where we got one of the biggest adult film stars to deliver a completely innocent message about sustainability. And we made sure she's wearing full dress, there's no skin, nothing. She's just like, hi, I'm Cherie DeVille. And even though I'm into getting my bleep, one thing I'm not into, single-use plastic.

38:47and she goes to this whole funny thing and we ended the spot with don't F the planet. And there's data behind this. If you look at the data, there are more people that visit porn sites than any other thing on the internet, including probably the executives that work at these places, right? So if you're actually trying to reach a large audience, statistically, that is the way to do it. So you're thinking about it like, okay, you want to deliver an important sustainability message Well, here's someone with a probably larger audience than most celebrities and for a fraction of the cost, because you were just so excited to do something that wasn't adult film.

39:27Like, oh, I get to do like a normal commercial? Well, there's like, yes, I'll do this for free. So we did this thing. It did extremely well, like millions of views, like people loved it. But one of our grocery retailer chains had one pastor complain to the corporate office about the video. And it became a whole thing. And I had to write a letter saying that we won't use adult film stars in our marketing anymore. And that, yeah, like these retail executives, like they're so risk averse that one complaint from somebody can create a board meeting for executives. And it's, you know, it's a tricky thing to navigate.

40:05Tell me about data. First of all, is data always helpful or no? It's the thing we always talk about. Data can be completely reckless if you're not using it the right way. Anybody can find a way to use data to make something seem like the right thing. It's more about how do you extract truth from data? And it's not easy to do. You've got to find like, okay, well, how are you parsing the data? Like, where's it coming from? Like, what are you really looking at? So we use data as a way to help guide things or like to gut check like hey this is what we believe to be true are we finding any data that's really going against that that should make us wait a second this is saying this maybe we're not right or hey we think this and we look at some data like hey that actually kind of cooperates this like maybe we're on the right path you're never going to know totally i think intuition is so important and again like even as like a music reference it's like yes you could probably make a great album based on data and likes, but there's just something about the intuition of just knowing this is going to resonate on some level with people, and you're not going to have the data that's going to perfectly back that up.

41:24Give me an example of how you actually use data and where you would get it. Okay, so good example, survey data. So as we evolve as a brand, as you scale, you have to do something that they call price pack architecture. It's like, yes, people love Liquid Death, but what's the right size case and can that is best when people are grocery shopping? And you're hiring someone to do this survey? Yeah, there's companies that will run survey data. You can go through consulting companies like BCG. I think we actually use BCG. Well, they'll do like full-on crazy things with like mock shelves to see what do people pick.

42:05But we wanted to figure out, okay, we know people love Liquid Death. What's the right pack size and can size and price point for Liquid Death in grocery stores so that we can sell as much of it as possible? And that's where you start seeing like, oh. How many different size cans do you do? We have two different size cans. We have big 19-ounce Tallboy cans that we just sell as like single serve. So when you're in a 7-Eleven and you get something cold, you get this big Tallboy. What other drinks would be next to them that would be that same size? Well, you see a lot of big beer cans in convenience stores.

42:42We're not merchandise next to the beer, but the other big cans you would see in the store, energy drinks, beer, alcohol, you typically see. You don't see a lot of other—Arizona iced tea famously was in the big giant cans. That's probably the gamut of it. Okay. And then there's a smaller can as well? Yeah, we do the kind of standard 12-ounce can, like that classic beer soda can size. And that was the big change we made this year. Because what we realized when we were only selling the Tallboys, we sold them as singles, and then we sold them as an eight-pack. But when you buy an eight-pack at the store, people are taking it home and consuming it at home.

43:21And what we learned was like most people don't want a giant can at home. Like that's more for like on the go. You're going to have it around for a while. So, yeah, there was good data to show, hey, when people faced with the decision, more of them wanted to purchase more small cans for home than less big cans. And then we see some more like customer data from social media. We look at data all the time there. People commenting, hey, these big cans, my kid only drinks half of them. I end up pouring them out. When are you guys going to make a smaller can? Like it's too big. It's too much. We use all that stuff to kind of inform, hey, we're going to make a big decision.

44:01Where do we go? Tell me more about comments. What other stuff comes from comments that ends up being useful? So one of my favorite marketing things we've ever done, and it's musical, was with a brand like ours, since the beginning, you had such a great quote I saw recently that was like, great work divides the audience. and like liquid death we had a very divided audience in the early days you had people hate commenting this is the worst thing ever are these guys devil worshipers you get all that and you get the love this is the greatest thing ever and i've always said there's no such thing as getting a hundred percent of people to love something it's not possible if you want people to truly love something there has to be people that truly hate it and the way the internet works most normal people are passive observers of the social media circus.

44:56You're scrolling, you're looking at stuff, maybe you like something, but very few people are going in commenting angry things. People don't engage. People don't engage. The extremes engage. So the loudest people on either end, the true lovers, this is the greatest thing ever. And then the true haters, this is the worst thing ever. That's who you find in the comments. So we had all these hate comments and we did this funny post because literally it cost us nothing. We had an image of our can. We took this hate comment that said something like, I will never buy this product. I will never support something that is clearly Satan worshipers.

45:36We literally screen grabbed that comment, put it next to the can and said, people love us on the internet. And that post was the best performing post we had done ever. and it cost us nothing. So we were like, oh, this idea of like leaning into the hate could be really interesting. So then we said, what if we gather a bunch of the best hate comments, hire legit musicians and make an album where the lyrics are verbatim hate comments from the internet? And we called it Liquid Death's Greatest Hates. It's funny. So the first one we made was like a heavy metal record where we got this legit guy who's a heavy metal guy.

46:16He played all the instruments, wrote the album. It was like a legit metal record. And the lyrics are all just like, fire your marketing guy. And it was cool because we've done it across genres now where it started as a metal record because it was like, oh, they're angry. So doing an angry record made sense. Then we did a punk album, which still was kind of like funny, angry. But the punk album did better because they were singing. With a metal record, they're just growling. You can't hear the lyrics as much. then it was like the punk record you could hear the lyrics that was funnier then the female power pop album that was funny because you really hear it and then can we hear do you have it on your phone yeah i do yeah let's hear a song oh okay yeah um what track would you like to hear worst name for water company yeah that's a good one yeah

47:10Yeah.

47:34Some 46-year-old ad dude with swallow tattoos Probably spent 15 years Of his professional career To come up with this idea Worse name for a water company Worse name for a water company Your marketing department had one job

48:07Really funny. Yeah, yeah. And the idea of just taking the bad comments and making something beautiful out of it. Yeah, exactly. Yeah.

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49:48Can you think of any times where you've gotten data back and you've decided to go against what the data tells you? Yes, but more when I don't believe that the data is a good source of data. So for instance, you only have access to so much data. And most data that big companies pay for and that are readily accessible, which almost has become like the standard, is survey data. So someone will say, well, hey, we have this data that we pulled that, I don't know, people don't want this one thing, whatever it might be. I'm like, okay, how big was the pool of people? 200. Okay, that's not a lot of people.

50:31How do they get the info from them? Oh, it's a survey. What do you mean survey? Like, you know, like when people call you and say, hey, would you like to take a survey? I'm like, has anybody in this room agreed to a telephone survey ever? Do you know anybody that's agreed to a telephone survey? Okay, no. So who are the people that agree to surveys when people call them on the phone? Like this might not be like your average customer or who we're talking about. So you can't put too much stock in something like that, right? So, but if we're looking at, but hey, on social, when we posted a similar thing, it got 10 ,000 likes.

51:09So maybe that's a better view of like real market reaction than not. And same thing with like focus groups. Like focus groups have always been a thing that people use for data. But when you put random people in a clinical room and say, what do you think of these things? People say and do things they wouldn't normally do. So you can use it for certain things, but you just have to be careful of like, what are you actually getting out of it? And how big of a decision are you making based on it? Which social media sites do you use for liquid death? Liquid death, we're most focused on Instagram. That's kind of like...

51:47Has it always been that from the beginning? It started as Facebook. But I think it's evolved where there's a wider range of demos on Instagram. Facebook's become a bit older in their demo. And we still do some stuff there. But Instagram kind of seems to be where so much of the heat is. And then TikTok, we've done pretty well there too. Do you make different content for each place? Or is it just the same thing in different distribution? Some of it's the same. Some of it's unique. Instagram's kind of like our main platform we make stuff for. The other thing that we've done well with is finding influencer types on TikTok that have their own audiences and then finding ways for them to do something with our product for their audience.

52:32And would you pitch them on that? Yeah, like if we find someone who's interesting or we think is funny or does cool things, we'd say, hey, we'd love to pay you to do like a fun liquid death thing. And the minute you tell someone who's not a marketing person to do a marketing thing, they start making bad marketing things. It's like, no, no, no, no. We don't want you to make an ad. Like, just do what you would normally do and just, like, find some, like, I don't care if you, like, pour our product out. Like, we're not sensitive. Like, do what is natural to why your audience follows you. Don't try to make an ad for Liquid Death that goes outside of that.

53:06And that stuff has been successful. And I think with the platforms, you know, it's a better way to leverage audiences than you trying to constantly hit a bullseye on different things. Do you do that everywhere or just on TikTok? We do it everywhere. Cool. Like there was this Instagram account called influencers in the wild. Have you ever seen that? No. Where it's this guy, he posts these videos where it's like, you know, some girl in the middle of traffic trying to get like, you know, the perfect selfie video. And had like tons of followers. So we were like, hey, we would love to do something with you guys.

53:43So we have this big, ridiculous mascot that we call Murder Man. And he's like this muscle-bound Conan the Barbarian-looking guy. But instead of a head, he has no head and he has a can for a head. And his eyes are nipples because he has no more eyes in his head. So we're like, we went with him and he had our mascot seeming like an influencer on a beach, like trying to take these super vain photos of himself. And then that did really well to that audience. So, yeah, you just find ways to insert liquid death into the culture in a way that feels natural and not forced. And again, it's always funny and people appreciate it.

54:23It doesn't feel like, oh, clearly this guy's just getting paid to say, this is the drink that I drink and you should drink it too. Do you have a whole team of people who focus on that? So we've built our own internal creative team and production team that we call Death Machine. Great. Yeah, they can go and film stuff for cheap. Yeah. Have you used that machine for any products beyond your own? No, it's just for us. And it's not a big team. It's just a couple of producers. But if you don't have your own team, you're going through a production company, and they're just marking up the cost of everything because they have to make money.

54:59But when we kind of own it all, we can do it cheaper. Because that's the other big thing is, like entertainment, it's really hard to know what's going to hit. So you kind of have to make a bunch of small bets and knowing that if two hit, it's kind of worth everything else. Whereas like I think the old marketing model is like an agency comes in to a client and says, here's three big campaigns, pick one. And then some boardroom of executives say, that's the best campaign. And they pick that campaign and then they spend$50 million on that campaign and you hope that it works. for us it's like try a lot of things try a lot of things yeah and i think you're seeing that in some of the hollywood model like blumhouse jason blum's company like they kind of redefined horror because they were making movies for no more than four to five million dollars and everybody was doing the movie at whatever minimum wage was knowing that they would get some upside on it if it was successful but it enabled really provocative interesting outside of the box ideas to get made because if those ideas were going to cost 30 million no studio would take the risk to try to make something like that but if it's only 4 million you can make a bunch of weird stuff and then some of them become get out and they become these huge successes so we take a really similar thing of most things that we make videos like we don't spend more than 100k on but the ones that get 40 million views and, you know, 12 billion impressions.

56:30It's like, oh, the earned media value of that is 20 million. Would you say not related to the influencer side, but in the content generation side, is there at least a post a day or no? No, I think we've moved away from frequent posting. I think that was the original, like when brands got into social, it was like, You have to be always on, always on, constantly posting. And then we took a step back a couple years ago, let's kind of focus on quality over quantity. I think the internet, that's the problem. It became so much a quantity thing. It's not possible to make great stuff that frequently. And then you started to see the rise of some mega influencers like Mr.

57:11Beast, where he would post one video a month. But that video was like unreal and would get 100 million views. I'd much rather play that game of like, let's do one really great thing or maybe two great things a month and focus there versus just kind of trying to do all this little stuff that often takes the same amount of time to do. It's just not as good. Walk me through the beverage business in general. It's a really hard business because so much is out of your control. So the way the beverage business works, you work with manufacturers who produce your product. then you sell your product to distributors.

57:54Distributors then sell the product to the retail stores. How many distributors are there in the country? Thousands. We are mostly in the Anheuser-Busch beer network because the way the beer laws work, post-prohibition in the United States, beer manufacturers are not allowed to own more than 20 % of their distribution. For whatever reason, if you make beer, you can't also be the one that is selling the beer to the retailers. They call it the three-tier system. Coca-Cola, they could own their distribution. Yeah, because they're not alcohol. Right. I see. Yeah, so Coke owns all of their distribution, essentially, as does Pepsi, as does these other ones.

58:34So they're less interested in sharing it in that distribution. Exactly, yeah. So you can only be distributed, for the most part, by Coke or Pepsi if they own you. Right. And that tends to be what their value proposition is when they buy a brand. They're like, hey, we'll buy you, put you into our network, and you're instantly kind of everywhere. With beer, because corporate Anheuser-Busch only owns 20 % of its network, there's 300 independent family-owned beer distributors that can make their own decisions for what they distribute. So we literally had to go one by one in convincing them to carry Liquid Death and distribute us.

59:15Are there any other options? That's pretty much the only distributors. It starts getting really in the weeds, but it's like they're called DSD distributors, which mean direct store delivery. Means they're a distributor that has a sales guy that takes your product into the store and merchandises it on the shelf. There's another group of distributors that they call Broadline or Direct. they're more like a logistics company. They have these big trucks. They have your product, a bunch of other stuff. They drop a pallet of it off in the back of the store. They leave and go to the next store. So you're depending on a store employee to then open that up and then go and put that on the shelf.

59:57But what's happening in this retail environment, retailers are having a really hard time hiring that low-cost grocery store labor. So they all have labor issues where people who are going direct, the shelf is sitting empty because that stuff is sitting in the back and nobody actually has the time to put it on the shelf yet. So do you pay a premium for the DSD? Yes, you do. They need real margins where you make more money going through the direct way, but then you have to hire your own people to go into the store and make sure that the shelves are stocked. So the direct guys really only go for the most part to the big stores.

1:00:35like all those mom and pop little bodegas like they're not really going there so you kind of need the dsd guys to are there any places that you want to get your drinks into but can't there's one grocery store chain in texas called heb that we're not yet in we may be closer now but the buyer took us in said yeah we love this and then we were in the store they built some big displays, like our team built some big displays in the store. One VP of HEB, who I think maybe was like super religious, saw the liquid death display and said, oh no, this is not the right brand fit for our stores. And they discontinued the brand from the store within like weeks of it actually launching and going through the whole lower end of the system.

1:01:27And it's like the only grocery chain in the U.S., pretty much major one that we're not in yet. But it seems like maybe this person is close to retiring and we might be able to eventually get in there. But that's one. And I think Trader Joe's is one. I love Trader Joe's. And I think Trader Joe's is one of the most underrated brands of all time. People are actually fanatical about Trader Joe's. I remember during COVID, there's lines of people waiting to go on the Trader Joe's. I talked to my wife, about, oh my God, I love the Trader Joe's whatever snacks or the Trader Joe's whatever. And they've built a brand that it doesn't matter what they make, people like it.

1:02:08There's not many brands, especially in the food and beverage space, who have been able to have a level of fanaticism across multiple product categories. And I think it's just super interesting, just everything they do as a store and as a brand. And they do carry stuff that's non-Trader Joe's branded. They carry beer brands and stuff like that. It would be cool to have Liquid Death in Trader Joe's, but again, they have such a weird, unique way of how they pick products and how they don't, and it's really tricky. Who do you think of as your competition? Do you think of Evian as your competition, or do you think of Monster as your competition or Red Bull as your competition?

1:02:50It's kind of everything. You take a little bit of share from some of the other premium water brands, you end up taking a little bit of share from brands that people are trying to cut down on. But so is probably Evian too, right? Like people who are trying to cut down on soda, maybe they start drinking more bottled water. So yeah, it kind of depends what the occasion is. But we are seeing that so many people are choosing liquid death because it's a legit replacement for something that they want to cut down on. Like our flavored sparkling water, Like the Croix, for example, they're flavored sparkling, but they have like no sweetener at all.

1:03:28Like it's very bland. And there's certain people who are trying to cut down on soda and they're like, well, I've tried the Croix, but it's not really a replacement. Like I missed that sweetness flavor. So like we put just a little bit of sugar in ours and like a little bit of natural sweetener. Now we're maybe half as sweet as a soda. Not fully, but it becomes a much better replacement. And we've seen tons of people now talking about liquid death. You actually helped me stop drinking soda for a whole month for the first time ever. And that's the kind of stuff that gets me excited. It's like getting people who aren't typically healthy to start doing healthier things.

1:04:07Is there any relationship to the color of the can and the liquid or the flavor that's inside? Sometimes and sometimes not. and i think we've gotten better about like where we would start just making totally crazy sounding things that have maybe not as much connection to the actual flavor we come up with really funny flavor names for everything like our cherry is called cherry obituary we have iced tea and we have a half and half which most people know is an arnold palmer and a funny story our original name was Armless Palmer. And a month after launching, we got a cease and desist from the Arnold Palmer estate saying, you know, you have to stop selling this.

1:04:53This is too close to what it is. And then our lawyers actually looked at it and they're like, there's this thing that happens. I don't know what that's called, but a certain term can become truly ubiquitous. and if you can kind of spend a couple hundred grand and do a study that anybody can go into a restaurant in America and order an Arnold Palmer and they'll get a half tea lemonade and they have no confusion that that is licensed by the golfer's estate. Once something's become a part of vernacular, it's called that. That's what it's called. And if you can prove that, they would lose the rights to stop people from using it.

1:05:33And there's been a couple brand names like that throughout history. Like, I think Teflon was one. Like, that was a brand, but it's also a substance that anybody can make. And I think, like, anybody can call it Teflon. So I think we probably scared them off a little bit when we gave that response of, like, hey, we think it's become ubiquitous in any place in America. Even if we wanted to use the real name. Our names, though, were close to Arnold Palmer. We don't use any golf imagery or whatever. but even still we were like you know they have a lot more money than we do if they really wanted to be a pain in the ass and like drag out a court process like you know do we want to go through that so we're like let's just change the name so we changed the name to dead billionaire and we posted the cease and desist on social media and told everybody the story national media attention everybody loves it and now it's like our top selling flavor so again like when you can find a way to like turn problems into positive things like it can work really well is it only a domestic brand or are you global especially if you look at our social media following we have a fairly international following on social we did a little bit of selling in like the UK and Australia.

1:06:51It's just kind of like a dip our toe in the water. And people were responding to the brand really well. Because one of the reasons we were testing Europe is because we had Austria as a producer. So we're like, hey, we're already producing there. We can just ship some over there and test it out. But once we fully moved the supply chain to the US and we stopped working with our Austrian co-packer, it's like, okay, well, if we want to continue this, we're going to have to start shipping over the ocean back there. Or can you just go back to Austria and do the European stuff there. The problem is you lose all your scale.

1:07:21I see. So now the cost, because you're only making one-tenth of the volume, they raise... But it'd still be like starting over in the US. You could start over in Europe and eventually it gets to a point where it's worth doing. Totally, but it just costs a lot of money. Yeah. You have to raise capital. You have to be willing to burn cash to do that. So we kind of decided, hey, we have so much to focus on in the US. We're still small. Let's not burn precious capital to get Europe going. Like, let's focus it here. And then once we have more scale, you might even have a better deal where it's like some distributors like, hey, we're willing to invest this just to get liquid debt here because you're already so massive.

1:08:04Like Red Bull, for example, before Red Bull came to the US, they were doing over a billion in sales in Europe. So when they came here, they had a lot more capital, manpower, scale to make it much more quickly successful than when they just started from scratch. Do you picture growing beyond beverages, or is it a beverage company? I think it's a beverage company. I mean, I think one unique thing that we do is, again, from my band days, we sell merch and apparel just like a band. And we actually sell a lot of it because we take it seriously. Like we design liquid death shirts with artists. It's not just about sticking our logo on a shirt.

1:08:46It's like people will do these crazy liquid death looking pieces. And this year we're probably going to do 6 million bucks just worth of apparel as like a beverage company. We've made gold liquid death Nixon watches that have little execution or axe handles on it. And we sell out of those. So, you know, like a true quote unquote lifestyle brand, if you're a brand that people feel like represents something, like a band, they will wear it around. Now it's like, it's crazy. We have all these companies reaching out to us that want to license our brand. So like in Target right now, there's a company that makes pool floaties and they do them for like one that looks like a big Cheez-It and a big Pop-Tart.

1:09:29Now they have like a big liquid death can. And it's like, they just license our brand and then they sell them, they get it on the shelf, they deal with all the hassle. And for us, we're not trying to be a merch company, we're a beverage company. That's just free marketing and awareness inside the store in a different part of the store just because we're there. What would you say the first breakthrough where like things were moving along, it was building, but then something happened that was like, everything is different now? It was probably when we launched Whole Foods. Because in that first year, we were still seen as such a edgy, heavy metal brand.

1:10:12And when Whole Foods took it nationwide, they weren't even like, no, let's just try it in a region. They're like, no, full national. All these other retailers who were afraid of the brand, once we were like, well, Whole Foods has it, they're kind of like, oh, well, if they have it, what do we work with? You know, so I think it really became this domino effect of once Whole Foods was the first one to take it and they realized, okay, there's no one protesting in the parking lot. Oh, and look at their sales. They're growing like crazy. It just, I think, really opened up the floodgates to other physical retailers, like open to taking the brand in and giving it a chance.

1:10:50And that's where really that's when our growth just started going like pretty nuclear. And has growth been pretty consistent since then? Yeah, I mean, in the first couple of years, I mean, it was like, I mean, it's all publicly available data, but we went year one, 3 million, year two, 10 million, year three, 45. So it just kept kind of exponentially going up. Now we're getting to those levels of scale where even like 50 % growth is pretty insane for a company, our scale. So yeah, I mean, we're just kind of consistently looking at, we don't need to double in size every year. It's more now about, okay, how do we focus on becoming a profitable company?

1:11:31It's like we have scale now, because that's kind of how it is. In beverage, what makes it hard, especially in non-alc, Coke and Pepsi set the pricing for all the categories. So if you want to be a water brand, let's say Coke is pricing Dasani at$1.49. you can't come in and charge$8 just because that's what your supply chain dictates you to make to make profit. You have to price somewhat competitive to that and wait until your scale is at a certain point where you have the scale to actually be making money at that price point. And it's not really a fair game because they have the scale. Yes, exactly.

1:12:10And they're setting the price. Yeah, which is why beverage in general is such a hard industry to be successful in because there's so much stacked against you from scale of the big guys who literally own everything. Like every music venue, every stadium, every ski resort, every casino is locked up in a Coke or Pepsi exclusive contract where that place is only allowed to sell Coke and Pepsi products. So even as a brand getting in from like a marketing standpoint, it's really hard. And now we're finally getting to that level of scale where it's like, oh, we don't need to hire a ton more people. Like we have the right team size.

1:12:47Now we can finally like let the revenue pass our costs. And then now finally you start becoming a profitable big boy company, as we call it. But it takes a long time to get there and a lot of capital. And that's why a lot of brands, they just kind of end up running out of gas before they get to that level. Do you have any ideas for other product categories of beverage? Definitely. We're looking at a new category next year, which is exciting. I can't really talk about it. But my focus is anything we go into has to be a better for you play. Whether that's a category that's typically not seen as better for you, and we come in with a better for you version of what that is.

1:13:31Like liquid death, I don't think we'll ever make hard spiked liquid death that has alcohol. I don't think we would ever do that because it's not healthy. And it would be hard to spin anything with alcohol as truly healthy. but I think there are things in the world of like caffeine like you could do something healthy it doesn't have to be some of these energy drinks now like it's like 300 400 milligrams of caffeine like it's gotten kind of crazy where Red Bull is the conservative one now you know so we're looking at all kinds of different things and trying to find like hey is there a category that needs a better option for something or is there a category that is really healthy and there's just no interesting brands in it and we can go and be the one interesting brand in this healthy category and bring it to more people or put our marketing sort of firepower behind it.

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