Life after Four Loko
The Chicagoans behind the controversial caffeinated malt beverage are back with a new line of ultra-portable booze.
Wed Sep 26 2012
At 10am on Sunday, June 24, still two hours before Chicago’s Pride Parade is slated to start its march down Broadway, the house party I’m at is in full swing. Most of us have been drinking since 8am. It’s also 85 degrees. My boyfriend heads to the host’s kitchen in search of a Popsicle, and returns slurping something icy out of a pouch that looks like a Capri Sun—only branded with a splashy photo of a margarita. contains alcohol reads a bold-faced warning.
In a room of twentysomethings who are hot, drunk and quickly tiring of mimosas, the novelty of something that’s icy, alcoholic and comes in the same style of juice pouch we drank after fifth-grade soccer practice turns heads. Soon, we’re passing the pouch around as if it’s a joint. The frozen margarita inside is tart and lip-numbing and sugary—not at all, by cocktail standards, good, yet just right for the mood of the day.
Four Sundays later, during a much quieter afternoon at new Gold Coast rooftop Drumbar, I meet Jaisen Freeman, a laid-back 34-year-old wearing bright yellow sneakers and a T-shirt with a repeating pattern of tiny boom boxes. Freeman is a friend of a friend, but also a businessman of some infamy: In 2010, his name was at the center of scathing news reports nationwide as one of the three Chicagoans behind Four Loko, the 23.5-ounce blend of malt liquor and caffeine that was deemed dangerous by the FDA, commonly nicknamed “liquid cocaine” and banned by liquor boards in numerous states. In November of that year, as the Chicago City Council was considering a ban, Phusion Projects—the Chicago-based company Freeman started with pals and fellow Ohio State grads Chris Hunter and Jeff Wright in 2005—promised the FDA they’d stop manufacturing the caffeinated beverage. A caffeine-free version of Four Loko is still on shelves.
From talking to Freeman, it appears Phusion Projects’ founders have overcome their Four Loko hangover. He speaks excitedly of the company’s latest sensation: Island Squeeze, a line of margaritas and piña coladas packaged in single-serving pouches that are set to hit Chicago shelves in October.
Island Squeeze launched in several test markets in March, one step ahead of competitors like Smirnoff and Parrot Bay, which launched lines of tropical pouches in June. Whichever brand I was drinking at Pride, it turns out our party host that day was, unwittingly, on the forefront of the next big thing in booze. Wal-Marts around the country, Freeman tells me, are ordering pallets of Island Squeeze, setting up displays eight boxes wide and five boxes high and selling out in a single weekend. For its Chicago launch, Phusion clinched a big sale with Jewel-Osco, landing the Island Squeeze pouches on the grocery chain’s shelves any day now. The company also just signed an endorsement deal with T-Pain: The “I’m on a Boat” rapper will informally hype Phusion’s other new product, Moskato Life, a riff on moscato inspired by the dessert wine’s recent prevalence in hip-hop lyrics.
Freeman, Hunter and Wright are notoriously tight-lipped with the press, refusing all interviews for the six months following the Four Loko firestorm and doing few since then. But when they agree to meet in their PR firm’s office at the Merchandise Mart, it’s clear they’re not hung up on the criticism that could have put them out of business, including the fingers pointed at them when a 21-year-old Maryland woman died in a car crash in 2010 after drinking two cans of Four Loko. They insist the new, caffeine-stripped version of the drink is selling well, say they learned a lot from the experience and quickly move the conversation to Island Squeeze, offering me a pouch of the brand’s Pink Lemonade Light.
Freeman and Hunter are particularly proud of this flavor, which boasts 200 calories, one-third fewer than the others in the line. They’re also eager to show off how the drink, despite encouragement from the package to “freeze & squeeze,” can be poured over ice. Besides this and the margarita and piña colada flavors, Phusion also offers strawberry daiquiri; each ten-ounce pouch goes for $1.99.
I use daiquiri (and margarita and piña colada) loosely. Island Squeeze pouches contain no rum or tequila, or any spirits at all. Instead, the alcoholic base is a clear, neutral malt, and added flavorings mimic the taste of tropical cocktails. That’s Island Squeeze’s business secret: Phusion can market the product as beer, which allows the pouches to reach a much wider audience. For example, Hunter says, in Ohio spirits can only be sold in a state-owned liquor store, of which there are about 300—but there are 10,000 stores in the state allowed to sell beer, including grocery stores. With a network of more than 350 distributors nationwide, “we’re currently the 12th largest brewery in the country, and we don’t own a brewery,” Hunter says. Similarly, Moskato Life uses a malt base instead of muscat grapes. Both products are made at a contract facility in Michigan.
Customers don’t seem to mind that their margarita doesn’t contain tequila, or their piña colada doesn’t have rum. Phusion secured a deal with Soldier Field to sell Island Squeeze at the Kenny Chesney concert in July, and, with just one stand in the stadium, sold 1,500 pouches in a single night. “It’s convenient,” Freeman says of the pouches’ popularity. “You don’t need a bottle, a blender [or] a mix.”
That’s part of what concerns Sarah Howe, CEO of the Illinois Alcohol and Drug Dependence Association, about single-serving alcoholic drinks. Though she hasn’t seen any reports of underage drinkers abusing Island Squeeze, “what we’ve seen in the past is that [drinks like these] fit in a backpack, they fit in a schoolbag,” Howe says. “Whether people want to believe it or not, underage drinking is the number-one problem we have in this country right now.” Back at Phusion, Hunter points out that each pouch has five contains alcohol mentions when it’s only legally required to have two, and stresses that stores need to be vigilant about carding.
Are Hunter, Freeman and Wright worried about competitors like Smirnoff or Parrot Bay, whose freeze-and-squeeze flavors are strikingly similar to Phusion’s line? One advantage, Hunter says, is Phusion’s size. With just 90 employees (ten in Chicago and about 80 nationwide, who sell to distributors in various states), their business model is this: Meet around a table, sample potential products and go with their instincts on what will sell. This allows them to get to market faster than competitors who conduct lengthy focus groups. “In one day, we make decisions that would take [a bigger company] a year to make,” Hunter says, nodding at the pink lemonade Squeeze we’re drinking, the first “light” pouch drink on the market. “This,” he says, “is already the next big thing.”