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Phusion Projects, LLC
Company typePrivate
IndustryDrink
Founded2006
FounderJaisen Freeman
Chris Hunter
Jeff Wright
Headquarters Chicago, Illinois
Area served
Worldwide
ProductsFour Loko
Four MaXed
Earthquake
Increase $144 million (2010)
WebsitePhusionProjects.com

Phusion Projects, LLC is a beverage company most well-known for creating the alcoholic drink Four Loko. The company does business under the name Drink Four Brewing Co., and was founded by three former college friends in 2005.[1] Their first product, Four Regular, was put on the market as a caffeinated malt liquor in January 2006, but the drink was discontinued in favor of the more successful Four Loko and Four MaXed in 2008.[2] After FDA action against caffeinated alcoholic beverages in late 2010, all Phusion Projects products currently contain no caffeine.[3]

History

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Phusion Projects LLC was founded by Jaisen Freeman,[4] Chris Hunter,[5] and Jeff Wright,[1] all 2001 graduates of Ohio State University.[2] After graduating, the three friends had originally gone into disparate careers such as investment banking and industrial gas.[1] In March 2005 they had to idea to create a unique alcoholic beverage, and from April to December of 2005 they created and put into action a business plan for their own beverage company.[2] They pooled their financial resources, gained start-up funds of $150,000 from friends and family, and took out an SBA business loan of $100,000. Their first major run of product (5,000 units) took place in December 2005, with the founders soon quitting their normal jobs to devote themselves to the new company full time.[1]

Their first product, Four Regular, was put on shelves in January of 2006. The founders embarked on a series of cross-country roadtrips to market Four Regular to distributors, but by December of 2007 the company was nearing bankruptcy.[2] In 2007 they had released a grape product with an increased ABV of 10%, but it wasn't until they released the new product Four MaXed in January of 2008 that the company began meeting with success.[1][2] In August of 2008 Phusion Projects released the beverage Four Loko, which met with high market success in convenience stores and markets. In 2009 their distribution had increased to 47 of the United States, and by October of 2010 they had leased office space for a headquarters in Chicago, Illinois, with over 90 employees on payroll.[2]

In the twelve month period of 2009, sales of Phusion's Four Loko and their product Four Max increased by 2,680%.[6] According to Symphony IRI Group, as of October 31, 2010 the company had annual sales of $144 million.[6]

Earthquake

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Phusion Projects sells the drink Earthquake in a can form, a non-caffeinated high gravity lager.[4]

Four

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Product

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See also: Four (energy drink) § Product line

[[:Image:Fourlokoproducts.jpg|thumb|right|200px|Four Loko in can form]] Phusion Projects produced two distinct products under the name "Four", with the name coming from the original primary ingredients; alcohol, caffeine, taurine and guarana.[7] Their product Four MaXed contains 10% ABC and is packaged in 16oz aluminum cans. A tall can of Four Loko is 23.5 ounces, with an alcohol content of 12%.[7][8] This makes one can the approximate equivalent as four beers.[9] The original recipe for Four Loko included 156 milligrams[6] of caffeine, about as much as a strong cup of coffee or several shots of espresso.[7][9][10] The cans typically sell off the shelves for $2.50 to $3.[11] Where required by law, Phusion Projects also sells versions of its products with reduced alcohol content.[12]

Phusion Projects has increased the amount of available flavors over time. The eighth Four Loko flavor, lemon lime, was made available in October 2010.[2] Earlier regular flavors include watermelon, grape, lemonade, and fruit punch.[6] On January 4, 2011, Phusion Projects announced the launch of the new product Four Loko XXX Limited Edition. The beverage features a new Four Loko flavor every four months, beginning with green apple in January 2011. Green Apple was replaced with blueberry lemonade in May.[13]

On March 28, 2011, Phusion Projects announced that they were making Four Loko available in bottle form, featuring the flavors lemonade, fruit punch, and watermelon. They bottles are currently available in six packs of individual flavors, as well as a 12 bottle variety pack. The bottles contain 11.2 ounces of liquid and have 8% ABV.[14] [7]

Sale restrictions

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See also: Four (energy drink) § Restrictions on sale
Central Washington University incident

In October 2010, nine Central Washington University students became ill after binge drinking Four Loko at an off-campus party.[7][11] Despite the fact that Four Loko was approved by the FDA and not different from other caffeine imbued alcohol drinks on the market, Washington State Attorney General Rob McKenna reacted to the incident by calling for a ban on Four Loko in Washington State.[11][15] Phusion Projects responded by saying "Our products contain less alcohol than an average rum and cola, less alcohol and caffeine than an average Red Bull and vodka, and are comparable to having coffee after a meal with a couple glasses of wine," and also pointed out that the FDA had received research showing that caffeine and alcohol combined in beverages is safe for consumption.[11] According to Open Market, there is no scientific evidence that mixing caffeine and alcohol has deleterious effects.[6][8]

After the event, Phusion Projects sent nearly 300 letters to college presidents, student life deans and campus alcohol counselors sharing information about Four Loko, and requesting the opportunity to discuss ways to productively combat alcohol abuse and underage campus drinking.[16]

State energy drink bans

Two weeks after the incident at Central, Michigan banned Four Loko and other alcoholic energy drinks.[7][17] Washington state followed shortly after, when the state's Liquor Control Board banned all similarly caffeinated malt liquor drinks. The Pennsylvania Liquor Control Commission asked licensed sellers to voluntarily stop selling and promoting alcoholic energy drinks.[6] By mid-November, Four Loko had also been banned in Utah and Oklahoma, and had ceased to be distributed in New York State by November 19.[18][19][10] New York Senator Joel Klein said in a statement that the drink was too easy for teenagers to consume.[20] Senator Chuck Schumer also pushed the ban.[21] Phusion Projects responded that all their cans were clearly labeled, and complied completely with FDA standards for the disclosure of ingredients, alcohol content, and nutritional information.[22][9][23]

Caffeine content

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In mid-November, the FDA redacted on their earlier approval of caffeinated alcoholic beverages, and sent warning letters to four companies, including Phusion Projects, that they needed to reformulate their products.[24][6] The agency relied on a rarely used provision in a 1958 law governing food additives to support the warning, as under the law, the onus is on manufacturers to "prove" that their additives are "generally recognized as safe." Since the FDA hadn't explicity approved adding caffeine to malt liquor, the companies had thirty days to prove to the FDA that the combination was safe. Phusion Projects supplied the information, but the FDA responded “Addressing the safety of caffeine alone are not sufficient to establish the safety, and the general recognition of the safety, of beverages that combine caffeine with alcohol.”[25] However, Phusion Projects at the time had already prepared a product line without caffeine.[1]

On November 18, 2010, Phusion Projects announced they were reformulating all their products to voluntarily remove the cafeine, guarana, and taurine, and would be producing only non-caffeinated version of Four Loko.[12][9] That same day they stopped production of all alcoholic beverages, and stopped shipping the products the next day. On November 19, they instructed distributors to cease selling the caffeinated products.[3]

Their reformulated product was approved by the Alcohol and Tobacco Tax and Trade Bureau, and reintroduced to states that had banned the previous product.[9][3] Despite the reformulation, as of February 20, 2011 sales for the company were up by 51%.[1]

Ethanol Conversion Initiative

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After Phusion Projects voluntarily reformulated their product in November 2010, they were left with $30 million liability of unsellable product in their own and their wholesalers' warehouses. Some wholesalers' individually had over $1 million of unusable leftover inventory. For most distributors, Phusion Projects gave them a high percentage of instant sign-offs to partially refund their loss over time.[1] The three founders also put back into the company all the profit they'd earned.[1]

Phusion Projects also started the Ethanol Conversion Initiative, where unusuable product was repurposed into ethanol, and environmentally friendly process. The amount of recycled Four Loko is enough to fuel 8,000 cars for one year. The aluminum cans, water, cardboard packaging, and shipping pallets were also recycled.[5]

Community involvement

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Taxi Service

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On November 12, 2010 Phusion Projects launched a mobile verion of its website with a "taxi finder" service. After entering a zip code, the site uses google technology to locate local tax companies and provide links to their websites and phone numbers.[26][27]

Charity, volunteering

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Since it's 2005 founding, Phusion Projects has set aside a percentage of its annual profits to fund a number of non-profits. In 2010 they included the American Cancer Society, Phoenix Childrens Hospital, United Cerebral Palsy Center of Central Arizona, the East Los Angeles Boys Club, Girls Club, Helping Hands of South Africa and Ronald McDonald House.[5][28] They also launched a year-long initiative in January 2011 to assist foodbanks.[28] Each month, a co-founder accompanies local employees to volunteer at a different local foodbank, as well as providing a donation.[5][28][4]

On April 13, 2011 the company launched their Phusion Cares website, intended to highlight the company's community involvement, charitable giving, and employee activities.[5]

Management

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  • Jaisen Freeman - Co-founder, Managing Partner
  • Chris Hunter - Co-founder, Managing Partner
  • Jeff Wright - Co-founder, Managing Partner[27]

See also

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References

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  1. ^ a b c d e f g h i "Crisis Management 101: The Four Loko Story". Beer Business Daily. March 10, 2011. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  2. ^ a b c d e f g "Phusion Projects Timeline". Phusion Projects. 2010. Retrieved 2011-05-03.
  3. ^ a b c "Update Regarding Our Reformulated Products". Phusion Projects. December 15, 2010. Retrieved 2011-05-03.
  4. ^ a b c "Local Phusion Projects Employees Volunteer with Food Bank for New York City". Phusion Projects. April 27, 2011. Retrieved 2011-05-03.
  5. ^ a b c d e "Phusion Projects Captures Corporate Social Responsibility Work with New Website". Phusion Projects. April 13, 2011. Retrieved 2011-05-03.
  6. ^ a b c d e f g Minton, Michelle (November 11, 2010). "Product Bans Are More Dangerous Than Four Loko". Open Market. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help) Cite error: The named reference "openmarket" was defined multiple times with different content (see the help page).
  7. ^ a b c d e f Manning, Matt (October 28, 2010). "Ban on 'Four Loko' would be crazy". The State News. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help) Cite error: The named reference "statenews" was defined multiple times with different content (see the help page).
  8. ^ a b Kowalski, Taylor (October 27, 2010). "Drinkers must use caution: fault of overconsumption lies with the partygoers, not Four Loko". The Daily Evergreen. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  9. ^ a b c d e Prusak, Brienne (March 26, 2011). "Decaffeinated version of Four Loko returns to Ann Arbor store shelves". Michigan Daily. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  10. ^ a b Field, Abigail (November 15, 2010). "The Case Against Banning Four Loko". Daily Finance. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  11. ^ a b c d Katz, Neil (October 28, 2010). "Did Alcoholic Beverage Sicken Students? Not Us, Says Four Loko". CBS News. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  12. ^ a b "Phusion Projects to Remove Caffeine, Guarana and Taurine from Products". Phusion Projects. November 16, 2010. Retrieved 2011-05-03.
  13. ^ "Phusion Projects Announces New Product: Four Loko XXX Limited Edition". Phusion Projects. January 4, 2011. Retrieved 2011-05-03.
  14. ^ "Modern Brewery Age: Four Loko now available in six and 12 packs of bottles". Phusion Projects. March 28, 2011. Retrieved 2011-05-03.
  15. ^ "Frontline: Four Loko: state picks wrong target". The Western Front. October 29, 2010. Retrieved 2011-05-03. {{cite news}}: |first= missing |last= (help); Italic or bold markup not allowed in: |publisher= (help)
  16. ^ "Phusion Projects Offers Information, Support to College Campuses Nationwide". Phusion Projects. November 5, 2010. Retrieved 2011-05-03.
  17. ^ Katz, Jeff A. (November 9, 2010). "It's Time Four Sanity". The Huffington Post (College Edition). Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  18. ^ Weiner, Juli (November 15, 2010). "What Will Senator Chuck Schumer Condemn Next?". Vanity Fair. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  19. ^ Mercants, Alyssa (November 16, 2010). "Treating a national drinking problem with one lazy ban is loko". Pipe Dream. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  20. ^ Mystal, Elie (November 15, 2010). "Nannies Win: Four Loko Stops Shipments to New York State". Above the Law. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  21. ^ Schachter, Abby Wisse (November 15, 2010). "Legal bans good only for the lawmaker". New York Post. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  22. ^ Smith, Trent. "Don't ban "blackout in a can," FDA is wasting time". Highlander Opinions (University of California, Riverside. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  23. ^ Seely, Mike (November 19, 2010). "Four Loko Bans Represent Government at Its Worst". Seattle Weekly. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  24. ^ Mystal, Elie (November 18, 2010). "Four Loko ban a crazy idea: Do what you will, young people will still mix caffeine and alcohol". NY Daily News. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  25. ^ Strong, Jonathan (November 19, 2010). "Is Four Loko dangerous? The FDA doesn't say". The Daily Caller. Retrieved 2011-05-03. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  26. ^ "Phusion Projects Launches Mobile Website, Taxi Finder". Phusion Projects. November 12, 2010. Retrieved 2011-05-03.
  27. ^ a b "Phusion Projects urges everyone to celebrate responsibly, legally and safely this New Years Eve". Phusion Projects. December 2010. Retrieved 2011-05-03.
  28. ^ a b c "Phusion Projects Donates to Gleaners Community Food Bank of Southeastern Michigan". Phusion Projects. January 25, 2011. Retrieved 2011-05-03.

Further reading

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