Four Loko

Phusion Projects was founded in 2005 by Chris Hunter, Jaisen Freeman and Jeff Wright after graduating from the Ohio State University.[6] As students they were active members of the Kappa Sigma fraternity, and many of their original drink blends were created in the fraternity mansion's basement and party room.[6] They had enjoyed caffeine mixed with alcohol, and recalled buying Thai energy drinks from a nearby Asian market to sell to other students at a markup, claiming that they were "importing the stuff from abroad". They would later describe themselves as "our own target market".[6]

In 2005, the entrepreneurial team designed a prototype "energy beer" now known as Four Loko. Marketed as a "premium malt beverage" in cherry and berry flavors, the drink contained taurine, guarana, caffeine and wormwood—the supposed psychoactive ingredient of absinthe.[6] After a year, the company was running low on investment and decided to drop the wormwood, focusing instead on improving the flavor and increasing the alcohol content.[6]

By 2008 the product had become popular and a variety of flavors were introduced into the US market.[6] At the start of 2009, the beverage was becoming successful and began to be marketed internationally. In October 2010 a new flavor called Lemon Lime was first produced. In 2022 a new flavor called Sour Cosmic Punch was introduced, as part of a collaboration with the Warheads brand of sour candy.

Four Loko contains carbonated water, sugar, and natural and artificial flavoring including FD&C Red 40. The drink is sold at 6%, 7%, 8%, 10%,12%, 13.9% or 14% alcohol by volume (ABV), depending on state regulations, and is packaged in 23.5 oz (695 mL) cans.

In 2009, a group of U.S. state attorneys general began investigations of companies that produced and sold caffeinated alcohol beverages on the grounds that they were being inappropriately marketed to a teenage audience and that they had possible health risks (blackouts).[13] The attorneys general were also concerned that these drinks could pose health risks by masking feelings of intoxication.[14] In December 2008, Anheuser-Busch, manufacturer of Tilt and Bud Extra, as well as MillerCoors, manufacturer of Sparks, agreed to reformulate their drinks.[1] In 2009, smaller companies such as Phusion fell under investigation because of their rise in market share.[1]

The drink came under major fire in 2010, as colleges and universities across the United States began to see injuries and blackouts related to the drink's misuse. The University of Rhode Island banned the drink from their campus on November 5, 2010.[15] The state of Washington banned Four Loko after nine university students aged 17 to 19 from Central Washington University in Ellensburg, Washington became ill at a house party in Roslyn, Washington. The students were hospitalized with blood alcohol levels ranging from 0.12 to 0.35 percent (0.30 percent being considered potentially lethal), and one student almost died according to CWU President James L. Gaudino.[16]

In October 2010, following the hospitalization of seventeen students and six visitors, Ramapo College of New Jersey banned the possession and consumption of Four Loko on its campus.[17] As a result, Worcester State University stopped the sale of all energy drinks and they, as well as Boston College, informed their students of the risks involved in consuming Four Loko. By November 2010, dozens of other colleges and universities sent out notices informing their students to avoid the drink,[18][19] while several more placed outright bans on their campuses.[15]

The Daily Collegian, Penn State's student newspaper, reported that on November 1, 2010 the Pennsylvania Liquor Control Board sent letters to all liquor stores urging distributors to discontinue the sale of the drink. The PLCB also sent letters to all colleges and universities warning them of the dangers of the drink.[20] While the board stopped short of a ban, it asked retailers to stop selling the drink until U.S. Food and Drug Administration (FDA) findings prove they are safe. Pennsylvania State Representative Vanessa Lowery Brown, sought to introduce legislation to ban alcoholic energy drinks in the state.[21]

Several stores, including ShopRite Super Markets, Tops Markets, Price Chopper and Wegmans voluntarily pulled the product from their shelves.[22][23] Shortly after, former Governor of New York David Paterson announced that Phusion was withdrawing the beverage from the state of New York as of November 19, 2010.[24][25]

On November 20, 2010, Oregon Liquor Control Commission's five citizen commissioners held an emergency meeting resulting in a 4-1 vote on the ban. The ban became effective immediately and was in effect until May 18, 2011.[26] The ban required businesses to cease the sale of alcoholic energy drinks and withdraw existing items immediately. The sale of the restricted products during this period carried a penalty of 30-day suspension of liquor license.[27]

Utah, which has a state-run alcoholic beverage distribution system, did not allow the sale of alcoholic energy drinks.[28] Michigan and Oklahoma voted to ban the sale of alcoholic energy drinks over health and safety concerns.[29][30] Additionally, the Washington State Liquor Control Board voted to ban the sale of alcoholic energy drinks, which went into effect on November 18, 2010. The vote came as a result of the incident at Central Washington University.[31] The New York State Liquor Authority banned their sale and distribution as of November 19, 2010. New York senator Chuck Schumer and New York City councilman James Sanders Jr. approached the Obama administration to ban Four Loko across the state of New York.[32]

On November 17, 2010 the U.S. Food and Drug Administration issued a warning letter to four manufacturers of caffeinated alcoholic beverages citing that the caffeine added to their malt alcoholic beverages is an "unsafe food additive" and said that further action, including seizure of their products, could be taken under federal law.[33] It declared that beverages that combine caffeine with alcohol, such as Four Loko energy drinks, were a "public health concern" and could not stay on the market in their current form.[34][35] The FDA also stated that concerns had been raised that caffeine can mask some of the sensory cues individuals might normally rely on to determine their level of intoxication. Warning letters were issued to each of the four companies requiring them, within 15 days, to provide to the FDA, in writing, the specific steps the firms will be taking.

The four companies that received the warning letter were:

• Charge Beverages Corp.: Core High Gravity HG, Core High Gravity HG Orange, and Lemon Lime Core Spiked
• New Century Brewing Co., LLC: Moonshot
• Phusion Projects, LLC (doing business as Drink Four Brewing Co.): Four Loko
• United Brands Company Inc.: Joose and Max

From weeks before the FDA ruling, many drinkers and people seeking financial gain purchased large quantities of the drink,[36] which created a black market, with many sellers charging nearly five times the normal retail price.[37] Four Loko appeared on Craigslist, and "collectible" cans of the drink were being sold on eBay.[38]

In late December 2010, a reformulated version of the drink was put on shelves. The new product packaging had exactly the same appearance as the original, but the caffeine, guarana, and taurine from the original drink had been replaced by food coloring agent Red 40.[39] Sales of the original drink continued, usually for a price of roughly $3 per 24 ounce can.[40]

• Jenkins, Billiam (November 24, 2010). "Loco Over Four Loko". Reason.