Tuesday, November 9, 2010

Four Loko And the End of RTD Caffeine/Alcohol Beverages

Sometime in July, I had arrived at the Mad Dogs cricket ground in Greenwich, CT and had begun the process of getting ready for the game. I unlocked the front gate and the club house - all pretty normal. Our ground is located by the local recycling center (ok, the dump) and is often used by the local teens to do what teens do. They disappear into the nearby woods during the day to get high. And at night they hang outside our clubhouse to drink a beer or three. Normally this ends with the ritual smashing of bottles on our steps, requiring some clean up. But not this time.

The alcohol of choice for the previous evening - and would be for the rest of the summer - was Four Loko.

Four Loko is a caffeinated malt liquor. As an article in Fast Company put it, one 23.5 oz can contains the equivalent alcohol of a six pack of Budweiser (yes, its over 12% alcohol by volume) and the caffeine equivalent of two Red Bulls (around 160 mg).

At the time, I was happy that we just had a few cans to throw away, somewhat surprised to see another alcohol/caffeine product and noticed how spilled product more resembled a New Age juice drink in smell and color, rather than a beer.

Later at the local bodega (yes, there are some in Greenwich), I saw the cans, on the bottom shelf, and priced at $3 each (double the normal price), I asked the owner how it was selling. He responded "Like you would not believe".

I googled the product at home to discover that 4 Ohio State grads had started the brand and were trying to get their idea off the ground. Unsurprisingly however, they were becoming the new bete noir of the campaign against alcohol/caffeine.

The "caffeine+alcohol" issue has been under debate since last year. The argument is that the depressant effects of alcohol are masked by caffeine's stimulant effects, thereby enabling the drinker to imbibe for longer, and causing them to drink too much, which results in more people drinking and driving, getting into fights and generally becoming a menace to society.

And we all know how much the media  likes a "menace to society". In 1976 it was the Sex Pistols (well at least in the UK), In 1988 it was wine coolers, in 1997 it was Smirnoff Ice, Zima and other "alcopops", in 2000 it was Red Bull and Vodka, last year it was Sparks (only 6% alcohol), and today it is Four Loko.

This is a simple and easy story for local TV, and its easy to get a dramatic quote from parents, college presidents etc etc.

A few examples of the hysteria are here:

New Mexico

OK... a few observations

The real insight here is that Four Loko has a real value proposition. - Fruit taste, and a significant kick that does not put you to sleep - all for around $3.

The image and reputation of the product are creating the phenomena...  getting the names "liquid cocaine" and "blackout in a can" are great for their young male purchasers - but a real scare for the rest of puritan American society. Remember prohibition only ended 78 years ago.

Four Loko has also become a favorite for young urban black and hispanic drinkers. And they are also making viral videos for the brand.

Youtube is also the location of viral videos in competition to see who can chug the product fastest.

Or Shotgun it

or Beer Bong it...

Alcohol and caffeine is not inherently bad for you. Like other recreational substances, it is about your tolerance and ability to be responsible with it. Four Loko has combined taste, effect, branding and price into a powerful proposition that engages and excites its consumers - while scaring just about everyone else.

So go and buy one for the experience now - I would guess that it will only be available on the black market by 2011.

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