A few years ago it was questionable that Four Loko would survive, let alone have money to invest in new products and marketing as it confronted harsh scrutiny from health advocates. But seven years after its highly publicized run-in with regulators, the fruity boozy brand is in growth mode, not just in the U.S., but across the globe.
Four Loko—which still occasionally appears in news stories about drunken mishaps—grew U.S. sales by 4.6 percent to $154 million in the 52 weeks ending Oct. 8, according to IRI. That compares with a 4.8 percent sales drop by all brands in the total flavored malt beverage category. With the sales wind at its back, Four Loko is now debuting the first TV ad in its 12-year history, while pumping out new products including its first-ever liquor, called Shots.
The TV ad won't get significant airplay; for now it is slated to run only on Viceland. The spot was produced by Vice's brand studio. The ad is "kind of our toe in the water," says Jaisen Freeman, co-founder of Four Loko-owner Phusion Projects. But "if this is successful and goes the way we want, we will definitely look at other channels." The investment comes as Four Loko fends off new competition from Anheuser-Busch InBev and MillerCoors, which are launching more higher-alcohol flavored malt beverage products in a move to keep economy-minded consumers from gravitating to cheap liquor.
The Four Loko ad, called "Quadruplets," features rapper Riff Raff. In the spot he arrives at a high-end nightclub, orders a Four Loko by holding up four fingers and is joined by four women in short skirts who fawn over him. The suggestive theme runs counter to the creative direction recently pursued by big beer brands, which have sought to move away from portraying women as sex objects. Freeman says the ad goes for irony more than sex appeal. "For us it was more about the contrast," he says. "You would never see Four Loko in a nightclub. Most times, the purchases are done in liquor stores and convenience stores," he says. "We tried to play off of that with something you wouldn't normally see."
That Four Loko even has a chance to make a TV spot is a minor miracle. The brand in 2010 was caught in the crosshairs of the Food & Drug Administration, which labeled the drink as unsafe because it mixes high-levels of alcohol and caffeine. Phusion Projects responded by taking caffeine out of Four Loko. But the brand kept the alcohol high. Its drinks contain as much as 14 percent alcohol-by-volume, compared with 4.2 percent ABV for the average light beer.
In the wake the FDA scrutiny, Four Loko quickly lost all of its distribution. "It took us three or four years after that to really recover financially," Freeman says. "Now that we have weathered that storm we are back in investment mode. We are adding brands. We are doing things like television commercials."
"A lot of people thought they would have been toast," says Benj Steinman, publisher of Beer Marketer's Insights. But "I think they had a solid branding proposition and they stuck to their guns." At times Four Loko has even poked fun at its critics. A 2011 campaign by Funny or Die made light of the media attention Four Loko gets.
Globally, Phusion expects to sell 100 million cans of Four Loko this year, buoyed by strong growth in Canada and Mexico, Freeman says. The brand will soon expand into Latin America, including Brazil and Argentina, he says. Four Loko is already in China, where it has high hopes. Chinese consumers are "craving edgy American products and Four Loko fits the bill," he says.
Blue Mofo, meet blue frostbite
Four Loko Shots launched late last year in a move to capture more business at bars. The drinks, packaged in neon-colored bottles, include varieties like Screwball, Dragon's Breath and Green Tornado. Another new product is called Bartender Series, which are cocktail-inspired flavored malt beverages that come in graffiti-designed cans. Varieties include Blue Mofo, Purple Hooter and Pink Scorpion.
The innovations come as Four Loko faces new competition in the high-ABV flavored malt beverage segment. Anheuser-Busch InBev is rolling out a Natural Light line extension called Natty Rush with flavors including hurricane punch, watermelon smash and blue frostbite. It checks in at 8 percent ABV, but the brewer plans to sell a 12 percent ABV version called "Rush+" in some markets.
MillerCoors markets a line of flavored-malt beverages called Steel Reserve Alloy Series that are also 8 percent ABV, including a just-announced flavor called Spiked Blue Razz. The marketing tagline is "Curious is Calling." The goal is to "appeal to and retain customers who may otherwise migrate to low-priced spirits, which have been stealing share from beer over the last few years," according to the brewer's corporate blog. Meanwhile, Mike's Hard
Four Loko isn't worried. "We know our lane. We know our consumer," Freeman says. "Since 2010 we've had over 30 different competitors come in and try to emulate…our product." Four Loko, he says, just "continues to push on."
