Goodbye JOOSE!
FDA set to ban caffeine in alcoholic beverages
By David Kesmodel
The Wall Street Journal
Four Loko, Joose and other fruit-flavored, alcoholic beverages will no longer be able to contain caffeine under a series of regulatory actions expected from the Food and Drug Administration and other agencies this week, according to U.S. Sen. Charles E. Schumer (D., N.Y.) and people familiar with the matter.
Phusion Projects LLC, maker of Four Loko, the best-selling caffeinated malt beverage, said Tuesday that it would remove stimulants caffeine, guarana and taurine from its products nationally.
"We are confident that we will continue to grow our brands and remain innovative," Chris Hunter, a co-founder of Phusion Projects, said in an interview.
The company's contract manufacturers already have stopped making caffeinated versions of Four Loko, he said. Phusion is taking the step after trying unsuccessfully "to navigate a difficult and politically charged regulatory environment at both the state and federal levels," he said.
United Brands Co., maker of rival brand Joose said it intends to follow the new regulations. Chief Executive Michael Michail said the San Diego, Calif., company would continue to "market Joose products in a legal and responsible manner."
The federal restrictions—scheduled to be disclosed Wednesday—follow a series of hospitalizations and deaths blamed in part on Phusion's drinks. Four Loko comes in a color-splashed 23.5-ounce can and contains up to 12% alcohol by volume.
The FDA plans to rule that caffeine is an unsafe food additive for alcoholic beverages, Mr. Schumer, who has been a staunch critic of the drinks, said in a statement.
For about a year—amid concerns from physicians and others that caffeine can mask the intoxicating effects of alcohol—the FDA has been reviewing the safety of malt beverages, vodkas and other alcoholic beverages infused with stimulants including caffeine. A spokeswoman for the agency would not comment on its plans.
The Federal Trade Commission, meanwhile, plans to notify manufacturers of the drinks that "they are engaged in the potential illegal marketing of unsafe alcoholic drinks," Mr. Schumer said. A FTC spokeswoman declined to comment.
The restrictions could have their greatest impact on Phusion Projects, a startup that launched Four Loko in August 2008 and has been growing rapidly ever since. Four Loko generates about $200 million in annual sales, estimates newsletter Beer Marketer's Insights.
Phusion Projects says it markets its products responsibly and that consumers combine alcohol and caffeine safely in mixed drinks such as rum-and-coke. The company this year hired public-relations giant Edelman to help defend its products, and recently has adopted a more conciliatory tone. On Sunday, it reached an agreement in New York state, in which it agreed to stop shipping Four Loko. The company then said it would introduce in New York state a version without caffeine.
"We're not turning a deaf ear to what's going on," Jaisen Freeman, a co-founder of Phusion Projects, said in a statement Sunday after the New York state accord was disclosed.
Phusion Projects was formed in 2005 by Messrs. Freeman, Hunter and Jeff Wright, all friends and recent graduates of Ohio State University. The three obtained a loan from the Small Business Administration and racked up debt on their credit cards. Their first product, Four Regular, struggled to catch on. In December 2007, the company nearly went out of business.
But the next year, Phusion came up with Four Loko. Its launch received a significant boost when the two biggest beer marketers in the U.S. vacated the caffeinated alcoholic drinks category.
Under pressure from state attorneys general, Anheuser-Busch InBev NV and MillerCoors LLC in 2008 agreed to remove caffeine, guarana and other stimulants from drinks such as MillerCoors' Sparks and Anheuser's Tilt. MillerCoors is a joint venture of SABMiller PLC and Molson Coors Brewing Co.
Four Loko "came out of nowhere more than any brand that we have seen in years," says Benj Steinman, publisher of Beer Marketer's Insights.
Four Loko, distributed by independent distributors who sell Miller Lite and other big beer brands, also offered a new twist. The drink carried up to 12% alcohol by volume, significantly stronger than earlier brands. For $3 to $5 a can, drinkers of the 12% alcohol version receive about the same amount of alcohol as in four 12-ounce beers.
"I can get a buzz from drinking half a can," Katelyn E. Jackson, a 22-year-old college student in Michigan said Tuesday.
She called it "ridiculous" that regulators plan to restrict sale of the drinks. "Maybe they should spend their time focusing on eliminating underage drinking rather than trying to ban certain drinks," Ms. Jackson said.
In recent weeks, even rivals in the alcoholic-beverage industry began to publicly criticize Four Loko and similar products. The drinks are "extremely concerning," Anthony von Mandl, chief executive of Mark Anthony Brands, which makes Mike's Hard Lemonade and other flavored malt beverages, said at an industry conference this month. The "explosion of inexpensive, high-alcohol caffeinated products…is creating a stain on our industry."
Write to David Kesmodel at david.kesmodel@wsj.com
By David Kesmodel
The Wall Street Journal
Four Loko, Joose and other fruit-flavored, alcoholic beverages will no longer be able to contain caffeine under a series of regulatory actions expected from the Food and Drug Administration and other agencies this week, according to U.S. Sen. Charles E. Schumer (D., N.Y.) and people familiar with the matter.
Phusion Projects LLC, maker of Four Loko, the best-selling caffeinated malt beverage, said Tuesday that it would remove stimulants caffeine, guarana and taurine from its products nationally.
"We are confident that we will continue to grow our brands and remain innovative," Chris Hunter, a co-founder of Phusion Projects, said in an interview.
The company's contract manufacturers already have stopped making caffeinated versions of Four Loko, he said. Phusion is taking the step after trying unsuccessfully "to navigate a difficult and politically charged regulatory environment at both the state and federal levels," he said.
United Brands Co., maker of rival brand Joose said it intends to follow the new regulations. Chief Executive Michael Michail said the San Diego, Calif., company would continue to "market Joose products in a legal and responsible manner."
The federal restrictions—scheduled to be disclosed Wednesday—follow a series of hospitalizations and deaths blamed in part on Phusion's drinks. Four Loko comes in a color-splashed 23.5-ounce can and contains up to 12% alcohol by volume.
The FDA plans to rule that caffeine is an unsafe food additive for alcoholic beverages, Mr. Schumer, who has been a staunch critic of the drinks, said in a statement.
For about a year—amid concerns from physicians and others that caffeine can mask the intoxicating effects of alcohol—the FDA has been reviewing the safety of malt beverages, vodkas and other alcoholic beverages infused with stimulants including caffeine. A spokeswoman for the agency would not comment on its plans.
The Federal Trade Commission, meanwhile, plans to notify manufacturers of the drinks that "they are engaged in the potential illegal marketing of unsafe alcoholic drinks," Mr. Schumer said. A FTC spokeswoman declined to comment.
The restrictions could have their greatest impact on Phusion Projects, a startup that launched Four Loko in August 2008 and has been growing rapidly ever since. Four Loko generates about $200 million in annual sales, estimates newsletter Beer Marketer's Insights.
Phusion Projects says it markets its products responsibly and that consumers combine alcohol and caffeine safely in mixed drinks such as rum-and-coke. The company this year hired public-relations giant Edelman to help defend its products, and recently has adopted a more conciliatory tone. On Sunday, it reached an agreement in New York state, in which it agreed to stop shipping Four Loko. The company then said it would introduce in New York state a version without caffeine.
"We're not turning a deaf ear to what's going on," Jaisen Freeman, a co-founder of Phusion Projects, said in a statement Sunday after the New York state accord was disclosed.
Phusion Projects was formed in 2005 by Messrs. Freeman, Hunter and Jeff Wright, all friends and recent graduates of Ohio State University. The three obtained a loan from the Small Business Administration and racked up debt on their credit cards. Their first product, Four Regular, struggled to catch on. In December 2007, the company nearly went out of business.
But the next year, Phusion came up with Four Loko. Its launch received a significant boost when the two biggest beer marketers in the U.S. vacated the caffeinated alcoholic drinks category.
Under pressure from state attorneys general, Anheuser-Busch InBev NV and MillerCoors LLC in 2008 agreed to remove caffeine, guarana and other stimulants from drinks such as MillerCoors' Sparks and Anheuser's Tilt. MillerCoors is a joint venture of SABMiller PLC and Molson Coors Brewing Co.
Four Loko "came out of nowhere more than any brand that we have seen in years," says Benj Steinman, publisher of Beer Marketer's Insights.
Four Loko, distributed by independent distributors who sell Miller Lite and other big beer brands, also offered a new twist. The drink carried up to 12% alcohol by volume, significantly stronger than earlier brands. For $3 to $5 a can, drinkers of the 12% alcohol version receive about the same amount of alcohol as in four 12-ounce beers.
"I can get a buzz from drinking half a can," Katelyn E. Jackson, a 22-year-old college student in Michigan said Tuesday.
She called it "ridiculous" that regulators plan to restrict sale of the drinks. "Maybe they should spend their time focusing on eliminating underage drinking rather than trying to ban certain drinks," Ms. Jackson said.
In recent weeks, even rivals in the alcoholic-beverage industry began to publicly criticize Four Loko and similar products. The drinks are "extremely concerning," Anthony von Mandl, chief executive of Mark Anthony Brands, which makes Mike's Hard Lemonade and other flavored malt beverages, said at an industry conference this month. The "explosion of inexpensive, high-alcohol caffeinated products…is creating a stain on our industry."
Write to David Kesmodel at david.kesmodel@wsj.com
posted by Jody L. Slaughter at 9:13 AM
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