Chris Hunter, founder of several successful beverage brands, including the iconic Four Loko as well as the health-focused Koia, and the unique Not Your Father's Root Beer, shares the story of the gap in the market that he identified that led to the creation of Four Loko, and the process of fighting the government to keep it legal.Hear Chris's full interview in Episode 462 of The Action Catalyst.
So I started selling vodka for this company and they put me in quite possibly the most difficult situation that you can have, which is on premise, which is bars and nightclubs and restaurants in Chicago. And the reason it's the most difficult situation is because every brand is spending their money there. They have big budgets, right?
And so I was going to these places with no budgets and no experience, just asking them to believe my story or to believe in me and put the product in their stores. I did that for a couple months. Then he started expanding my responsibilities. So I managed off-premise, which is stores, grocery stores, liquor stores, whatever it may be, in Illinois. And then they expanded me to five states.
At that point, I realized that I understood, at least enough, the distribution game. In alcohol, it's a three-tier system. So you have the supplier, which is the creator of the product. You have the distributor, which takes the product to the bars or the store. And then you have the retail location.
And so I understood that I met enough people and I was selling a lot of the vodka that was being mixed in with Red Bull. I was 25. I was out also drinking a lot of vodka mixed in Red Bull. And so I said, you know, maybe we should try to do this as a combination ready to drink product. And so I called my old college buddy. He's the guy that I had tried to start Wild Havens with.
And I said, hey, I'm thinking of starting this thing. And he's like, yeah, I'm in. He was part-time in it. A couple months in, we realized neither of us really wanted to do the financial modeling and decks. And I had a buddy who worked for ABN Amro. I called him and I said, hey, what do you think? Yeah, I'm in. And that's how we got started. Wow. Yeah. Our investors were friends and family.
Where I started, being that I'm from Youngstown, blue collar, lower middle class, there was no money from friends and family for me. Fortunately, my partners both went to their families and they put in small amounts of money in retrospect for the size the company became, but that was our investment. We didn't have the experience or the connections to really go raise traditional funding.
And so we bootstrapped it. And looking back, luckily we did because I think that had we had more money in the early days, we would have just spent more money on all the wrong things.
And I'm kind of curious. I mean, one thing that popped out to me was the government regulations and a little battle that you had to kind of jump back into what you faced when you were faced with some of the government agencies trying to keep Four Local legal, right?
Yeah, it's a complex question and situation that was very intense, as you can imagine. But trying to summarize it up in a nutshell, it was really important for us to get aligned on how we were going to address these situations. They were very serious, right? To the point where we were being sued by the FDA, the TB, which governs alcohol. 18 attorney generals.
There were frivolous lawsuits, class action lawsuits coming out of the woodwork. There was a point where I was told by our legal representation, don't answer the door because you may get served papers or arrested, right? It was that intense. And so- For us looking back at it, or at least for me looking back at it, I was baffled because we played by the rules. Our beverage was approved by the TTB.
It was approved by every state that it went into. That included the formulas, the cans. Everything that we were being criticized for was legally approved. And so they had, they, broad sensitives, had applied pressure to other brewers that were doing similar things and they were much larger than us. And so for them, it was like, this isn't worth, you know, the juice isn't worth the squeeze.
And so they just voluntarily reformulated and changed the products they were selling. For us, it was the only thing we were selling. And so our take was, hey, we will play by whatever rules you put out there, but you have to make them consistent and fair because if we voluntarily change, all that does is leave the the door open for the next person to come along and do it until they get big. Right.
So in terms of communication, it really tested us. Look, my theory is like high highs and low lows will bond you, right? They're extreme and they're intense and, and it's easy to get along during those times, but it doesn't mean it's easy to communicate during those times. We were running at breakneck pace. We were trying to approach everything in an aligned fashion, but it didn't always happen.
And so our communication was, could have been better, but we got through it. Literally some life-changing moments during that time for you, right? Yeah, absolutely. Yeah.