One of the oft-referenced panels at the Beer Summit was comprised of the former frat guys-turned PAB kings at Phusion Projects. The thirtysomething guys rode a giant professional/pr fallout when their hot PAB, Four Loko, was banned by the FDA last fall. But the guys proceeded to handle the crisis in a way that Tiger Woods' camp should study.

HOW THEY BEGAN. Some exposition: Founders Jaisen Freeman, Chris Hunter, and Jeff Wright went to The Ohio State University, then broke off into disparate industries (investment banking, industrial gas) before recognizing the market Tilt and Sparks helped create. Their first major production run of 5,000 started in Dec. 2005, after an SBA loan of $100,000 and $150,000 from friends and family. But it wasn't an instant success. In '07 they came out with a higher alcohol, 10% ABV grape product, but it wasn't until they came out with the SKU of Four Maxed and finally Four Loko in late 2008 that things really took off. On-the-ground retailer reconnaissance and wholesaler feedback helped them greatly with new iterations.

THE "OH SH**" MOMENT. Then came the fateful Washington state college partygoers incident, and eventually, the FDA ban. (Notably, a year prior, co-founder Jaisen Freemen said the FDA sent a letter to 30 manufacturers that had caffeinated alcohol products, and his company commissioned and submitted a study deeming them safe.) Asked what they said when they found out about the FDA ruling: Jeff Wright deadpanned, "Oh sh**." They were, however, already prepared with an alternate line sans caffeine.

But they weren't prepared for the looming PR crisis. Or the larger one of $30 million liability of unsellable product in their and wholesalers' warehouses, which required a stronger curse word that Jeff's. Many states saw the FDA ruling as a ban, and many wholesalers opted to stop selling the product voluntarily, resulting in the aforementioned payout number. "We couldn't write that check," Jaisen said. "But most of our distributors ... said, 'we're here to help,' and that was the most shocking thing we could have heard them say." They got a high percentage of instant sign-offs on their plan to partially refund distributors for unsalable inventory over time. "At the end of the day, it was a wakeup call of who your real partners are - and aren't," Chris Hunter said. "We had wholesalers with over $1 million of inventory in their warehouses."

In the end, the three founders said they've personally put back in everything they'd made from the company so far, to keep the doors open, according to Jeff. They lost 30,000 points of distribution, which Tilt swooped in on. Some accounts that had 9 flavors now have 2.

WHERE THEY ARE NOW. Where they're still on shelves, however, the product is still selling like gangbusters. The latest IRI data for all channels, YTD ended Feb. 20 shows case sales up 51%, and dollar sales 'round the same.

Chris says the rug-pull allowed them to innovate. "We were riding high; every flavor we came out with was bigger than the one before," he said. But when they took a forced step back, they looked at opportunities. One was a limited edition 24 oz. can, whose flavor will change every few months. Another are the new 11.2 oz. bottles of their top-3 selling flavors they're rolling out to market, marking their splash outside of c-stores.

And they were adamant that they're not shopping the company. Jaisen said: "We had multiple opportunities from private equity firms to come and take a piece, but we turned down a lot of money personally and for the business because we didn't feel it was the right fit for our culture," he said.