Hard to Swallow

"What was happening was that spirits were becoming more sophisticated, more masculine," he says. "They still love beer, and there's still great things about beer -- it's very convenient, it's refreshing, you can drink it with your buddies. So the big insight finally is, what if we combine the two? Create a hybrid beverage, which takes the best of the spirit world, which is what Smirnoff offered, and the best of the beer world, which is the ease and the convenience and the drinkability and all those other issues."

Smirnoff had a similar drink that was doing very well in the U.K. and Canada -- where the market is known as "alco pop" -- but that actually contained vodka. Vodka wasn't an option in the States, though, just this sissy-ass malt stuff.

"You're always trying to avoid the wine-cooler-type imagery," Rzasa explains. "Some things change, but some things never change: Guys will never drink a female beverage." Since women will drink a male beverage, the trick is to make a drink seem as manly as possible so that the more experimental drinkers will feel comfortable while their buddies down Coors Light.

After Diageo came up with a premium malt beverage version of its European product, Sterling-Rice called for a complete makeover so that Smirnoff Ice would exude a sophisticated, masculine vibe. The bottle was embossed to give it a rough-hewn but smooth texture, and the new red and silver label borrowed heavily from crests and shields. "It looks like it was designed for men," Rzasa says. "Because the actual product inside is easy to drink, you have to sort of counter that with the imagery."

After testing in the college towns of Austin, Texas, and Raleigh, North Carolina, Smirnoff Ice went national in 2001. It quickly became one of the best-selling Malternatives on the market, spawning a host of imitators that latched onto the idea of creating a light, sweet-flavored malt beverage and labeling it with a well-known liquor brand. The years 2003 and 2004 saw the introductions of Bacardi Silver, Skyy Blue and the truly disgusting Captain Morgan's Gold, each with an accompanying advertising blitz targeting twenty-somethings. Though Sterling-Rice's branding efforts ended with Smirnoff Ice, Diageo furthered its foray into the American market by launching the even more tough-guy Smirnoff Ice Triple Black, which is housed in a jet-black bottle and includes a NASCAR sponsorship. "We have quickly become the leader, not just in terms of innovation, but overall volume sales leader, with over 50 percent of the segment," says Andy Jensen, brand director for Smirnoff Ice, from his New York office. The introduction of Smirnoff Twisted 5, Ice's fruity counterpart that comes in black cherry, watermelon, raspberry, cranberry and green apple, helped boost Diageo over that halfway point. And even though the entire Malternatives category declined 4.2 percent last year, sales of Smirnoff Ice and its brand extensions grew 6 percent.

Paul Gatza, director of the Brewers Association of America, a not-for-profit trade group based in Boulder, offers a much gloomier prognosis for Smirnoff Ice and its Malternative cousins. According to the data he's looking at, the Malternative category peaked last year and has since declined 7.5 percent in sales in supermarkets and convenience stores, and 10.5 percent in drugstore sales.

"In general, I think the sense is that Smirnoff Ice is declining significantly as a brand," he says. "So a lot of what's happened with many of these flavored malt beverages is that they've extended into fruit type of flavors."

"But," Gatza adds, "Smirnoff Ice is definitely still the big dog on that scene."

"No one is allowed to sit next to anyone they know," a Cunningham operative explains loudly to the test subjects. This is designed to reduce socializing once drinks are served -- not that the room is a rager now. More participants filter in and look for seats. Natalie shifts uncomfortably in her chair and pulls her midriff top down over her back tattoo.

"Do you know if we get paid today?" whispers a girl behind me. John, a muscular guy in his mid-twenties, says he doesn't know. He sighs and looks toward Jessica, who's sitting in front of him at my table, exchanging some wordless, knowing communiqué. Eventually, Jessica turns and smiles politely at me over the empty chair between us. I ask if she's ever taste-tested here before. Not alcohol, she says, but she recently tested other products for Cunningham.

"Nuts," she says, lifting her eyebrows toward the sunglasses positioned on top of her head like stylish solar panels.

"You mean, like, salted peanuts?" I ask. "Mixed nuts?"

"Mm-hmm," she affirms, with a long drawn-out hum like she's savoring a few in her mouth right now. She threw away the nuts that were too salty, but got to keep a few cans of the good ones.

"Mmm," she nods.

As I try to gauge if this chick is messing with me or just really weird, another young woman sits in the chair between us. She has short, cropped hair, and strange disk-like earrings dangle from her lobes. The name tag on her pink shirt says "Lauren," but Jessica calls her Laurie, and they are trying to pretend that they don't know each other.