The demonised drink: How has youth drinking evolved 20 years since the launch of alcopops?

An Australian farmer found a use for some leftover lemons, launching the alcopop industry – and a controversy that continues to rage

It was only ever meant to be a harmless experiment; a bit of fun after a boozy evening. When Duncan MacGillivray started to tinker with 40 crates of lemons and some brewer's yeast he didn't plan on becoming the saviour of a global industry, he had no intention of causing worldwide controversy and he certainly didn't mean to change the consumer behaviour of billions of people.

To some, MacGillivray's liquid creation revolutionised the alcohol industry and saved many farmers from ruin, to others it was as if Satan himself had offered to bottle-feed a generation of impressionable young consumers.

This year marks the 20th anniversary of MacGillivray's historic home-brew; the world's first alcopop – a concoction he named Two Dogs after the punchline of his favourite joke. It begat the genre of booze which today includes bestsellers such as WKD and Bacardi Breezer and is worth around £1bn a year in the UK.

Campaigners claim alcopops – or RTDs (Ready To Drink) in industry parlance – were cynically developed to encourage younger drinkers to the market and have subsequently helped fuel a nationwide binge-drinking epidemic. But while the genre has certainly garnered infamy, it has also helped keep a struggling industry afloat and has allowed for two decades of commercial evolution and innovation. In 1993 when MacGillivray, from Adelaide, Australia, brewed his first vat of fermented lemon juice, there were no plans to fundamentally alter the market. At the time the divorced publican just happened to live next door to a lemon orchard.

"Two Dogs happened by chance," he explains. "I had a pub. I loved lemons and my next-door neighbour had a load of lemon trees. He asked me round for dinner one night, we drank a couple of bottles of wine and then went for a walk across the bush."

During the stroll MacGillivray's neighbour explained that he was having trouble selling his lemons and that many were being left to rot. "I said we should try brewing them and the next morning I was woken early by the sound of his truck in my driveway unloading 40 boxes."

MacGillivray, a genial father of four, first tried the drink out in his pub. It went down a treat. Word spread and Two Dogs became locally popular because it allowed publicans to capitalise on a loophole.

MacGillivray explains: "At the time most of the pubs in Adelaide were tied to breweries f which largely dictated what beer they could stock. Publicans worked out very quickly that Two Dogs wasn't beer so they could put it on tap without contravening the restrictions of their agreements.

"In the beginning I made it solely for my pub but before long I would have publicans coming to me practically begging, so I started to make more. Eventually all the tied pubs and bars in Adelaide had it on tap."

After 18 months, 250 pubs in Australia were stocking it and, to keep up with demand, MacGillivray made a deal with Coopers Brewery, which began bottling it.

"We started off hand-squeezing the lemons. Then within six weeks we bought some second-hand juice extractors, but it was a huge amount of effort to keep up with the demand", he remembers. Initially the drink attracted praise.

"At the time it was the saviour to the lemon-growing market," says MacGillivray. "We were hailed by everyone from MPs to the press. Then, when there was an orange glut and farmers were throwing them away or feeding them to cattle, we came out with Two Dogs Orange."

The drinks industry was quick to realise the potential of this new niche market. Younger consumers bought it and at the time, the drinks market was stagnating, beer sales were declining. So a year after MacGillivray made his discovery, Australia's largest brewer, Fosters, launched Sub Zero – a sweetened alcoholic soda – to tap into the market. And by 1995 dozens of similar drinks had joined it, bottled in garish packaging with names such as Z, KGB and XLR8.

With Two Dogs in bottles and brewery backing MacGillivray decided to expand and in 1995 the first target was the UK. Merrydown Cider purchased the British rights and MacGillivray sent 40,000 cases on the six-week sea journey to the UK. But had the containers had barely left Australia, before Merrydown reps secured orders for 230,000 cases.

"That's when I dropped everything, hopped on a plane to the UK and licensed three UK breweries to start producing the stuff to meet the demand," says MacGillivray. "We had the first bottles out from the UK producers before the shipment got into dock."

In the UK other producers rushed to launch products which would appeal to the emerging younger market. With few controls on marketing, they soon started to cause concern.

Drinks-industry consultant John Band explains: "Alcoholic soft drinks in the UK were initially aimed at people who previously drank sweet cider or £2.50 sweet white wine – young adults looking to get drunk. The aim was solely to provide alcohol in an easily drinkable format, without any pretence of quality or style. The major brewers and spirits companies mostly stayed out of the fray, because their long-term business models relied on being able to convincingly say that they promoted responsible drinking."

Alcohol campaigners became increasingly concerned that these niche products were attracting underage drinkers. They had a point. The new wave of booze included products with names such as Spaced Out and Barking Frog as well Moo, an alcoholic milkshake, and shots of alcohol-infused jelly.

Moral panic ensued and the drinks industry was finally forced to act. After pressure from the beverage industry-funded watchdog the Portman Group, several manufacturers, including Sainsbury's, voluntarily axed offending lines and renamed and repackaged others.

Eric Appleby, chairman of Alcohol Concern says: "The whole alcopops thing came about because at that stage the industry had realised that they weren't getting the normal flow of drinkers coming through. Young people were more independent and drugs had taken over for a lot of young people as a recreational high instead of drink. The industry knew it had to do something. They will always deny it but it is pretty clear that the whole alcopops thing was about recruiting young drinkers and getting them at an early stage. Young people don't have a natural affinity for the taste of alcohol – this was a crash course, cutting out the middle man."

Figures supported the concerns. Prior to the Portman Group's actions, 55 per cent of 11 to 15 year olds who admitted drinking, said alcopops had become their tipple of choice. Throughout the firestorm of controversy most large multinational drinks companies were spectators, watching the excesses of overtly irresponsible projects with interest. However, at the turn of the century, lured by the undeniable commercial potential of alcopops, they began to develop the next generation.

Band explains: "The second wave – most obviously Smirnoff Ice, but also Bacardi Breezer, was related but positioned differently. The major drinks companies had noticed the success of alcoholic soft drinks and were looking to launch products that built on that trend while retaining a premium price and reputation. Both Smirnoff and Bacardi went for massive marketing campaigns aimed at older young adults, sponsoring festivals and club nights and established their drinks' reputations as something that somebody cool might be seen drinking in a club, whereas the only person who'd drink Two Dogs in a club was your embarrassing little sister. Basically the idea was to try to capture alcoholic soft-drink drinkers once they were old enough to be seen drinking in public. It worked pretty well and showed you could take flavoured sugar-water with grain spirit added and punt it to adults at a premium price."

Despite the market positioning of the new products – and the concerted effort to move them away from the alcopop label towards the more respectable RTD title – accusations that they attracted young drinkers persisted. Figures released by the Department of Health in 2002 revealed the average alcohol consumption of children aged 11 to 15 who were drinkers had rocketed from 5.3 units a week in 1990 to 9.8. Alcopops/RTDs were blamed.

By 2006 the issue had become deeply political. Politicians perpetuated the link between binge drinking and alcopops. Patricia Hewitt, then health secretary, proposed tax increases on them to price them out of young consumers' reach.

Two years later the measure became a Tory party pledge when George Osborne proposed a 50p tax hike on them. And by 2008 the Australian love affair with alcopops had soured too. Concerned by research which linked them to underage drinking, the nation's Labour government raised tax on them by up to 60p a bottle. The measure was controversial and the results have been questionable. A study published last year by the University of Queensland found that there had been no significant reduction in binge drinking-related hospital admissions since the tax was introduced. It suggested younger drinkers had simply switched their drink of choice. Many campaigners argued that the most effective way to stop problem drinking would be a minimum price per unit or an across-the-board tax hike.

Policy in the UK to deal with the perceived problems associated with young drinking has been equally disjointed. Osborne's promise never materialised. Instead the Coalition toyed with the idea of minimum pricing, as favoured by David Cameron. It is doubtful whether the proposal will become legislation however, as it does not appear to have enough support.

Internationally the concerns over alcopops rumbles on, ignited periodically by controversial new products. The most recent of these was Four Loko, a bend of alcohol and stimulants – caffeine, taurine and guarana – which has been described in terms normally reserved for war criminals. According to Time magazine, it was "implicated in several deaths, at least one instance of gang-related torture, and has contributed to alcohol poisoning and in many cases hospitalisation of teenagers and college students at several campus parties".

In September 2010, 20-year-old Florida student Jason Keiron drank over two thirds of a litre of Four Loko. Later in the day friends reported that he started acting erratically and at 1.30pm he started playing with a fellow student's handgun. Witnesses say he thought the safety catch was on when he put the muzzle against his head and pulled the trigger. He died of head injuries. His parents filed a legal suit against the makers of Four Loko, Phusion Projects.

The tragedy came at a time when the US Food and Drugs Administration (FDA) was carrying out an investigation into the effects of combining alcohol and caffeine in RTD products, a cocktail health campaigners pointed out promoted a state of wide-awake intoxication in which the inebriated person did not realise just how drunk they were. In its defence Phusion Projects offered that Four Loko was similar to drinks such as rum and cola and liqueur coffee. By the time the FDA finished its investigation and eventually ruled that caffeine was an unsafe additive in alcoholic beverages, several states had already banned the drinks. Under the weight of the FDA ruling and increasing public outrage, makers of all alcoholic energy drinks took the decision to remove caffeine from their products.

But despite these controversies, the industry has been unable to wean itself away from what has become a vital pillar of the drinks market. Unbound by the type of regulations which affect wines and spirits, product developers have been free to push the boundaries with RTDs. They evolved again as the recession hit to include pre-mix cocktail-style beverages developed by distillers and aimed squarely at people who could no longer afford to drink in expensive bars.

Alcoholic drinks analyst at Euromonitor Spiros Malandrakis says: "Recession cocktails came in a can and tasted surprisingly close to the style of drinks you would buy in a bar. They were for home consumption. After these came out the mainstream beer brands, which had seen sales decline for many years, decided they needed to do something too and have started to launch beer and RTD hybrid products which are malt-based shandy-style drinks. With RTDs manufacturers can do whatever they like. Experimentation and innovation is what continues to drive the category."

One such product launched last years was AIR – a virtually flavourless and odourless clear beverage; the Emperor's new clothes in a can. Today the first alcopops are viewed by many with a fond nostalgia. They were the drink of the moment for many; people who have now grown up to have mortgages and families and responsibility. They were the beverage market's version of Spangles, The A-Team and The KLF. They belonged to a specific place in time.

And that gives them commercial value. Last year, almost a decade after it ceased production, Two Dog's nearest rival Hooch was relaunched by Global Brands to cash in on this nostalgia market.

Malandrakis explains: "There is a market for people who remember Hooch. Many of them would no longer want to be associated with RTDs; the truth, and not many drinks firms will admit to it, is that these drinks introduced younger drinkers with the hope that they would later graduate to more sophisticated drinks. Hooch is not targeting over-35s, but their recollections of it could be used for a basis to expand the appeal to younger consumers."

Two Dogs also may not be finished yet. MacGillivray sold it to Pernod Ricard which then sold it to brewers Kirin before it was discontinued in 2011. At the time he asked to buy back the Australian rights. The brewer refused.

"I thought it would be nice to retire looking after the brand once again," he says. "But they said, Duncan, we have a masterplan for Two Dogs." Perhaps you can teach an old dog new tricks after all.