Essence: it is in pub (4)
I believe the answer is:
pith
'essence' is the definition.
('pith' can be a synonym of 'essence')
'it is in pub' is the wordplay.
'is in' indicates putting letters inside.
'pub' becomes 'ph' (public house).
'it' going within 'ph' is 'PITH'.
(Other definitions for pith that I've seen before include "Spongy tissue lining rinds of oranges, or the essential part" , "Essence; tissue inside rind" , "Fibrous part of fruit - essence" , "nub of matter" , "The white part of the orange" .)