Arizona Iced Tea Is Still 99 Cents—Here’s How
Arizona iced tea has been 99 cents since 1994.
Ever wondered how Arizona iced tea manages to stay so cheap? The iconic big can has a tiny 99-cent price—and it’s been that way for almost 30 years.
With inflation going up, it seems like the price of everything is rising. However, Arizona iced tea remains at the same price point it always has, despite the price of high fructose corn syrup rising 300% in the past 20 years and the price of aluminum doubling in the last 18 months. These factors, however, are something the company anticipated—and they’ve chosen to take the hit over short-term profit. “Your company has to deal with cost increases, but your customers have to deal with cost increases too,” founder Don Vultaggio said in a recent LA Times interview.
Here’s how the company has kept its iconic 99-cent price tag over the years.
Arizona keeps costs down by relying on word of mouth instead of pricey ad campaigns and celebrity endorsements. This is a strategy grocery chain Aldi also uses to keep its prices low.
According to Vultaggio, “Most brands in America today believe they have to go out and have a Super Bowl commercial or do traditional advertising. When we first started, I didn’t have the money for that—so each can had to be like a billboard. That’s why I chose the big can. It stood tall.” The company continues to spend minimally on advertising compared to other bottled iced teas, relying on its can’s branding to attract customers.
Streamlining Production and Operations
The company also maintains a less-than-a-dollar price point by focusing on efficiency. Arizona packs its recycled aluminum cans—which use about half the aluminum as other beverage companies’—at twice the speed it did in the ’90s. They also ship the tea in lightweight trucks at night to avoid slowdowns caused by traffic. By lowering the cost of production and shipping, Arizona is able to pass the savings on to customers.
The company also continues to keep its entire operation lean, employing 350 people at its headquarters and only 1,500 companywide.
Building a Fan Base
PSA: Our recommended selling price for AriZona in the USA is still 99c! The can on the right is from Canada, where $1.29 converts to around 99c!
Don’t worry fam, we still got you 💚🌸😊 https://t.co/lZgHEsTBly
— AriZona Iced Tea (@DrinkAriZona) January 20, 2021
While the company’s fans love the price (it helped Arizona knock Snapple, the previous industry leader, off the top of the tea heap), not everyone is happy about a 99-cent beverage. Some retailers slap $2 stickers over the “99 cents” that’s printed on the can to upcharge customers.
But Arizona’s not having any of that. The company started a #99centsequals99cents hashtag on social media in an attempt to put retailers in their place. Vultaggio knows where his customers are coming from and how important the price is to them. “I started out as a blue-collar guy, and budgeting your finances on a daily basis was a part of life,” he said, explaining why keeping the current price was so important. The only place where a different price is printed on the cans is in Canada, where 99 cents turns to $1.29 thanks to the currency exchange rate—and the company is quick to reassure customers who see it.
At the end of the day, Arizona knows its 99-cent can has a fan base marketing can’t buy. Thankfully the company doesn’t plan on changing the price anytime soon.
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