“Your company has to deal with cost increases, but your customers have to deal with cost increases too,” Vultaggio said. Vultaggio’s calculation is that raising prices and losing customers in the process just isn’t worth the short-term profit. enough to fill Echo Park Lake 10 times over. That amounts to 255 million gallons of AriZona iced tea sold, according to data from Beverage Marketing Corp. by volume in 2020, second only to PepsiCo’s slate of Lipton, Pure Leaf, and Brisk. Pure Leaf, the upscale Pepsi-Lipton label, goes for $2.09.ĪriZona products commanded nearly 16% of the ready-to-drink tea market in the U.S. An 18.5-ounce container of Gold Peak, Coke’s brand, costs $1.99. AriZona was cheaper, but only because it contained 50% more tea per can. When Vultaggio started out, Snapple also charged 99 cents for its signature 16-ounce glass bottles. Its fruit drinks, energy drinks, bottled teas, snacks, hard seltzer, and other offerings move less volume, but have higher prices and higher margins. The company sells about 1 billion 99-cent cans each year, Vultaggio said, which makes up about 25% of its total revenue. Forbes puts their combined net worth at over $4 billion, all from AriZona, placing them among the thousand richest people in the world. Today, he co-owns the company in its entirety with his sons, Spencer and Wesley, who serve as chief marketing officer and chief creative officer, respectively, and joined him on the call. He decided to get into the iced tea business then and there. He noticed that people were drinking Snapple, even though it was freezing outside. Vultaggio, a Brooklyn native with the accent to prove it, got the idea for the tea company when he was running his route as a beer distributor in Manhattan. He has the power to make a call like that because AriZona is one of the few independent private companies remaining in the consolidated world of nonalcoholic packaged beverages, a market dominated by PepsiCo, Coca-Cola, and Keurig Dr Pepper, which owns Snapple. “Consumers don’t need another price increase from a guy like me.” Even though his costs are higher, “I don’t want to do what the bread guys and the gas guys and everybody else are doing,” Vultaggio said. “I’m committed to that 99-cent price - when things go against you, you tighten your belt,” Vultaggio said on a Zoom call in early April from his headquarters on Long Island, N.Y. The big cans are still profitable, but for the moment, they’re much less so than a few years ago. The short answer: the company is making less money. But the 99-cent Big AZ Can, as the company calls it, persists. One 1992 dollar, adjusted for inflation, is worth two 2022 dollars. Gas prices are pumping up delivery costs. The price of high fructose corn syrup has tripled since 2000. How does AriZona pull this off while everything else goes up? The price of aluminum has doubled in the last 18 months. If you could fill your car up with cans of AriZona Green Tea with Ginseng and Honey, it would be cheaper than L.A. Today, that’s cheaper than most bottled water, 20-ounce sodas, iced teas and canned coffees on the market. Dollar stores: now dollar-and-a-quarter stores.īut a giant 23-ounce can of AriZona iced tea still costs 99 cents, the same price it has been since it hit the market 30 years ago.
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