Why Arizona Iced Tea Costs Less Than Water

Looking to quench your thirst but not willing to give up your parking meter change? Good thing those big cans of AriZona Iced Tea will never cost you more than $1.

But wait—why exactly is that? If you’re like me, you’ve probably never given much thought to how those containers of sugary beverage resist inflation. After all, they’re there. They’re delicious. Let’s not go asking too many questions.

It is kind of crazy, though, that AriZona iced tea costs less than a soda half its size—or even bottled water. Go ahead and try. I bet you can’t find a bottle of Dasani, Aquafina or even Poland Springs that’s cheaper.

This is nothing new: Those big, 23.5-ounce cans have sold for 99 cents since they debuted in 1992. In fact, the cans are stamped with the 99-cent price before they even leave the factory. This means there’s no chance for gas stations, corner stores or other retailers to inflate the price, no matter how much they might want to.

So how does AriZona do it—and why are they so benevolent to us?

One factor is simple longevity. The family-owned and -operated company committed to its 99-cent initiative years ago, and it’s not looking to change now.

We’ve been 99 cents for more than 15 years now,” chief marketing officer and co-owner Spencer Vultaggio told Thrillist. “It’s a big part of our overall strategy, and our business model is such that we don’t advertise for example, and we put those costs towards giving our consumer the value they want and expect.”

Originally, the price was just a clever marketing trick. It turned out to be so popular, though, that it stuck. Years later, it still works—so well, in fact, that the company barely spends any money on advertising.

“We feel like it’s more important to spend money on something that our customer really cares about, instead of buying billboards or putting our cans in the hands of some celebrity for a few minutes,” said Vultaggio.

Of course, the company has had to get creative to keep prices low. They now pack the cans almost twice as fast as they did back in the ’90s. They’ve also started making the cans with up to 40 percent less aluminum and more recycled materials.

Many other beverage companies use more expensive materials, spend millions of dollars on advertising or source from abroad (we see you, Fiji). All of this raises costs, which then gets passed on to the consumer.

So while you probably won’t see any billboards or commercials for AriZona beverages anytime soon, you’ll always know where to find them—and how much they cost. And you can bet that won’t be changing anytime soon.

“The cans are synonymous with 99 cents now. Our fans love it,” Vultaggio said. “They recognize it, and it’s a big part of our allure. People really do appreciate that. They’ve grown up with us, and they’ll always know they can head to their local store and our drinks will be 99 cents.”

The cans may cost 99 cents, but that kind of consistency? Pretty close to priceless.

Source:

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