As inflation soars, how is AriZona iced tea still 99 cents?
Tall cans of AriZona iced tea have cost 99 cents since 1992. The family behind the company says it's committed to that price even as the prices of aluminum and corn syrup climb higher.
www.latimes.com
Gas is nearly six bucks a gallon. Groceries are 8% higher than last year. Dollar stores: now dollar-and-a-quarter stores.
But 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. Today, that's cheaper than most bottled water, 20-ounce sodas, iced teas and canned coffees on the market. If you could fill your car up with cans of AriZona Green Tea with Ginseng and Honey, it would be cheaper than L.A. gas by nearly 40 cents a gallon.
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How does AriZona pull this off while everything else goes up? The price of aluminum has doubled in the last 18 months. The price of high fructose corn syrup has tripled since 2000. Gas prices are pumping up delivery costs. One 1992 dollar, adjusted for inflation, is worth two 2022 dollars. But the 99-cent Big AZ Can, as the company calls it, persists.
The short answer: the company is making less money. The big cans are still profitable, but for the moment, they're much less so than a few years ago.
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Don Vultaggio, the 70-year-old, 6-foot-8 founder and chairman of the company, is choosing to take a haircut in order to keep the price flat and cans moving.
"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. 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. "Consumers don't need another price increase from a guy like me."
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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.