Arizona Iced Tea founder Don Vultaggio has stored the worth of his well-known tea at 99 cents for 40 years whilst inflation has pushed the price of all the pieces up.
For him, that’s precisely the purpose.
Although Arizona’s personal prices of manufacturing have gone up with inflation, Vultaggio mentioned the corporate is in a robust sufficient place that it doesn’t want to lift the worth of its signature beverage—simply but. In change, they hope to achieve goodwill and constructive consideration from potential prospects.
“We’re successful, we’re debt-free, we own everything,” he informed As we speak in an interview. “Why? Why have people who are having a hard time paying their rent have to pay more for our drink?”
The transfer to maintain a can of Arizona Iced Tea at 99 cents echoes Costco’s 4 decade effort to hold its scorching canine combo at $1.50 regardless of rising prices—and, earlier, Coca-Cola’s half-century quest to maintain a bottle of the drink priced at a nickel. Costco’s former chief monetary officer informed Fortune final month that maintaining its scorching canine worth steady was important to its success. And in considered one of his first public statements, the corporate’s new CFO, Gary Millerchip, mentioned the $1.50 scorching canine combo was “safe.”
Costco sells almost 200 million scorching canines yearly at Costco meals courts, Fortune reported, and the staple meals has taken on a cultural significance of its personal and constructed up goodwill for the model.
The identical goes for Arizona Iced Tea, Vultaggio mentioned.
Arizona’s and Costco’s strikes to maintain a key product’s worth steady stand in stark distinction to the profit-at-all-costs tradition that has proliferated in company America over the previous few years, particularly with the rise of personal fairness. Costs have skyrocketed, due partially to huge inflation since 2021, however customers have complained that many merchandise have declined in high quality.
Arizona has made cuts and adjustments to assist preserve the worth together with by altering the can, operating cans quicker on the manufacturing line, and bringing extra of its manufacturing to the U.S., Vultaggio mentioned in a 2022 CNN interview.
Nonetheless, Arizona Iced Tea has additionally needed to make some sacrifices. Final 12 months, the cans dropped from 23 ounces to 22 ounces so the corporate may lower your expenses on aluminum by altering the lid. That call in itself weighed on Vultaggio.
“I hate to raise prices, I’m an old salesman and the worst day in a salesman’s life is when he has to go to a customer and say, ‘you got to pay more,’” he informed Yahoo Finance. “But on the other side of it, we’ve done all we can to hold [the] price.”
Whereas Vultaggio couldn’t assure that the worth of the 99-cent can will keep steady eternally, he informed As we speak that it’s right here to remain for “the foreseeable future.”
“Maybe it’s my little way to give back,” he mentioned.
