Arizona Iced Tea founder Don Vultaggio has stored the value of his well-known tea at 99 cents for 40 years whilst inflation has pushed the price of the whole lot up.
For him, that’s precisely the purpose.
Though Arizona’s personal prices of manufacturing have gone up with inflation, Vultaggio stated the corporate is in a robust sufficient place that it doesn’t want to lift the value of its signature beverage—simply but. In trade, they hope to realize goodwill and optimistic consideration from potential clients.
“We’re profitable, we’re debt-free, we personal the whole lot,” he instructed Right now in an interview. “Why? Why have people who find themselves having a tough time paying their lease should pay extra for our drink?”
The transfer to maintain a can of Arizona Iced Tea at 99 cents echoes Costco’s 4 decade effort to maintain its sizzling 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 instructed Fortune final month that holding its sizzling canine worth secure was important to its success. And in one in every of his first public statements, the corporate’s new CFO, Gary Millerchip, stated the $1.50 sizzling canine combo was “secure.”
Costco sells almost 200 million sizzling 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 stated.
Arizona’s and Costco’s strikes to maintain a key product’s worth secure 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 keep the value together with by altering the can, operating cans sooner on the manufacturing line, and bringing extra of its manufacturing to the U.S., Vultaggio stated in a 2022 CNN interview.
Nonetheless, Arizona Iced Tea has additionally needed to make some sacrifices. Final yr, the cans dropped from 23 ounces to 22 ounces so the corporate may get monetary savings on aluminum by altering the lid. That call in itself weighed on Vultaggio.
“I hate to lift costs, I’m an outdated salesman and the worst day in a salesman’s life is when he has to go to a buyer and say, ‘you bought to pay extra,’” he instructed Yahoo Finance. “However on the opposite aspect of it, we’ve completed all we are able to to carry [the] worth.”
Whereas Vultaggio couldn’t assure that the value of the 99-cent can will keep secure perpetually, he instructed Right now that it’s right here to remain for “the foreseeable future.”
“Perhaps it’s my little solution to give again,” he stated.