AriZona iced tea becomes an inflation folk hero by keeping its prices steady

April 15, 2022, 5:22 PM UTC

Death, taxes, and a 99-cent can of AriZona iced tea.

The costs of everyday food items have soared this year in the face of the highest inflation rates in four decades, and it’s hitting the wallets of Americans hard. But as prices of food and beverages continue to rise at gas stations and corner stores across the country, one thing has remained the same: the price of an AriZona iced tea.

Today, a 23-ounce can of AriZona’s iced tea costs just 99 cents. That’s the same price as when AriZona founder Don Vultaggio first introduced the drink 30 years ago.

The company’s ability to maintain its low prices at the same time most other products—including competitors like Snapple, Pure Leaf, and Brisk—have become more expensive has brought on a renewed recognition for the company and its mission to keep prices low. 

But the question still remains: How is AriZona able to keep prices steady while the rest of the world gets pricier? 

The answer lies with Vultaggio, who today co-owns the company with his two sons. According to Vultaggio, the price of AriZona’s iced tea won’t increase because he won’t let it happen, even if it means the company temporarily loses money.

“I’m committed to that 99-cent price—when things go against you, you tighten your belt,” Vultaggio told the Los Angeles Times earlier this month. “I don’t want to do what the bread guys and the gas guys and everybody else are doing…. Consumers don’t need another price increase from a guy like me.”

AriZona, a privately owned business, is an outlier in the consolidated beverage industry largely dominated by giants like Coca-Cola and PepsiCo. Its independence allows Vultaggio to control the price of its products even in times of hyperinflation.

AriZona sells roughly 1 billion 99-cent iced teas annually, accounting for 25% of its total revenue, Vultaggio told the Los Angeles Times. It’s the company’s best-selling beverage, though its other offerings, like fruit drinks and energy drinks, sell for higher prices and produce higher margins.

The company’s decision to maintain its low prices comes at a cost. Vultaggio told the Los Angeles Times that the product is currently less profitable than it was before the pandemic, as the cost of many of the tea’s ingredients have increased. 

“Your company has to deal with cost increases, but your customers have to deal with cost increases too,” Vultaggio told the Los Angeles Times. “And if you break their back, nobody wins.”

For AriZona, maintaining its prices is a means to keep a promise to customers that it made three decades ago. And if engagement on social media proves anything, Vultaggio’s plan is working. 

On Thursday, the company tweeted a meme depicting a giant (AriZona) towering over its normal-sized opponent (inflation) in battle. The tweet amassed more than 540,000 likes and 80,000 retweets as of Friday afternoon.  

AriZona had not responded to Fortune’s request for comment at the time of publication. 

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