Ever wondered how a gas station staple, Arizona Iced Tea, manages to stay so cheap? The iconic big can has a tiny (99-cent!) price—and it’s been that way for more than 15 years.
The reason for the 23-ounce can’s low cost, according to chief marketing officer and co-owner Spencer Vultaggio, can be found in the company’s advertising. Arizona Beverages helps keep costs down, and the cans big, by relying on word of mouth instead of pricey ad campaigns and celebrity endorsements. (Psst: Find out how Aldi keeps its prices so low.)
“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,” Vultaggio said in a 2016 Thrillest interview.
The company also maintains an less-than-a-dollar price point by focusing on efficiency. Arizona packs its recycled aluminum cans—which use about half the aluminum as other beverage companies’—at about twice the speed it did in the ’90s. They also ship the tea in lightweight trucks at night to avoid slowdowns caused by traffic. By lowering the cost of production and shipping, Arizona is able to pass the savings on to you.
Building Their Fan Base
While the company’s fans love the price (it helped Arizona knock Snapple, the previous industry leader, off the top of the tea heap), not everyone is so happy about a 99 cent-beverage. Some retailers have taken to slapping $2 stickers over the “99 cents” that’s printed on the can in an effort to upcharge customers.
But Arizona’s not having any of that. The company started a #99centsequals99cents hashtag on social media in an attempt to put retailers and the price point in their place. Check out these other ways to be a savvy shopper.
“The cans are synonymous with 99 cents now. Our fans love it. They recognize it, and it’s a big part of our allure. People really do appreciate that,” Vultaggio said.
Arizona knows its 99-cent can has a fan base marketing can’t buy, and thankfully doesn’t plan on changing the price anytime soon.