One Common Brand Bucks Inflation Trend

As 'LA Times' reports, AriZona Iced Tea has been 99 cents for 30 years and isn't changing
By Mike L. Ford,  Newser Staff
Posted Apr 17, 2022 3:30 PM CDT
One Common Brand Bucks Inflation Trend
   (Getty - gregvr8156)

(Newser) – Nobody needs a headline to know prices are up. It’s obvious with pretty much everything involving price tags and supply chains, including the ready-to-drink iced tea market. While prices for other major products in the beverage aisle are up across the board, per the Los Angeles Times, there remains one notable exception: AriZona Iced Tea. The company’s 23-ounce core product is still only 99 cents, and it’s been that way for 30 years. “I’m committed to that 99-cent price—when things go against you, you tighten your belt,” company founder and Brooklyn native Don Vultaggio said. He’s making less per can, but he sells a billion cans per year in a crowded market where other major brands like Lipton and Snapple are all owned by global giants. Rival brands cost roughly twice the price.

Vultaggio and family now rank a comfortable 764th in Forbes' billionaire rankings, and their independence gives them flexibility on how to handle pricing. Coke still holds the record for longest-fixed drink price: 5 cents a bottle for 70 years, until 1959 when it finally broke “the nickel’s spell.” Coke was hemmed in by business contracts and its self-made infrastructure of vending machines that only took nickels. For AriZona, the famous "psychological effect" of the number 9 itself could be a factor; according to one economist, retailers with fixed prices that end in 9 “are more resistant to change across the market” during inflationary cycles. But Vultaggio has his own explanation: “It’s been like that since cavemen, the 99-cent price point was exciting then, and it’s exciting today.” Read the full story. (Read more inflation stories.)

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