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As inflation soars, how is Arizona iced tea still 99 cents?
- chrismcb 5y agoBecause it is mostly water? And I don't think the price of water has changed much. Sure distribution costs have risen. But the cost of my soft drink hasn't changed much either
- slackfan 5y agoIt's 1.29 now.
- joecool1029 5y agoNot in the US, the tiktok was of a can priced in canadian peso: https://twitter.com/DrinkAriZona/status/1351916465889406976 https://twitter.com/DrinkAriZona/status/1351916465889406976
- bfgoodrich 5y ago
- magneticnorth 5y agoThe article is from 2 days ago, and Arizona's tweet about it seems to confirm they're still $.99 in the US https://twitter.com/DrinkAriZona/status/1513958532328030208 https://twitter.com/DrinkAriZona/status/1513958532328030208 I think in Canada they're $1.29 now, though.
- dwringer 5y agoI haven't seen one priced at 99 cents for a couple of years now. The best price in convenience stores where I live (US) is typically 2/$3.00. The cans don't even say 99 cents anymore, they seemed to start phasing that out after that episode of Atlanta someone else linked.
- adampk 5y agoIf you report the store Arizona will tell the store to sell at .99$ or they will stop supplying the store.
- throwaway48375 5y agohttps://drinkarizona.zendesk.com/hc/en-us/articles/1500003259781-Why-do-some-stores-charge-more-for-pre-priced-99-cans- https://drinkarizona.zendesk.com/hc/en-us/articles/150000325...
- bluedino 5y agoThey're still 50 cents a lot of the time at Walgreen's. Not quite that low, but I bought 3 for $2 today.
- goosedragons 5y agoThe Canadian cans used to be 99 cents too. They also used to be bigger. I haven't seen the 680ml Arizona cans in a while. Now I think they are 473ml.
- __s 5y agoIn Canada: https://www.reddit.com/r/ontario/comments/u320hi/i_no_longer_recognize_this_strange_new_world https://www.reddit.com/r/ontario/comments/u320hi/i_no_longer...
- pvm3 5y agoMSRP is $0.99, however, retailers can set their own price [1]. [1]: https://drinkarizona.zendesk.com/hc/en-us/articles/1500003259781-Why-do-some-stores-charge-more-for-pre-priced-99-cans- https://drinkarizona.zendesk.com/hc/en-us/articles/150000325...
- colinmhayes 5y agohttps://www.youtube.com/watch?v=fMUZ2sVjLfY https://www.youtube.com/watch?v=fMUZ2sVjLfY
- Slow_Hand 5y agoMy hero. Came straight here to post this.
- mc32 5y agoI mean, it's mostly (cheap) sweetened water... They may take some small margin hits but keep or grow market share.
- onemoresoop 5y agoSweetened water? Probably contains some tea too? It should probably be cheaper than that and at the same time not even worth ingesting.
- happytoexplain 5y agoThe negativity here falls a little flat - water, sugar, and tea isn't really something I think of turning my nose up at. Of course I assume it has a lot of sugar and is therefore unhealthy, but your ingredient list isn't exactly offensive.
- cbg0 5y agoI don't think the idea was to make it offensive, just to say that it's cheap to make.
- rpeden 5y agoI think the same is true for most drinks that you can buy ready-to-consume in small packaging. For me at least, the value is mostly in the production and supply chain that ensures the drink is created, bottled, and distributed to a phalanx of locations such that I can walk into any grocery or convenience store and be reasonably sure I can buy the drink I want in a single-serving container for a price I find acceptable. So I don't think the product cost of the liquid itself really factors into the equation. Or at least it shouldn't. I usually assume most of what I'm paying for the logistics that lead to the drink being available and ready to drink where and when I want it. I don't think the original comment was offensive, just that "it should probably be cheaper" misses the mark because for most drinks in this category, the price of ingredients shouldn't be a significant factor in determining its value to the consumer.
- seoaeu 5y agoThe "not even worth ingesting" part suggests they don't hold the product in high regard
- deleted 5y ago[deleted]
- janitor61 5y ago"Groceries are 8% higher than last year. Dollar stores: now dollar-and-a-quarter stores." - so, is it 8% or 25% ?
- Fatnino 5y agoWe need an 8 cent coin. Maybe put the faces of several recent/current presidents on it.
- edgyquant 5y agoThis may help you: https://en.wikipedia.org/wiki/Compound_interest https://en.wikipedia.org/wiki/Compound_interest
- LegitShady 5y agoI think the dollarama around here is up to $4-5 now.
- etempleton 5y agoIn college I would buy a can of Arizona Iced tea at the local drugstore and then walk over to the McDonalds and buy two Cheeseburgers for a dollar each. You can still-almost-do this over a decade later (a cheeseburger is usually over a dollar depending on the state).
- deleted 5y ago[deleted]
- colpabar 5y agoYou may actually be able to get more mcdonald's with the same amount of money now. Their app has all these deals like "free cheeseburger on orders of $1 or more", meaning if you spend $1, you get a free cheeseburger. I guess that requires a smart phone which isn't free, and of course the app will be taking as much data as it can access. But if you enjoy mcdonald's food, it seems to be cheaper than ever.
- dboreham 5y agoThis has been covered before in the context of how Coke was 5c for 75 years. I think there was a Planet Money episode on it.
- notriddle 5y agohttps://www.youtube.com/watch?v=Bcz0BJGEVUY https://www.youtube.com/watch?v=Bcz0BJGEVUY
- rhino369 5y agoSome of that is just that inflation fundamentally changed when we floated the dollar in 1971. We now purposely try to inflate our currency 2% every year. Before then there was inflation and deflation, but not a single trend. A dollar in 1800 was worth essentially the same as it was in 1933--though there were long periods where it was less and long periods it was more.
- monetus 5y agoIn a can and still usually cheaper than bottled water.
- Jamie9912 5y agoMaybe they will start selling it as a loss? Gets people through the door
- Digory 5y agoThe gas stations that sell this stuff need margin. Gas is closer to a loss-leader/break even for most.
- Ekaros 5y agoJust shows how massive the margin was before... Still cheaper than water is slightly interesting, but I guess the sugar might work as preservative...
- verisimi 5y ago"Water? You mean like in the toilet?" https://www.youtube.com/watch?v=-YZnORoAWkA https://www.youtube.com/watch?v=-YZnORoAWkA
- RicoElectrico 5y agoKind of ironic that its price in Poland is crazy high.
- Overtonwindow 5y agoCost of aluminum and flavored water, it’s not terribly expensive to produce.
- JohnWhigham 5y ago“I don’t want to do what the bread guys and the gas guys and everybody else are doing,” Vultaggio said. “Consumers don’t need another price increase from a guy like me.” Integrity like this is rare in the American business landscape. His successor most likely won't feel this way though.
- brk 5y agoIMO it is more Marketing than Integrity. I would be surprised if this article was completely organic, most likely their PR department reached out to journalists to do a story on how great this CEO/company is. Not saying he is not due his earnings for the product, but if his concern was fair pricing to consumers the product would likely be about 20 cents, maybe even less. Also, as the article notes, the company sells more than just these 99 cent cans, and they have not held all prices constant. It's a nice feel-good piece, but this guy and his sons are not worth $4B because they are looking out for the best interests of their customers above all else.
- mdasen 5y agoPrices are sticky and they're betting that their costs will come back down in the future. They don't want to hike prices, ruin their brand and market positioning, just to see things like aluminum prices come back to normal in 6 months and for customers to have moved on. While other drinks may have hiked prices over the years, I haven't noticed spikes in the price of other soft-drinks over the past few months. Their costs are rising too. I think most companies don't want to alienate their fans over what they're hoping will be transitory cost increases. If Coke hikes prices and people start trying Pepsi, will they come back? If Arizona hikes prices, do they lose the "just a buck" cliff that makes them seem a lot cheaper than anything more than a dollar? Does $1.50 look a lot closer to $2.50 than $1 does to $2? Do people buy a $1.79 Snapple or $1.99 Gold Leaf if Arizona is $1.29 (even if it is still both cheaper and larger)? Given that they're a private company and the owners are multi-billionaires, it seems reasonably wise to eat some margin over the short-term. It's not like they're struggling and it's not like they have lots of shareholders to appease on a quarter-by-quarter basis. I don't think people expect the cost of aluminum to stay at double long-term and if the Ukraine/Russia war ends, it seems like fuel prices will likely ease (and long-term it seems likely that Europe now has very strong incentive to reduce its dependence on Russian fuel). If costs remain high, they can re-evaluate this decision in 6-18 months while potentially missing out on a small amount of profits. $43M in increased aluminum costs over a year doesn't seem that much compared to a $4B net worth - especially if you're still making money, just $43M less. If I were them, I'd weigh it out: raise prices and potentially damage the brand long-term and risk a good bit of what the family has built over decades; or keep prices steady, potentially lose out on profits that would make us 1-2% richer, and still be able to re-evaluate this decision in a year. If I had $4B, I'd much rather keep consumer sentiment thinking that I'm the small quirky outsider offering them great value.
- gruez 5y ago>I haven't noticed spikes in the price of other soft-drinks over the past few months. Their costs are rising too I haven't noticed any "spikes" in soft drink prices, but I have noticed that sale prices have edged up around 15%. This is for name brand drinks, multi-packs, sold in grocery stores. I don't pay attention to regular prices so I don't know whether it's limited to just sale prices or to regular prices as well.
- ortusdux 5y agoThe stores near me are phasing Arizona products out for higher priced competitors. I'm assuming they make a better profit off of identically sized $1.99 cans of Monster green tea.
- mywittyname 5y agoI've been drinking Arizona tea since the 90s. Something they aren't saying they do, but I'm certain they are, is watering down the product. It's the beverage equivalent of shrinkflation. Their green tea in particular lacks flavor. I kind of wish they would bite the bullet and make a can $1.99 and bring back the full flavor 90s version.
- flatiron 5y agoIn high school in the 90s I worked at a place that hired lifeguards and then staffed things like condo and hotel pools etc so they didn’t have to. Sometimes we would get stuff like birthday parties and such. I was a lifeguard at a party for the ceo of Arizona iced tea. Never seen a house like that. Crazy how much money you can make selling sugar and water. From that experience they aren’t lacking.
- hn_throwaway_99 5y agoI find this very difficult to believe. The actual tea that is in an Arizona iced tea I'm guessing maybe costs ~5c or so, if that? Surely the packaging, water, sugar, transportation and storage costs are the vast, vast majority of the cost.
- bombcar 5y agoOnce you realize that Arizona Ice Tea is basically just a taller can with water in it when compared to a can of pop, it makes more sense how it can still be $.99. The main additional costs are a bit more aluminum and some more water, everything else is comparable. And the 99 cents is really tied to their brand; if they break it they get hurt more, so they'll push it as long as they "can" - likely introducing a smaller or larger can at some point.
- nimbius 5y agoI suspect the answer to this question lives deep in the supply chain in the form of sugar subsidies. Your taxes work to subsidize the production of overwhelming quantities of corn syrup. other flavours of iced tea like watermelon are sourced from GRAS (generally regarded as safe by the fda) aroma chemicals, similar to the ones in air fresheners. these are cheap to source and efficient to use.
- m3kw9 5y agoIncrease water to tea ratio
- raspyberr 5y agoI thought the whole thing with soft drinks is that they cost basically nothing to make but we're all used to paying 1000x their value.
- wly_cdgr 5y agoWhy not? It used to cost 1 cent to make, now it maybe takes 2 or 3....they can afford it
- orev 5y agoI’m not sure if there’s a formal name for this fallacy, but it’s pervasive in almost all financial reporting: the sticker price has nothing to do with the cost of materials; it’s driven only by how much people are willing to pay. As a manufacturer, if the cost to produce something is higher than what customers are willing to pay, then you simply don’t sell it. There are commodities where this doesn’t apply as much because there’s enough competition keeping downward pressure on the price so it floats just above the actual raw materials price, but other than that, this concept applies to most products.
- redorb 5y agoI've worked at a company now for 14 years - where we change what it cost plus a margin to make a fair living. Other competitors have started to 'charge based on the value made by the product'. We're winning by becoming the more 'fair and honest value' brand. I think 'looking into customers wallets' and charging them for the value they will create with your product is a bit lame. I understand my opinion is in the minority of at least other high level managers or owners of companies.
- EGreg 5y agoBut of course, the money surplus has to go SOMEWHERE... and eventually someone would defect, and take a loss to make up on volume. I have asked wholesalers this (who produce cars, lighters, etc.) and they say that they have a licensing agreement and can just kick out retailers who sell below MSRP too much. So those retailers would have to then get the goods from other retailers.
- RustyConsul 5y ago>kick out retailers who sell below MSRP too much i've worked alot in a bunch of company's when i was selling NSN's and mostly it works by your volume. You can sell at whatever price point you want but this is your price based on volume. Jobber: 500, at $1.30 distriibutor: 1000, at $1.20 wholesale: 10000, at $1.10 partner: 1000000, at $1.00 Sometimes it makes sense to sell some inveentory at a loss to ensure you maintain the 'bucket' and happens all the time.
- 5y ago
- tedunangst 5y agoIt would be great if a journalist called up the company to ask so we don't all have to guess.
- beaconstudios 5y agoThe author did exactly that: > “I’m committed to that 99 cent price — when things go against you, you tighten your belt,” Vultaggio said on a Zoom call in early April from his headquarters on Long Island, N.Y.
- Blackstone4 5y agoBecaused it is sugar and water!?!?
- ilamont 5y agoOne of the primary target markets appears to be tweens and teenagers, judging by the soft drink buying patterns of my kids and their friends. 99 cents means a lot to them (still). This brand offers frequent discounts ... I've seen them discounted to 75 cents at the local CVS, but that was during the early part of COVID when sales tanked.
- bitshiftfaced 5y agoWhat's not as obvious is that the retailer is shouldering some of the burden of the margin cut. Unless they want to argue with customers, they have to sell it at 99 cents like it says on the can. So even though they'd rather sell it at a higher margin as they do with other cold drinks, they have to accept less in order to carry it at their store. The only real alternative is not to stock it (or only stock the plastic bottle ones that don't have the price on the labeling). But if they do that, their customers might shop elsewhere next time. I'm guessing that Arizona knows this, and they want to hold onto this "retailer shares the reduced margin" advantage for as long as they can.
- blamazon 5y ago> unless they want to argue with customers "The price is on the can, though" https://youtu.be/hWObybWWGW4 https://youtu.be/hWObybWWGW4
- DavidPeiffer 5y ago>Unless they want to argue with customers, they have to sell it at 99 cents like it says on the can. Thank goodness for a couple companies marking their product like they do. Back in college, if you lived on campus, you were required to get a few hundred dollars of what amounted to University Currency. USD -> University Currency (CyCash in the case of Iowa State) was 1:1, but CyCash expired at the end of the school year, could only be spent at vendors on campus, and only on food or items at the convenience stores. Cosmic Brownies were like $1.29 as marked on the box. A box of Oreos was around $7, with all other pre-packaged item being 100-200% of a normal retail price. I bought a lot of Cosmic Brownies for exactly that reason.
- RainaRelanah 5y agoOurs just opened the boxes of little debbie products so they could sell individually one for the price of a box.
- aidenn0 5y agoThey can put a sticker over the price, which solves some of the problem. Some people will still be jerks and peel the sticker off then argue.
- izzydata 5y agoTheir margins must have been very high to begin with. Your margins decreasing from 700% to 680% probably doesn't matter too much as long as you aren't strapped with corporate debt from trying to expand relentlessly year over year.
- kylehotchkiss 5y agoLast time I got a 99 cent arizona tea, there was some slimy chunks at the bottom. Maybe mold? That's probably why
- paxys 5y ago99 cents for a can of soda is pretty standard, and ultimately that is what this is. The real question should be – how did they get away with overpricing it for so long.
- jedimastert 5y agoA can of Arizona is about twice the volume of a normal can (680ml vs 355ml)
- asciimov 5y ago15 Years ago, a 20oz bottle of soda was a $1 and 12oz cans were 50¢. The decade before that 12oz cans floated between 25-35¢. So 15 years ago, the 23oz can was still a good value compared to the 20oz bottle of coke. > The real question should be – how did they get away with overpricing it for so long. Your question is framed wrong, it should be how have coke bottlers been able to keep the price so high. After transportation costs, the bottle, cap, and label are the most expensive parts of the thing (the can in Arizona's case). The liquid inside is stupid cheap.
- qiskit 5y agoIt's not rocket science is it? They are either dilute or they hedge against commodity/inflation. The cynic in me says this is just paid advertising for Arizona Iced Tea. Every time there is a hike in inflation, we get a story about the 99 cent iced tea. Or maybe they keep it at 99 cents for the free publicity. I guess one could take an arizona tea from today and find one from 5 years ago and send it to the lab for easy analysis. But I'm too lazy for that and so is the journalist apparently.
- nakmachine 5y agoLooking through the comments I'm surprised at how many people it seems are still able to buy them for 99 cents. I haven't seen one sell for the actual can price in years. To the point that it was already a joke in 2016 (https://www.youtube.com/watch?v=fMUZ2sVjLfY https://www.youtube.com/watch?v=fMUZ2sVjLfY).
- racl101 5y agoUsually food that doesn't change is not affected by price changes tends to be some of the worst and unhealthiest. Arizona iced tea being a prime example. They should just call it diabetes in a can. Others are the Mickey D's cheese burger or the taco bell tacos. It's so tasty and addictive but so bad for you. I'm not surprised it still costs the same.
- russellbeattie 5y agoI accidentally discovered how to make pretty great iced tea at home: 1) Boil water. Pour into cup with tea bag. 2) Walk away and totally forget all about the tea for a few hours. 3) Walk back into the kitchen for something else, realize you now have a glass of cold black liquid that is undrinkable. 4) Remove teabag and pour the black ooze into a liter container, fill with cold water and sugar to taste and maybe half a lemon from a nearby tree if you have one. Made the most smooth, delicious iced tea I've ever had.
- Borrible 5y agoSo, it was a highly overpriced hype brand back then?
- conductr 5y agoYes - if memory serves me 99c was actually a high price for a drink in the 90s convenience store setting; or maybe on par with a 20oz soda. They came in big cans to make it worth the cost.
- antattack 5y agoTheir margins are sky high! Cost of water is less than 1c, flavor probably another 1c.
- hoppyhoppy2 5y agoThe aluminum can or plastic bottle, too, though that's still not the most expensive part. Unless you're driving to the Arizona bottling plant to buy it, there are warehouses and trucking companies and retailers involved who also have to cover their costs of operation and turn a profit.
- ramesh31 5y agoSugar water is really really really cheap. It wouldn't surprise me if the total cost to produce a can of Arizona was under 5 cents, with a vast majority of that being the aluminum can. Management is just smart enough to accept making a little less margin in exchange for maintaining the brand.
- HWR_14 5y agoThat's nothing. Coca Cola was famously a nickel from it's first bottling until 1960. That was 70 years of inflation. All because they had vending machines based on taking a nickel.
- gurjeet 5y agoTFA mentions that, and the reason why, as well.
- julianlam 5y ago> AriZona has been committed to 99 cents since 1996, when it started printing the price directly on cans to stop retailers from raising prices on their own. At some point between 2010 and now, shops in my area (southern Ontario, Canada) basically ditched following this. I haven't paid $1.13 for a can of AriZona for years now...
- syshum 5y ago99Cents is US Pricing, from the story "when photos of its Canadian cans — which sell for $1.29 Canadian — make the rounds online, people tend to freak. A tweet that said, “If this world is coming, I don’t want to live in it,” with a photo of a $1.29 Canadian can, went viral in 2021. The company had to take to Twitter to reassure its customers, explaining the concept of exchange rates. “Don’t worry fam,” the iced tea company wrote. “We still got you.”"
- mawadev 5y agoI like the statement and welcome it. Boundless expansion is pointless, isn't it? What I noticed is how package sizes go down, how ingredients change so it's taste is altered and so on... I just wonder how long we will keep doing that. What happens when you sell more package and less of the actual product, so people need 3 cans instead of 1 for the same effect, but you just produced 2-3x the trash?
- egberts1 5y agoLos Angeles Times should stick to reporting on their area’s inflation. It’s 2.25 for a tall Arizona Ice Tea at 7-11, Malibu.
- throwawaymanbot 5y ago