Different people have different prices they're willing to pay for a product. That's the theory behind a demand curve. And in reality, if they raise the price to

Different people have different prices they're willing to pay for a product. That's the theory behind a demand curve. And in reality, if they raise the price to $1.29 or $1.49, there will still be people buying it. If the unit cost of Arizona tea ever went above the unit price, it simply would not make sense to continue manufacturing the product and selling it at that price, outside of contractual obligations. Loss leaders are a different analysis, and in order for that to work, Arizona would have to convince all retailers to sell the product at a loss; Costco's business is not selling hot dogs or rotisserie chicken, and that's why they can afford a loss on those. Even these, they still put in a lot of work to keep costs low (e.g., making the hot dogs themselves instead of buying from Hebrew National), so the loss in recent years has been either small, or they break even. But obviously even this isn't something that could be kept up forever, given long run trends in inflation; the purchasing power of a dollar was ten times greater in 1950, and if in 2090 they keep selling hot dogs for $1.50 when a comparable meal costs $15, it might make sense to have a Costco membership just for hot dogs and rotisserie chickens (unless they set the membership cost so high that it's unrealistic to recoup the cost in a year without, e.g., eating there every single day), and at that point their loss leader just becomes a loss. One final note I'll make is that average hourly earnings over the last couple decades have outpaced the rise in prices for most goods, even as the price of services outpace average hourly earnings; intuitively, the former should make sense, since with improved technology, the same good requires less labour to make. So food has gotten cheaper in real terms over the last few decades, as has shipping, while the opposite effect happens with services because of Baumol's cost disease. Because of this, even with inflation, more efficient products has somewhat blunted the impact on these manufacturers' costs, even though they too will one day have to increase their prices as well.