(NEXSTAR) – If you look around the shelves of your local grocery store or pit stop, the prices of almost everything have risen steadily since the 1990s. But at least one price remains exactly the same. A 99 cent can of iced tea.
In 1997, a prominent 99-cent price label was added to the colorful design of Arizona’s 23-ounce beverage cans, said founder Don Vultaggio. If the price had been adjusted just to accommodate inflation, it would have nearly doubled today.
In addition to inflation, the last two years alone have brought supply chain disruptions, skyrocketing aluminum costs, cargo delays, labor shortages and record-breaking gas prices. So how is it possible that the price of the company’s iced tea hasn’t dropped a penny?
Vultaggio says that sometimes the company needs to tighten its belts and sometimes get creative.
For example, consider rising commodity prices. The cost of aluminum (for cans), corn (for corn syrup), and oil (for freight) are all key to Arizona’s business. Vultaggio keeps track of them closely, but doesn’t make you nervous about swinging from week to week.
“Is it a long-term trade when you see things soaring?” Vultaggio says he asked himself. “Is that where you belong? Because if things stay there, you have to make long-term decisions. increase.”
Vultaggio, he noted, has come under scrutiny for the rising costs of doing business. “It’s an easier way for me to make decisions, but a lot of corporate Americans… are forced to do things I’m not forced to do.”
Vultaggio said Arizona has found a way to lower prices instead of raising prices. According to Vultaggio, trucking was a huge cost to the company. (“We don’t ship marshmallows,” he quipped.) Shifting a significant amount of their transportation to rail helped mitigate some of those costs.
The company recently built a new plant with high-speed equipment capable of discharging 1,500 cans per minute. We’ve also made changes to the can lid, using less aluminum to make it lighter. They have opened many factories across the country, so you don’t have to drive to a store or gas station to get your products.
“These are the kinds of things we do behind the scenes that don’t impact consumers,” he said. “What manufacturers have to understand is something I learned a long time ago: deal with what you can fix. What’s out of your control, we can’t help. But if you Anything you can control is embarrassing if you haven’t done anything about it.
Can Arizona keep prices much more stable? Vultaggio says the situation is no worse than it was a few months ago, but better. Aluminum prices have fallen from pandemic highs, and fuel prices across the country have started to fall in recent weeks.
“We are not even thinking about raising prices now because some things that were really weighing us down have eased,” he said.
By keeping the price of a can of iced tea the same, Arizona can also brag about how it keeps the price the same (and they do so on the company’s website). The company doesn’t buy any ads, so it needs to get customers to pay attention, and Vultaggio thinks so.
“We made the decision (not to change our prices) because consumers are being squeezed in every corner of their lives. I thought it would be a great gesture to our customer base.”