If you thought nothing could get less expensive than water, you're wrong. AriZona iced tea has become a ubiquitous bodega drink because of its insanely cheap, 23.5-ounce cans. But how? Today, food costs about 50% more than it did in 2000, which is around the time AriZona decided to cement its $0.99 price tag on all of their cans, much to the dismay of bodega owners everywhere.
Even Coca-Cola, which cost a nickel for 70 years, had to eventually cave in to rising costs. Despite the price point, AriZona tea hasn't gone the way of Netflix and MoviePass, who struggle to make profits because of their low price points, or the way of Amazon, a company that keeps their costs minimal by treating warehouse workers and delivery drivers poorly. AriZona tea seems to be a mysterious entity impervious to inflation.
They Save Gas Money By Having Their Truckers Drive At Night
AriZona has had to make some interesting shifts in their business to limit costs. While most companies would simply bite the bullet, AriZona is pretty resourceful, however strange their efforts may be.
In a bizarre effort to cut down on shipping costs, the company strictly moves their trucks at night. During the night, there's less traffic, which means drivers are stuck on the road for less time. Less time means a smaller payday and less money spent on fuel. The company also has 40 warehouses across America, so their drivers don't ever have a long way to go.
They've Doubled Their Production Speed
Rather than changing their formula, AriZona researches and implements new technology to streamline their manufacturing. The more drinks they can produce in the smallest amount of time, the more profits they can make. The concept is especially vital if you're selling something that costs less than a pack of gum.
They Have Just One Factory—And An Army Of Independent Drink Makers
Last year, Arizona's "Arnold Palmer" brand, surpassed sales of Diet Snapple ($200M). Cans were produced at a 1,200 PER MINUTE pace pic.twitter.com/yTzPjChBm5— Darren Rovell (@darrenrovell) September 26, 2016
For a huge company, one factory seems absurd, but despite selling over $1 billion worth of product per year, AriZona remains a rather DIY operation. There's just one AriZona plant in Maplewood, New Jersey, which saves a whole lot of cash. Most drink manufacturers have to shoulder a hefty price tag for hundreds of plants around the world. AriZona keeps their costs down by contracting independent drink companies to manufacture their drinks. Their teas are brewed by more than 70 independent drink makers.
A Corn Syrup And Aluminum Price Surge Almost Bankrupted The Company, But They Found A Solution In Plastic Bottles
AriZona has maintained its brand for a long time, but they did require a brief reprieve from the aluminum tall boys that made them famous. In 2009, the company was faced with surging aluminum and corn syrup costs, two staples for their $0.99 can. To combat the momentary price surge, the company launched a line of 20-ounce plastic bottles. The bottles were priced at $1, a penny more expensive for slightly less product.
Though AriZona went back to their classic cans after the price surge subsided, the bottles still exist and remain popular among shop owners who detest Arizona's fixed pricing. You'll primarily see the bottles paired with some of their more obscure flavors like mango, watermelon, or fruit punch.