by Blaise Runyon, News Editor
and Delaney Warner, Student Life Editor
The following story was written by a student on the staff of The Jaguar Times as part of Hilliard Bradley High School’s Journalism Production course.
Thirty years ago, a gallon of milk cost around $2.78, a gallon of gas would set you back $1.13 on average, and a 23-ounce can of AriZona iced tea was 99 cents. The current inflation rate as of February 2022 is 7.9%. Of course, prices going up is a normal part of economic growth, but the national inflation rate for the past 12 months is absurd. For context, the inflation rate from 2012 to 2020 ranged from 0.7-2.3, and the rate in 2021 reached 7%.
Despite this, cans of Arizona tea have stayed consistently priced at 99 cents. While many companies pay for large marketing campaigns, Arizona relies on word of mouth advertising. In an interview with The Los Angeles Times, Don Vultaggio, AriZona's founder and chairman, said, "I'm committed to that 99 cent price—when things go against you, you tighten your belt. I don't want to do what the bread guys and the gas guys and everybody else are doing. Consumers don't need another price increase from a guy like me." It’s this mindset that makes AriZona’s marketing campaign flawless. Every time someone tweets, blogs, or marvels over AriZona cans costing 99 cents, they reach thousands of people without spending anything. According to the founder, AriZona sells upwards of a billion cans every year. It’s true that they’re making less money than if the cans cost more, but they also probably wouldn’t sell as many if it did. While it may be “less” money, that still amounts to an estimated 284.65 million dollars of revenue.
Another similar situation is the infamous Costco hot dog which has been $1.50 since 1985 in the bulk retailer’s food court. Costco is making up for that money in other ways: their membership fees go up $5-10 every five and a half years. Similarly to AriZona, the low price is an incentive to shoppers and keeps their customer base loyal. As prices rise, more people become Costco members for the discount bulk foods.
77% of Bradley High School upperclassmen have purchased an Arizona tea in the past year. They’re obviously popular with the upcoming generation, so it’s safe to say they’ll be able to keep their 99 cent price for a while longer.