AriZona beverage company co-founder Don Vultaggio vowed to maintain the brand's iconic 99-cent can, but to keep that promise amid rampant inflation, something else had to give.
At the beginning of the year, the New York-based company (nope, not Arizona) raised the price of its 20-ounce bottle, what it calls "Tallboys," from $1.00 to $1.25, up 25%, in the Northeast, its largest market.
"We changed the price in certain markets at the beginning of this year," he told Yahoo Finance in a phone interview. When asked if the hikes would take place in other markets, he said, "Right now, we're not quite sure."
The decades-long promise of 99-cent cans was part of the decision to raise that price, he said.
"We have this distinctive 99-cent can, and our goal is to hold that price. Sometimes you have to offset it with other things you do within the portfolio of a product," Vultaggio said.
A rise in the cost of plastic was another reason behind the increase. "We've kind of wrung out all the opportunities from speeding up lines and changing bottles and doing the things that we can do behind the scenes, so that we don't have to affect price, but we ran out of options, so we were forced to make a move there," Vultaggio said.
Other rising costs hit the family-owned company, too. "Things like freight … and sugar … energy … electric gas and and labor costs are out of our control."
'Until something drastic happens, we're gonna hold that price'
Though the price of the 99-cent can will remain, the can itself recently became one ounce smaller.
"The 23-ounce can is now 22 ounces. The reason for it is, we went to a 206 end [the size of the can lid]. We changed the can lid in order to save some aluminum," Vultaggio said.
Will the 99-cent can be here forever? Vultaggio said they're trying.
"I don't know what the future holds, we're gonna do the best we can and continue to do the best we can to maintain the most aggressive pricing on all our packaging," he said. "We never want to compromise quality of drink, so that's not an option and so then we're forced to deal with some of the things that are out of our control, but the can, we're committed and until something drastic happens, we're gonna hold that price."
Compared to mega conglomerate beverage companies though, he said AriZona remains competitive.
"We're dramatically less expensive than a lot of the competition … for instance, a Coca-Cola 20-ounce [is] probably north of $2.50 … [Ours is] a tremendous value [at $1.25].
He added that the bottle price hike was not an easy decision to make for the 30-year-old business, and that he hopes customers will remain loyal.
"I hate to raise prices, I'm an old salesman and the the worst day in a salesman's life is when he has to to go to a customer and say you got to pay more," he said. "But on the other side of it, we've done all we can to hold [the] price."
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected]
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