Will Inflation Affect The Price Of AriZona Iced Tea's 99-Cent Deal?

It's no secret inflation has been pummeling food prices for much of 2022. According to the Consumer Price Index, prices overall in September were up 8.2% over what they were in September 2021. Prices for "food at home," such as that purchased at the grocery store or convenience store, are up a solid 13% over what they were a year ago. Many grocery staples have famously increased in price, such as how egg prices are through the roof for the third time this year. Big brands are feeling the pinch, too. Fast food giant McDonald's even raised its prices, and did away with its long-standing dollar drink deal, claiming it was no longer supportable (per Wall Street Journal).

While Mickey D's raised prices outright, other brands have turned to the sticky practice of "shrinkflation" to combat inflation. Shrinkflation, according to CNBC, is "when consumer products get smaller in weight, size or quantity while their prices stay the same or even increase," with the idea being that consumers are less likely to notice a drop in net weight or item count than they are to notice a higher price, according to NPR.

So which of these practices can we expect to see from canned iced tea company AriZona, whose 99-cent price has come under fire as prices skyrocket around it?

99 cents no more?

As of now, AriZona Iced Tea will be enacting neither price increases nor "shrinkflation." Or at least that's the word on the street, although time will tell if AriZona will take cooler-mate Gatorade's lead and shrink its bottle size to enable them to keep prices as-is (per NPR). (Gatorade bottles went from 32 to 28 oz in 2022.)

However, some key differences should help AriZona keep its signature 23-oz can. Think about the last time you saw an ad for AriZona Iced Tea. Probably never. Unlike Gatorade, AriZona spends next to nothing on advertising. "[T]he way I succeed is by doing things differently," AriZona CEO and co-founder Don Vultaggio told CNBC earlier this month. Now think about how you personally first tried the product — you probably heard about it from a devoted Arizona Iced Tea fan. That kind of publicity, which can't be bought even in today's influencer economy, Vultaggio says is "a lot better to [him] than a Superbowl ad." Which, for reference, would run about $6.5 mil.

Or maybe you were enticed by that 99-cent price. That's part of why CEO Vultaggio has made the pledge that "we're going to hold our price." The price is an integral part of the company's business plan, which is to sell a higher volume of items at a lower price. Lower prices, after all, are easier to grab on a whim. The family-owned company says it has no plans at this time to raise the price, now or going forward. The canned tea has been 99 cents for 30 years and it looks like it's going to stay that way.