So I bought HORCHATA instead!" Lopez tweeted this morning. "Went to buy a AriZona Iced Tea - they asked me for my documentation. Mexican comedian George Lopez is even tweeting about the drink, which now - by merely sharing a name with a state that has become so hated that people in other cities are protesting Arizona Diamondbacks baseball games - has a racist conotation. Since the bill was signed, AriZona Iced Tea has been referred to as " the drink of facists," and ridiculing the popular beverage has become so popular on Twitter that it's earned itself the distinction of "trending topic" on the site.
Since SB 1070 was signed by Governor Jan Brewer last week, AriZona Iced Tea has been the unfortunate victim of name discrimination at the hands of those who think AriZona Iced Tea is a product of Arizona and that the bill is racist and discriminatory. But family ownership can come with other pressures of its own.With Arizona's new immigration law, SB 1070, causing certain groups to call for a boycott of all things Arizona, AriZona Beverages - the company that makes AriZona Iced Tea - is probably kicking itself right now for choosing Arizona as the state for which they named their company.Įspecially since the company is based out of Long Island, New York, and has nothing to do with the state of Arizona. The bottom line: Public companies are under constant pressure to improve margins in a way that family-owned companies often aren't. But why would a billionaire need fatter margins? Like all billionaires, Vultaggio has certainly done extremely well in the markets in recent years, and more money wouldn't buy him more happiness - especially if it meant giving up the 99-cent price point that he's clung to for 30 years. Against that is inflation itself - especially in the prices of aluminum, for his cans corn syrup, for his drinks and diesel, for transporting his wares to wholesalers.īetween the lines: The result is much tighter margins, every year.The big picture: The main force holding AriZona inflation at bay is the sheer stubbornness of Vultaggio, and his attachment to the way in which the 99-cent can effectively markets itself. Vultaggio won the fight, and Ferolito ended up having to sell his stake back to the company for a mere $1 billion or so - significantly less than the big companies were offering. Why it matters: The stubborn refusal of the drink's manufacturer to raise prices has everything to do with the fact that it's controlled and owned by a single billionaire, Don Vultaggio, who has no fiduciary duty to maximize profits or shareholder value.įlashback: Vultaggio spent seven years fighting with his co-founder, John Ferolito, who wanted to be able to sell his stake in the company to a major multinational like Tata Global Beverages, Nestlé, or Coca-Cola.
And you can buy it for 99 cents in gas stations and corner stores across the country, the same price that it's been for 30 years. 23 ounces of AriZona iced tea is a lot of iced tea - it's 680 ml, or more than 90% of the liquid in a bottle of wine.
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