When Don Vultaggio was considering names for his new iced tea business three decades ago, he wanted something that evoked a “warm, wholesome environment.”
That meant moving away from Brooklyn, where Vultaggio grew up. But no too away: His friends called his New York home the home of Santa Fe, because of its adobe-style design, filled with pinks, yellows and turquoise colors. So he chose “Santa Fe” for the name of the drink.
It didn’t stick.
“When I put Santa Fe on the wrapper, it didn’t look good,” Vultaggio told CNN Business. “I thought it looked like a train.”
Thinking of places near Santa Fe that would look better on a can, Vultaggio settled in Arizona, where he had never been. In fact, Vultaggio hadn’t even traveled west of the Mississippi.
“I always associated Arizona with a healthy, clean, dry feel that was different from the Brooklyn feel,” he said. “Having a name associated with a way of life, which is an environment and climate that made you want to have a refreshing iced tea. That’s why the name made sense to me.
AriZona Beverages, which makes the famous 99 cent iced teas, originated in New York in the early 1990s. Vultaggio, the company’s co-founder, said he was inspired by Snapple, which was founded in 1972 and became a cultural phenomenon. “Snapple Lady” commercials made the juice and iced tea company a huge hit, as sales skyrocketed throughout the 90s.
Having had its own success with a malt liquor business, Vultaggio and its partners turned to selling iced tea in 23-ounce cans the same size as their malt liquor. This helped AriZona stand out from Snapple’s 16-ounce can.
They also wanted to keep the same price. And give the logo a stylized capital Z that he says looks best on his cans.
The vibrant can, with its eye-catching checkerboard patterns and colors, was inspired by her Santa Fe home, due to the “continuous feedback and praise we were getting from everyone” for her home design.
AriZona’s design is a “great point of differentiation from its competitors,” according to Andres Nicholls, global executive creative director at design and consultancy firm Prophet. “It’s a great tool and place to express their personality and quickly tell the market ‘we’re not like everyone else.'”
Nicholls said the brand “was pretty fearless and consistent in its approach and created a very distinctive design.”
AriZona Iced Tea debuted in 1992 and became an instant hit. Its product line has grown beyond tea and now includes hundreds of products including snacks, candy, coffee and alcohol. One of his most popular drinks is the Arnold Palmer, a half-tea, half-lemonade drink based on the golfer’s drink of choice.
But just as eye-catching as the design is the 99-cent price tag for its big boy iced teas, is its cost, which should be adjusted to over $2 according to the US Bureau of Labor Statistics’ price calculator. But this The 1992 price remains unchanged.
“Our customers don’t need another price increase,” he told CNN International anchor Richard Quest in June. “We maintain this price to give customers a reason to buy from us.”
Manufacturing costs have risen everywhere, but Vultaggio credits “behind the scenes” actions that are keeping tea profit margins strong. “We were able to do that by making the can lighter, getting the cans through the line faster, having more facilities in America so we could get closer to the market,” he said.
The eye-catching design also helps maintain its market dominance, as AriZona doesn’t advertise as much as competitors like Snapple. On the contrary, the brand relies on its creativity to attract the attention of customers.
“We use value packaging and story and then great product inside,” Vultaggio said. “The first time someone buys from us is because of the package. And forever they buy it because it tastes good.