AriZona Beverage Co.
Issue Fall 11
What is it that makes AriZona Beverage Co., so successful? Is it the bold flavor and equally bold packaging that draws in the taste buds and stares of its customers? Maybe it’s the small, privately held, familial team running the operation that has AriZona leaving competition in the dust. Many may argue it’s the 99-cent price tag stamped on the front of many of its most popular items that have earned consumer dollars.
Decoding the formula AriZona has concocted on its way to success may propose some challenges, but it’s easy to discern that whatever the formula is, this company’s flavor profile stands alone and artificial flavors are not allowed – meaning no gimmicks.
“Our competitors spend tons of million of dollars on advertising,” the company says. “While that in itself isn’t bad, some of the tactics they have chosen have us scratching our heads. They may imply that all of their products are premium, when in reality only a few are.
“We spend our money making sure our products taste better. We don’t compromise on ingredients. We don’t cut corners on product quality. The end result? Well, we like to think our annual growth of 40 percent speaks for itself.”
It speaks volumes. This is a company that has stayed ready to capitalize on new trends while retaining the old-fashioned concept of good quality at an affordable price. Instead of hiring consultants to make up for the gap that often occurs between what consumers want and what executives give them, the company in many ways is its own market researcher. However, instead of bringing a select group to the company, the company likes to take its research to the streets. Taking peeks at consumer purchases in the stores, eyeing the brands people are drinking walking down the streets and even sifting through garbage to see if people are sipping every drop of AriZona beverages are all part of its man-on-the-street data collection.
Experts in the beverage world might say that you can’t conduct real market research this way, but according to AriZona, the company hears that often regarding nearly every company practice. “Experts told us, ‘You can’t sell iced tea in a can.’ They told us ‘You can’t put a flower on a bottle for tea,’” the company says.
“We didn’t listen. Instead we followed our instincts. So far, so good. Part of our success is owed to our risk-taking, entrepreneurial spirit.”
Just as it remains today, AriZona was founded on the ability to be nimble. In 1971, owners and founders Don Vultaggio and John Ferolito formed Ferolito, Vultaggio & Sons by distributing beer out of a Volkswagen bus. They maintained a profitable business in the 1980s but made a sharp turn away from the alcohol industry after a 1990 sales pitch. Vultaggio was talking with a retailer when his epiphany strolled by in the form of a Snapple bottle.
“A Snapple truck pulled up [and] out came case after case,” the company says. “So John and Don met with there board of advisors [each other] and decide to jump headfirst into the tea business. Their business plan was simple – create a high quality product in packaging that stands out.”
That business plan has led AriZona into producing products in 16 different categories such as its original tea in a variety of flavors and Arnold Palmer Half & Half, which is a mixture of tea and lemonade. For the health conscious, AriZona offers newer lines such as certified organic green tea offered in original, pomegranate and “yumberry” flavors. Some newer products include CocoZona coconut water made 100 percent from the island fruit, as well as the new line of AriZona waters, including Vapor Water with added electrolytes and Rescue Water, which is infused with vitamins, antioxidants and just a hint of flavor.
In 2009, it introduced AriZona Tea Water as another member of its water family. The company partnered with Nestle Waters North America Inc. to create low-calorie, tea-infused waters. The certified organic product combines the antioxidant qualities of green tea with the hydration of natural spring water, the company says. “We are not only excited about this breakthrough new organic product, but we are ecstatic to be partnering with the leading bottler of natural spring water, Nestle Waters North America,” Vultaggio stated.
This isn’t the only successful partnership AriZona has entered. The company has a longstanding relationship with legendary golfer Arnold Palmer, who is credited with bringing the tea-lemonade combination to the masses. Palmer graces the Half & Half packaging.
In October, Vultaggio announced the release of Arnold Palmer Hard, a malt beverage made from iced tea, lemonade and 5 percent alcohol. This is AriZona’s entry into the alcoholic beverage market, but Vultaggio is familiar with the industry from his days spent in distribution. Like many of its tea beverages, it will be packaged in Arizona’s iconic 24-ounce cans, which always contains a superior-quality beverage inside.