AriZona Iced Tea works to maintain $0.99 price of canned drinks

Yahoo Finance reporter Brooke DiPalma details AriZona Iced Tea's attempts to keep its $0.99 price for its canned drinks amid inflation.

Video Transcript

DAVE BRIGGS: The Arizona beverage company made a promise to keep its 99 cent cans, but to do so, it had to increase prices on another part of its portfolio at the start of the year. Brooke DiPalma here with the details. Brooke, nice to see you. What are we finding out?

BROOKE DIPALMA: So this 20-ounce plastic bottle, something that customers go to at convenience stores, is essentially going up by 25% to-- from $1 to $1.25. Now that's only being implemented in the northeast market right now. As far as if that will expand into other markets, co-founder Don, who we've had on the show before, said that this is the largest market for that particular 20-ounce bottle. And so he's not quite sure of the timing and it's sound very unclear if this change will expand.

But as you can see there, this raise was, in part, to offset the cost of that 99 cent, to keep that there. But in addition to that, the price of plastic also has gone up. And so he said it ran out of options from speeding up lines and changing bottles. And so this was a decision, the very tough decision that they had to make.

SEANA SMITH: And Brooke, you spoke with Arizona's CEO earlier. What did he have to say just about the commitment that they have to that 99 cent can?

BROOKE DIPALMA: Yeah, well, he sounds very committed, of course. This is a three-decade owned-- family-owned company that is. And so he said that they did, in fact, have to undergo what many people are calling shrinkflation. So he said that the reason behind the change and to take future pricing and packing, this is essentially what he had to say.

DON VULTAGGIO: I don't know what the future holds. We're going to do the best we can and continue to do the best we can to maintain the most aggressive pricing on all our packaging. And 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 going to hold that price.