AriZona Iced Tea is a ubiquitous product in the U.S., but you didn’t learn about it because of a flashy ad campaign.
“We have never had a billboard,” proclaimed AriZona Beverage Company’s CEO Abid Rizvi. “I will say this with almost 100% confidence: you will never see an AriZona billboard in Times Square.”
Instead, the way AriZona has marketed itself is by simply having a presence at the store. AriZona judges its products on three dimensions: does a product look good? Does it taste good? And is it priced fair? According to Rizvi, it’s those three guiding principals that have led to AriZona’s success.
Rizvi joined this week’s Modern Retail Podcast and spoke about the brand’s history and its plans for the future.
AriZona first launched in 1992 as a side hustle to co-founder Don Vultaggio’s distribution business. Vultaggio formulated some iced tea and, through his distribution contacts, was able to get shelf space in some stores. Things snowballed from there — with AriZona becoming one of the main competitors to players like Snapple. One revenue estimate puts the iced tea business alone at $2 billion in annual revenue.
But iced tea isn’t AriZona’s only product. The company has expanded into other areas like fruit snacks and, most recently, hard iced tea. It’s these ambitions — along with international expansions — that Rizvi, who became chief executive in 2016, oversees.
But even when launching new products or going into different categories, the thesis has remained the same. “What I can tell you is: globally, no matter where you go in the world, people like good-tasting beverages,” Rizvi said.
With that focus on product, AriZona has traditionally shied away from expensive marketing gimmicks. Instead, according to Rizvi, the company’s most important goal is making a product that tastes good and unique — as well as has a unique branding that catches people’s eyes in stores.
“People are not buying any particular brand because they saw a Super Bowl ad,” Rizvi said.
Here are a few highlights from the conversation, which have been lightly edited for clarity.
Why it’s so hard for beverage startups today
“Getting onto the shelf is harder than it’s ever been before. And, as a result, a lot of companies end up spending a lot of money before they even get to the shelf… Some of these companies may end up on the shelf. But because they have made all those investments and spent as much money as they have had, even if they get to the shelf, they usually are not priced at a price point where they can really be successful.”
AriZona’s global strategy for success
“I know that a lot of the larger companies rely extremely heavily on consumer panels and consumer insights. We listen to our consumers. And what I can tell you is: globally, no matter where you go in the world, people like good-tasting beverages. That’s just the way us humans [are]; we’ve evolved over a very long period of time, but we like good-tasting beverages. It doesn’t matter where you are. Those three pillars still apply here: If you make it look good, taste good and you price it fair, people will come to it.”
Why the brand doesn’t spend heavily on advertising
“We have never had a billboard. I will say this with almost 100% confidence: you will never see an AriZona billboard in Times Square. That’s just not who we are. Going back to our origins, Don has always believed that people make decisions when they get to the shelf. I don’t want to hurt anybody’s advertising, but our philosophy has always been that people are not buying any particular brand because they saw a Super Bowl ad. They’re buying it because it’s intriguing. You can have a Super Bowl ad and people may even go pick up your product. But if doesn’t taste good, if it’s not competitively priced, they’re not going to keep coming back and buying it over and over again.”