Cheaper than water for 25 years and counting
February 8, 2017 11:58 AM   Subscribe

A 23-ounce can of AriZona Iced Tea is $0.99. It says it right there on the can. That is, in most gas stations and corner stores where you find such a can, cheaper than water. It's been sitting at that price point since its introduction in 1992. How the hell can you sell iced tea for less than water?

Turns out it's a combination of a lack of advertising, more efficient production and distribution techniques, and thinner cans. (Also, there's a hell of a markup on water.)
posted by Etrigan (67 comments total) 21 users marked this as a favorite
 
Why would you assume an unchanging relationship between cost of raw materials and cost of finished product to start with? Do people actually think the price they pay for bottled water doesn't include a huge margin variable at the will of the seller?
posted by praemunire at 12:07 PM on February 8, 2017 [8 favorites]


One would assume that any drink other than water would cost more, because they are (ostensibly) value-added over water. Additionally, if Arizona can maintain this pricing structure and business structure, shouldn't they (or another company) be able to provide 23 oz of water for 79 cents?

It's almost less "how does Arizona cost only 99 cents?" and more, "how did people get conned into willingly paying over a dollar for a bottle of plain tap water?"
posted by explosion at 12:11 PM on February 8, 2017 [81 favorites]


Last year, I bought an Arizona lemon lime soda of some sort that was fantastically delicious and which I have never, ever seen anywhere again, despite deliberately looking in basically every beverage case I pass by. It is cruel to taunt me with delicious things and then withhold them. Cruel!

(Also, Arizona is never 99c up here in Canada, even if it says so on the bottle.)
posted by jacquilynne at 12:12 PM on February 8, 2017 [3 favorites]


A more obvious question would be, "how can you sell a bottle of water for more than a can of iced tea?"

On preview: late to the party again...
posted by klanawa at 12:13 PM on February 8, 2017 [2 favorites]


This reminds me of the Planet Money story on Coke: Why Coke Cost A Nickel For 70 Years. (Link is to the Morning Edition version, which is shorter but includes a transcript; the podcast version is longer but audio-only.)

The price of bottled water is more a reflection of what people are willing to pay for it than of its cost of production; flats of bottled water at Costco have a much lower unit price than individual bottles at gas stations.
posted by We had a deal, Kyle at 12:14 PM on February 8, 2017 [2 favorites]


And let's not even get into the airport, after going through security, and then needing water
posted by infini at 12:17 PM on February 8, 2017 [8 favorites]


"The price of bottled water is more a reflection of what people are willing to pay for it than of its cost of production; flats of bottled water at Costco have a much lower unit price than individual bottles at gas stations."

QFT.

A great example of this is the price of coke; I can buy (in Canada) a 12 pack (on sale) for 3.50$. But if I want a cold plastic bottle of coke, it will cost me 2.50$ (which is more than a warm 2 liter of the same product).
posted by el io at 12:19 PM on February 8, 2017 [5 favorites]


jacquilynne: I find Arizona all the time for 99c here in Toronto. Shoppers usually honours the price as do alot of the smaller convenience stores I visit.
posted by cirhosis at 12:26 PM on February 8, 2017 [2 favorites]


It's almost less "how does Arizona cost only 99 cents?" and more, "how did people get conned into willingly paying over a dollar for a bottle of plain tap water?"

Answer: people buying water to drink on the go are actively avoiding drinking something sugary, and thus get hit with a premium because soda has become the default beverage option. I can go to the supermarket and get a case of 24 16.9-ounce water bottles for less than I'd pay to grab three out of a 7-11 cooler, because the context is so different.
posted by Holy Zarquon's Singing Fish at 12:26 PM on February 8, 2017 [13 favorites]


flats of bottled water at Costco have a much lower unit price than individual bottles at gas stations.
Individual half-liter bottles of house-brand water at Costco are 25 cents from a machine near the entrance.

Due to the questionable quality and taste of the local-well water that comes through to pipes in my apartment, I mostly drink Crystal Geyser brand (the lowest price for halfway-local-sourced spring-sourced water), which I buy by the gallon (often on sale under $1US) and pour into multiple-reused small bottles (my most recent were 700ml 'sport-tops' at 3/$1). I take almost as much pride in those purchases as the shame I take in only buying 12-packs of Big Name Caffeine-and-Corn-Syrup Soda Pop when they're under $3 for a quantity of 4.
posted by oneswellfoop at 12:38 PM on February 8, 2017


It's almost less "how does Arizona cost only 99 cents?" and more, "how did people get conned into willingly paying over a dollar for a bottle of plain tap water?"

I filter at home but honestly tap water in most places tastes like garbage, especially when it's warm. I'll happily pay for filtered bottled water if I forget to bring my stainless steel bottle with me or run out of water while I'm out.
posted by mikesch at 12:39 PM on February 8, 2017 [7 favorites]


Relevant bit from the show Atlanta: the price is on the can though...
posted by sibboleth at 12:40 PM on February 8, 2017 [10 favorites]


What's the difference between "price point" and "price"?

always wondered
posted by sidereal at 12:41 PM on February 8, 2017 [5 favorites]


Here is another lesson in the under-appreciated maxim "The only relationship between cost and price is price needs to be higher to stay in business."
posted by Big Al 8000 at 12:45 PM on February 8, 2017 [8 favorites]


What's the difference between "price point" and "price"?

Price point indicates that there is a more than a purely rational Homo economicus reason for something to have a particular cost to the consumer -- in this case, 99 cents is (believed to be) different enough from $1 that they believe they will sell sufficiently more units to make up for the penny they are "losing".
posted by Etrigan at 12:47 PM on February 8, 2017 [2 favorites]


What's the difference between "price point" and "price"?

My guess is that "price point" is marketing speak for the price at which a certain buying behavior is stimulated. Because marketing people think and talk that way.
posted by Flexagon at 12:49 PM on February 8, 2017 [1 favorite]


Can I have moment to realize Arizona Iced Tea was introduced my freshman year in high school and holy shit, I feel old.
posted by Kitteh at 12:50 PM on February 8, 2017 [8 favorites]


flats of bottled water at Costco have a much lower unit price than individual bottles at gas stations.

Every year we go on an extended camping trip to a place in PA where the drinking water is safe, but disgusting. (It turns orange if you let it sit in the sun for a short period of time and seems to have an absurdly high iron content. Also, fracking nearby.) So, we buy a lot of water while we're there.

In general we'll buy one case of single serve bottles, and then a bunch of 1 or 2.5 gallons containers.

This summer, we were in a big box store buying the water and some other stuff, and my son, age 10, was bugging me to buy him a bottle of cold water for the ride back to camp.

I had him look at the price on the single bottle of cold water he wanted, and then at the price shown on the display for the 24 pack of single serves, and compare them. They were exactly the same.

This was an eye opening exercise for him, to say the least.

All of which is to say that I've been known to buy a single serving beverage from a cooler from time to time, but I'm always very clear with myself that the price I'm paying is for the convenience, not the product itself.
posted by anastasiav at 12:54 PM on February 8, 2017 [4 favorites]


The cheapest liquid at a gas station isn't found in the mini-mart, and iced tea still costs more than premium.
posted by ryanrs at 12:59 PM on February 8, 2017 [21 favorites]


Is the price why it is so popular? I've never tasted it.
posted by kozad at 1:00 PM on February 8, 2017 [1 favorite]


And let's not even get into the airport, after going through security, and then needing water

But if you're smart, you'll bring a bottled water and drink it while your waiting, and then you can take the empty bottle through security and fill it from the fountain. Even I--a picky person who has the best water in the whole world from my own well--can stand to drink most fountain water. Especially if it tastes like screwing the airport water sellers out of their $6 profit!
posted by BlueHorse at 1:01 PM on February 8, 2017 [15 favorites]


Is the price why it is so popular? I've never tasted it.

It must be, because it sure isn't the taste.
posted by howling fantods at 1:14 PM on February 8, 2017 [1 favorite]


Same reason the 2L bottles of Coke are often sold at $1.29 or 99 cents, but the 500mL bottles are $2.49 or $2.79. You're paying as much as the market allows.

And I've never paid over 99 cents for Arizona here in Nova Scotia, so wherever Jacquilyne is buying it is overcharging.
posted by GhostintheMachine at 1:19 PM on February 8, 2017


I always assumed AriZona Iced Tea was drug paraphernalia, like those little roses in the glass tubes
posted by prize bull octorok at 1:22 PM on February 8, 2017 [27 favorites]


All this is relevant to my casual interest in beverage economics, but I'm really just here to say that no matter what it says on the side of the can/jug, Arizona's Green Tea is not good when heated up. It's kind of refreshing but not super-good when cold, for that matter, but warm, it's bad.
posted by Caxton1476 at 1:30 PM on February 8, 2017


According to Google a can of Arizona has 22 grams of sugar. So for 99 cents I can drink almost an ounce of sugar? No thanks.
posted by Splunge at 1:33 PM on February 8, 2017


How the hell can you sell iced tea for less than water?

Volume.
posted by BWA at 1:36 PM on February 8, 2017 [7 favorites]


Yeah, but when you're stuck in the park for an afternoon, and that New Amsterdam gin is on sale at the liquor store, you're gonna be thankful for that 99c grape-aid.
posted by lkc at 1:45 PM on February 8, 2017 [7 favorites]


Pfft. I pay $1.80 per cubic metre for my water. That's less than 0.2 cents per litre. (And a little more than the same again for the sewer system.)

Also, it looks like a single can of AriZona tea will get you almost 90% of your maximum World-Health-Organization recommended daily intake of sugar.
posted by heatherlogan at 2:00 PM on February 8, 2017 [1 favorite]


...[T]he 2L bottles of Coke are often sold at $1.29 or 99 cents, but the 500mL bottles are $2.49 or $2.79
But with the smaller bottles, you're also paying for the fact that they're cold. Refrigeration isn't free. Especially with a door that's always being opened, or worse, an open display.
posted by Hatashran at 2:22 PM on February 8, 2017 [3 favorites]


lkc, hey now! I like New Amsterdam gin!
posted by 4th number at 2:23 PM on February 8, 2017 [3 favorites]


The taste of tea from a metal can makes me gag every time. They'd have to pay me.

Yet, I prefer the taste of Mountain Dew from a can. I'm a woman of paradox.
posted by greermahoney at 2:30 PM on February 8, 2017 [1 favorite]


I always assumed AriZona Iced Tea was drug paraphernalia, like those little roses in the glass tubes

Wow. I never made that connection before.
posted by Ogre Lawless at 2:35 PM on February 8, 2017 [2 favorites]


Perhaps you pay more for water because it is healthier? Drinks in cans not as classy as drinks in glass containers, according to Paul Fussell, who says the more basic, older, more natural product always outclasses the later thing. Try, for example, Pellegrino in glass bottle and compare to the same drink in (cheaper usually) plastic bottle.
posted by Postroad at 2:50 PM on February 8, 2017


I think it bears mentioning that AriZona iced tea also inspired possibly one of Das Racist's stupidest songs.
posted by valrus at 3:19 PM on February 8, 2017 [3 favorites]


Do [lots and lots of] people actually think the price they pay for bottled water doesn't include a huge margin variable at the will of the seller?

Yes. Labor theory of value gets translated into labor theory of price.
posted by PMdixon at 3:28 PM on February 8, 2017


Flavored water can get away with rudimentary filtration. So I'd expect mediocre water quality + cheap flavoring/sugar to be cheaper than sophisticated filtration for water worth drinking out of the bottle.

*I was on vacation and the hotel only had Aquafina. I don't know what the mineral content is, but I can't stand it.
posted by politikitty at 3:50 PM on February 8, 2017


The cheapest liquid at a gas station isn't found in the mini-mart, and iced tea still costs more than premium.

yeah but i refuse to drink from the engine water station
posted by Existential Dread at 4:00 PM on February 8, 2017 [8 favorites]


Can I have moment to realize Arizona Iced Tea was introduced my freshman year in high school and holy shit, I feel old.


That was my freshman year of university, and get off my lawn.
posted by TheWhiteSkull at 5:38 PM on February 8, 2017


I love their Mucho Mango.
posted by jonmc at 5:52 PM on February 8, 2017 [1 favorite]


politikitty: "Flavored water can get away with rudimentary filtration. So I'd expect mediocre water quality + cheap flavoring/sugar to be cheaper than sophisticated filtration for water worth drinking out of the bottle."

Maybe for off brand sodas but the water chemistry for a Coke or Pepsi product is strictly controlled. And water is far and away the most profitable thing in the beverage cooler. When I was working vending we easy made 10-15 cents more on a 500ml bottle of water (that was just filtered local city water (which is perfectly fine to drink)) than on any of the sodas of the same size and retail price (and water was our #1 seller).
posted by Mitheral at 5:59 PM on February 8, 2017 [2 favorites]


Tap water in Seattle is the best I've ever had. I grew up in aforementioned Pennsylvania, which was uniformly unpleasant. Every time I travel somewhere dry I spend two days re-hydrating. I will now search out Arizona iced tea when in southern California or phoenix.
posted by WacoKid at 6:37 PM on February 8, 2017 [1 favorite]


I buy water in bulk at 1 cent an ounce. So it costs 23 cents if I bought a Arizona sized amount. That's retail cost. I imagine wholesale water is a tad cheaper.
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 6:51 PM on February 8, 2017


inspired possibly one of Das Racist's stupidest songs

Oh come now that's not even close.

And a can of Arizona when all you've got in your pocket is a Sacagawea is a profound blessing.
posted by 1adam12 at 6:53 PM on February 8, 2017


The Arizona low-carb energy drink is awesome. It tastes better, to me, than Red Bull, or just about any other energy drink. Used to be I could find them anywhere and everywhere in NYC, but that has gotten harder the last few years. And the places that carry the energy drink seem to have only the gross-tasting one in the yellow can or the atrocious "fruit punch" flavored ones.
posted by old_growler at 7:44 PM on February 8, 2017


Funny that the hats go for 15 bucks, though:
posted by old_growler at 7:46 PM on February 8, 2017



I always assumed AriZona Iced Tea was drug paraphernalia, like those little roses in the glass tubes


Ahh yes love roses. Ive also seen the same glass stems with a couple tiny incense sticks in them ... same idea. Arizona cans are too big for Anything like that tho.. just value priced sugar water.
posted by some loser at 8:06 PM on February 8, 2017


I always assumed AriZona Iced Tea was drug paraphernalia, like those little roses in the glass tubes

How do you smoke crack from an arizona can?
posted by ryanrs at 8:22 PM on February 8, 2017 [1 favorite]


wow, that's like straight out of yahoo answers
posted by ryanrs at 8:22 PM on February 8, 2017 [7 favorites]


Arizona cans are too big for Anything like that tho..

Not really, you can make a fine impromptu weed pipe from any aluminum can.
posted by spitbull at 10:11 PM on February 8, 2017


But you can't make anyone love you with a tiny glass pipe with a rose in it.
posted by The Noble Goofy Elk at 11:17 PM on February 8, 2017 [3 favorites]


It's not just iced tea. A few times a year Coke products are $0.99 for a two liter bottle... and the price in 1975 for the two quart bottles were $0.99.
posted by Marky at 11:22 PM on February 8, 2017


Can I have moment to realize Arizona Iced Tea was introduced my freshman year in high school and holy shit, I feel old.

Oh, cry me a river you little whiner. I'm old enough to be your mother.
posted by she's not there at 12:54 AM on February 9, 2017 [4 favorites]


One Dollar Can, by Das Racist
posted by shotintoeternity at 1:29 AM on February 9, 2017


But does it contain electrolytes?
posted by acb at 2:03 AM on February 9, 2017 [1 favorite]


Walgreens has the diet peach iced tea in those glorious oil cans, and it is magnificent.
posted by Slap*Happy at 5:07 AM on February 9, 2017


Oh, cry me a river you little whiner. I'm old enough to be your mother.

Mom? Is that you?
posted by Kitteh at 5:37 AM on February 9, 2017


Yes, Babe, I'm always here for you.

(Would it kill you to pick up the phone and call while I still know who you are?)
posted by she's not there at 8:42 AM on February 9, 2017


Does anyone else have a dollar store in their town selling 3 liter bottles of generic cola for 99 cents?
posted by Glibpaxman at 9:48 AM on February 9, 2017


And let's not even get into the airport, after going through security, and then needing water

Specially formulated, impossible to make a bomb out of... that's why airport water is expensive
posted by kurumi at 10:22 AM on February 9, 2017 [1 favorite]


I have always had the opposite question. How can you pull half a liter out of the ground in Fiji, ship it 7200 miles to Chicago, bottle it in a fancy plastic bottle, pass it through some number of layers of wholesalers and get it to my local gas station cold, and sell it to me for $1.79 and still have everybody involved make enough profit to keep doing it?
posted by rtimmel at 10:33 AM on February 9, 2017


The Aristocrats!
posted by one weird trick at 2:06 PM on February 9, 2017 [2 favorites]


> Tap water in Seattle is the best I've ever had

Ew. It smells like bleach.
posted by The corpse in the library at 5:04 PM on February 9, 2017 [1 favorite]


Does anyone else have a dollar store in their town selling 3 liter bottles of generic cola for 99 cents?

Whoa. Whoa whoa whoa. Whoa whoa whoa whoa.

3 liter bottles?
posted by PMdixon at 8:38 PM on February 9, 2017


yeah they're like 2 liter bottles except they hold 3
posted by ryanrs at 8:49 PM on February 9, 2017 [3 favorites]


For those of us who can't get away from the fizzy stuff, but bemoan the packaging waste of small bottles or cans, buy some of these. With a steady hand you can decant a 2L bottle into these, cap it off, and it stays fizzy longer than it will in the big bottle once opened and partially consumed.

Also good for stretching out or sharing a growler of beer over time.

Be sure to refrigerate though.
posted by one weird trick at 1:08 AM on February 11, 2017


yeah they're like 2 liter bottles except they hold 3

Sheer madness.
posted by PMdixon at 8:17 AM on February 11, 2017


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