- [Narrator] 159 million Americans
drink it every single day,
more than three billion gallons a year.
- Over the last 30 years, the iced tea market
has exploded over 500%.
- [Narrator] But not that long ago,
iced tea was a niche homemade drink
mostly found in the South.
- Even as recent as the 1970s,
there were no ready-to-drink iced teas
out there on the market.
- [Narrator] The fight to turn the little-known refreshment
into a national obsession will pit a century-old tea giant.
- [Marketer] This is it, our new flagship
ready-to-drink iced tea.
- Lipton is massive,
arguably the largest tea manufacturer in the world.
- [Narrator] Against two upstarts.
- Iced tea doesn't sell.
- Because no one makes a decent one.
We do.
- [Narrator] With no national distribution
and a fraction of the resources.
- If there's room for two, there's room for three.
- This is a company with a hundred-year lineage,
and they're getting absolutely stomped
by these industrious guys.
- [Narrator] Their three-way battle
will birth iced tea innovations
that upend the beverage aisle.
- These cans literally tower over the competition.
- There's no proof that anybody's gonna buy
a peach iced tea.
- It's good. - It's great, and you know it.
- [Narrator] And their unorthodox strategies.
- Mr. Stern, big fan. Welcome to Snapple.
- It was naughty and dangerous,
right there on your FM dial.
- [Narrator] Will help turn iced tea
into a daily ritual for more than half the country.
- AriZona Iced Tea is a promise.
99 cents? I got a buck in my pocket.
- [Narrator] And a $57 billion industry across the globe.
- I brew it, I buy it, I love iced tea.
- "Made from the best stuff on earth."
[rousing music]
- [Narrator] It's 1904, and nearly 20 million Americans
flock to St. Louis, Missouri to attend the World's Fair.
There, a British merchant named Richard Blechynden
faces a problem.
No one wants his product, hot tea.
- It's an unusually hot April,
and so, in an act of desperation,
he takes gallons of his hot tea,
then he pours it over buckets of ice,
and he sells it as iced tea.
- [Narrator] For many Americans,
it's the first time they've ever tasted cold tea.
But despite its debut,
iced tea fails to catch on nationwide.
- The problem is, it's a painstaking process,
very time-consuming.
- You still had to brew tea,
and then you had to naturally come down in temperature,
and then you had to pour it over ice.
Sometimes you'd leave it in overnight.
- So, it was a drink you almost had to plan today
to drink tomorrow.
- [Narrator] By the mid 20th century,
only Southerners seem to embrace the effort.
- And it's really not that complicated of a reason why.
Very hot in the South.
It kind of embraces this idea of Southern hospitality,
because if you brought out a pitcher
of iced tea with ice cubes, it was kind of a flex,
kind of a sign that you can entertain people really well.
- [Narrator] Outside the South,
Americans are far more likely to drink tea hot,
if they drink tea at all.
- We think back to the American Revolution
and one of their precursors is the Boston Tea Party.
Americans don't like tea.
Americans are more apt to consume coffee rather than tea,
and it suggested that in this period, Americans consume
about 40% of the coffee that's produced globally.
So, those interested in marketing tea
or selling tea in the United States have an uphill battle.
- [Narrator] It's a persistent problem
for the country's largest tea company, Lipton.
- Lipton was founded by a British food importer
named Sir Thomas Lipton in the late 1800s.
- In 1910, they start printing
the instructions to make the tea
right on the tea bag itself, allowing them to become
the fastest growing brand of tea in America.
- [Narrator] By the early 70s, Lipton is struggling
against an increasingly crowded beverage landscape.
- Teas remain relatively unpopular in the United States
in the 1970s, and sales lag behind
nearly every other beverage on the market,
including beer, soda, juice, and milk.
- [Narrator] Now it's up to Lipton's new CEO
to revive the company's stagnant tea sales.
- New product developments. Where are we?
- Hubert Tibbetts is a World War II veteran
and a Harvard graduate, incredibly bright.
- Well, we are working on some new varieties
of instant soups.
- Anything tea related?
We are a tea company after all, aren't we?
- Now, as the president,
the main thing that Tibbetts is focusing on is innovation.
[suspenseful music]
- [Narrator] One of Lipton's more recent innovations
is a powdered mix that makes iced tea in seconds.
- Lipton Iced Tea powder was made of dehydrated tea,
lemon, sugar, and a little bit of coloring,
and a little bit of flavoring,
and the way you made it was just to add
a little bit of water to it
and stir it until it's all dissolved.
- The folks at Lipton were looking for a way to kind of
capitalize on Americans' love of cold beverages.
- But it's kinda like Kool-Aid.
Kool-Aid is a nice substitute for juice,
especially in a pinch, but it's not quite the same quality.
- [Narrator] 10 years since its release,
the mix has failed to catch on in any significant way.
- I see no one's touching our instant iced tea mix.
Neither are consumers.
Why is that?
- Convenience.
It's easier to grab a can of soda, especially on the go.
Powdered iced tea is something you can only drink at home.
- [Narrator] By 1972, the average American
drinks over 30 gallons of soda per year,
compared to just seven gallons of tea.
- Look, in the early 70s,
getting a Coca-Cola, for example,
very easy, very affordable.
- What are you suggesting, we bottle iced tea in a can?
- I mean, why not?
[suspenseful music]
- It seems so obvious today,
but back then, no one really thought
to put iced tea in a can.
- Imagine cans of Lipton Iced Tea on the shelf,
right next to the sodas.
- He thinks pre-made,
ready-to-drink iced tea beverages
could certainly increase Americans' consumption of tea.
- All right, but keep it simple.
I don't wanna waste a lot of money on R&D.
Moving on.
What's next on the agenda?
- [Narrator] Tibbetts fast-tracks the canned iced tea,
but he puts no development into the tea itself.
- [Adam] He says, you already have a powdered tea mix, right?
Well, why don't we just reconstitute it with water
and throw it in a can?
- That's not great.
Tastes like metal.
- [Marketer] It has to do with the can.
We haven't been able to solve for it.
- [Will] Aluminum cans are easier and cheaper to produce,
and they are far cheaper to distribute.
But a drink like iced tea, which is highly acidic,
just will be affected by the flavor of this aluminum,
kind of a weird chemical aftertaste.
- We could bottle it in a glass.
- Too expensive.
- Despite the metallic aftertaste,
Tibbetts decides to plow forward with the canned iced tea.
He has shareholders to answer to,
and quite honestly, he doesn't wanna spend the time
or the money to improve the technology.
[suspenseful music]
- In arguably one of the most
American solutions to this problem,
Lipton decides that they're going to mask
this unpleasant taste by adding loads of sugar,
[suspenseful music]
like a whole cane field's worth of sugar
to the existing tea mix.
- Now that's not bad.
[suspenseful music]
- [Narrator] In 1972, the world's first
ready-to-drink iced tea hit shelves nationwide.
The cost of a six pack
works out to just over 10 cents a can,
a bargain next to Coca-Cola.
- A 12-ounce can of soda at this time was 25 cents.
That's what Lipton canned iced tea is competing with.
- But the reaction is a little lukewarm.
- It was that equal measure, super sweet and super bitter,
with a slight hint of metal.
- Lipton's iced tea in a can,
it doesn't set the world on fire,
it's not gonna compete with Coke or Pepsi
- [Narrator] With little demand for canned iced tea,
other beverage companies don't even bother to compete.
- The majority of Americans
don't even know what they're missing,
because they've never tasted real brewed iced tea
in the first place.
[rousing music]
- [Narrator] Meanwhile, in New York,
three friends try to grow a business
selling fresh bottled juice.
- So that's 10 cases of each.
Yeah. We can have those delivered by Monday.
- Back in the 1970s, Arnie Greenberg
was the owner of a Jewish deli in New York City,
and the area around the deli became the domain of hippies
who were much more into health foods.
So he convinced his childhood friends,
Lenny Marsh and Hyman Golden, to join him in a new venture.
- [Jason] The three pooled together $30,000,
which was enough money
to turn Arnie's Deli into this health food store,
"Unadulterated Foods."
- [Narrator] Bottled juices quickly became
their top selling products.
- So even though they didn't know anything
about making juice, the trio decided,
we're gonna just bottle our own juice.
- No problem.
Yeah, will do. Okay.
- [Narrator] But after 10 years,
expanding beyond local health food stores
has proven difficult.
- [Bill] In the early 80s, sales plateau, and they are desperate
to break into the suburbs and wider markets.
They just don't know how.
They can't lower prices
because fruit is a really expensive main ingredient.
[suspenseful music]
[rousing music]
- We're surrounded by all natural fresh juice
and you're drinking that?
- Felt like an iced tea.
- There's gotta be something better out there.
- Not like this.
I don't gotta brew it, I don't have to mix it.
- You're telling me no one else bottles iced tea?
- No.
- [Adam] And the light bulb goes off.
- Why don't we try?
- This weird tea in a can from Lipton
was the only game in town.
He figures, we're making juice.
I bet we can make a better tea.
- And he wants to sell iced tea.
- And why not?
[rousing music]
- [Narrator] This idea will grow into the number one
ready-to-drink iced tea in America,
recognizable for its quirky commercials,
and fun facts under its caps.
It will become a billion-dollar brand,
selling nearly a hundred million gallons of iced tea a year.
But to get there, it will have to take on
the biggest name in tea,
a daunting challenge for a brand no one has ever heard of.
[rousing music]
- [Narrator] In the early 80s, a trio of friends
run a small juice brand with a unique name.
- Early on, they made a carbonated apple juice.
- So they thought about calling their product
Snappy Apple Juice, but they feel that's too long.
So they smash it together into the now iconic Snapple.
- [Narrator] Now they're looking to add
iced tea to their lineup.
Their first step is to use real tea leaves,
not a powdered mix.
- The founders of Snapple want to take
their all natural ethos that have really worked for juice
and apply it to tea, but that's not actually easy to do.
Making iced tea is totally different than making juice.
- Tastes kind of bland.
[rousing music]
- Looks kind of bland.
- They make a tea,
but I mean, it almost looks like a urine sample.
- We could try brewing it longer,
maybe raising the brewing temp.
Worth a try.
- They're not chefs,
they don't really know how to develop a recipe,
but they want something that's gonna give them
deeper flavor and color
without using the additives that Lipton does.
- [Narrator] For months,
they test different tea strains and blends.
- So they source their tea leaves from India
and invent a formula of black tea and green tea.
They heat it longer, they heat it hotter,
and they're noticing it's releasing more flavor.
- [Narrator] The formula remains a closely guarded secret
even to this day.
- The last step is to bottle the tea hot
using glass bottles instead of a metal can,
which of course is more expensive,
but that does two things.
It preserves the flavor of lemon, and it also prevents
having the metal leach into their products, like Lipton.
[rousing music]
- That's pretty darn delicious.
- What they end up with is a rich, more amber colored tea,
and the lemon provides a bit of a nice bite.
- [Narrator] Now comes an even harder task,
convincing customers to buy it.
- Iced tea doesn't sell.
- Because no one makes a decent one.
We do.
- Retailers are like, we can barely sell Lipton,
and when people think of iced tea, they think of Lipton.
Why are we gonna start stocking "Snapple,"
a name no one's even heard of?
- Just try it.
[suspenseful music]
- It's good. - It's great,
and you know it.
- I can't be giving free samples
to everybody that walks through the door.
- You don't have to. - Listen,
I don't have any room on the shelves anyway, so it's a no.
- I'll double your cut.
Whatever percentage Lipton's giving you, I'll double it.
- The Snapple team do something
that is unprecedented at this point
in the entire landscape of food and drink in America.
[suspenseful music]
- You got a deal.
- They offer distributors one third of all the profits.
That's twice the industry average at this time.
- But this deal is risky
because if their product doesn't sell,
then they're absolutely screwed.
But if their product does sell,
they need it to sell a lot to even break even.
The model they were going with
is really only profitable at scale.
- [Narrator] In the summer of 1987,
Snapple Lemon Iced Tea launches across New York City.
- And right on the label, they print proudly on it, "natural,"
as an idea that this is something more elevated
than what you can get elsewhere,
something that's gonna be good for you.
- [Bobby] Snapple isn't just a can of soda, right?
it's a premium product.
You're talking about a heavy, quality glass bottle.
You pop open that cap, you hear that snap.
It's all a part of the experience.
- [Narrator] At $1 for a 16-ounce bottle,
the Snapple experience is quadruple the cost
of Lipton Iced Tea.
- [Jason] But their strategy works.
Their enticement to distributors
gets people to push the iced tea,
and when they try it, of course, it's delicious.
- [Narrator] As word spreads,
sales soar to $5 million in the first year.
The iced tea outsells every flavor of their juice,
while costing far less to make.
- If you thread the needle of offering a low margin product
long enough for it to be
commercially successful and viable,
the distributors are happy, the stores are happy,
but most importantly, the three Snapple guys are very happy.
[suspenseful music]
- [Narrator] By 1990, Snapple's growth
has not gone unnoticed at Lipton.
- What you're looking at
is the newest ready-to-drink iced tea on the market.
- [Narrator] After Hubert Tibbetts' retirement
two years earlier, Blaine Hess is now CEO.
- Hess started in sales at Lipton in 1959.
He worked his way up under Hubert Tibbetts,
and he is just as dogged as his predecessor.
- Go ahead, try it.
[suspenseful music]
Pretty good, isn't it?
Why aren't we selling that?
- [Narrator] Although Snapple is still relatively small,
Hess is determined to keep it that way.
- Blaine Hess wants to make sure
that people know that if you want real tea,
go to the company
whose tea you've been drinking for generations.
Lipton is the first name in American tea, not Snapple.
- They're looking at Snapple and they're like,
we're coming for you, man, we're coming.
[suspenseful music]
[rousing music]
- [Narrator] In 1990, Lipton's CEO, Blaine Hess
takes steps to directly challenge Snapple
- Starting tomorrow,
I want R&D working on a brand new formula
designed specifically to be sold in a glass bottle.
I don't care how much it costs.
- [Narrator] But Snapple's creators
are also working on something new.
- The Snapple crew knows New Yorkers
really love their iced tea.
But if Lipton gets national
with the new product before they do,
they can just kiss this national expansion goodbye.
- How do you grow a product line with one product?
- That's good. - It's great.
- You add extra flavors.
[rousing music]
- Who else but a company that started making juice
would think to have fruit flavored iced teas?
Up until this point, people saw iced tea as just tea.
- Nowadays, it's kind of hard to separate
fruit and iced tea, 'cause you have peach tea, guava tea,
strawberry tea, all sorts.
But then, it absolutely was not a thing.
- The Snapple guys are really making a bold move.
There is no proof
that anybody's gonna buy or try a peach iced tea
- [Narrator] In 1990, Snapple expands across the country
with their entirely new flavored iced teas.
By the end of the year,
Snapple sells nearly 150 million bottles,
a fourfold increase, notching an achievement
unthinkable just a few years earlier.
- Snapple becomes the number one
ready-to-drink iced tea on the market,
replacing Lipton, a company with over a 100 year lineage.
[suspenseful music]
- Lipton, one of the most iconic names in American tea,
they're furious.
How can they have lost their number one spot to Snapple?
- This is it,
our new flagship ready-to-drink iced tea.
- They've come up with a brand new formulation
of Lipton Iced Tea, which is higher end,
which they have spent a lot of resources in to reformulate.
- [Narrator] They call it Lipton Original.
It not only copies Snapple's glass bottles,
it's also brewed with real tea leaves.
[suspenseful music]
- It's good.
What's this?
- [Narrator] But it's a different innovation
that may give Lipton the edge.
- Something else we wanted to show you.
- By the early 90s, there were some advancement
in aluminum can technology
where they actually put an epoxy resin
inside the lining of the can,
so even a highly acidic drink, like an iced tea,
was not affected by the aluminum packaging.
[suspenseful music]
- [Narrator] Hess sees an opportunity
to give canned iced tea a second chance.
- We thought we could market it at a lower price point
under a new brand name.
- They add this shocking yellow sort of banner
and they call it Lipton Brisk.
- I like it.
- [Jason] The funny thing is, it's still the same
powdered iced tea they'd been making.
But I remember Lipton Brisk
and I absolutely thought it was brand-new.
It felt very hip and cool.
So talk about a successful rebrand.
- [Narrator] In 1991, Lipton fights back against Snapple
with their two new ready-to-drink iced teas.
- The Lipton original would come sweetened or unsweetened
in a 16-ounce glass bottle, and that was about a dollar.
Lipton Brisk came in a 12-ounce can for about 50 cents.
So that one was for the more cost-conscious.
- They also introduced a new joint venture with Pepsi.
Lipton was now able to bottle its products
using Pepsi's bottling lines,
and it also had the marketing might and the sales force,
and that breathed fresh life into the brand.
[rousing music]
- This is bad news for Snapple.
- [Narrator] With Pepsi's backing,
Lipton spends nearly $30 million on a media blitz,
and within months, outsells Snapple
in key regions like the West Coast.
- The Snapple founders realize
that they need to come up with a solution here,
and they don't have the resources that Lipton does,
now that they've teamed up with Pepsi especially.
It's kind of a David versus Goliath situation.
- [Narrator] While Lipton and Snapple trade blows,
a tiny brewery in Brooklyn can't even get off the ground.
- Hornell Brewing made malt liquor and cheap beer.
It came to a point
where they just really wanted to expand their business.
- [Adam] Hornell's got a big problem though.
They are making a product
that only people over 21 years old can enjoy,
the customer base is almost overwhelmingly men,
and they're really only doing their business
May through August.
The winter months are utter crap for them.
- You got enough iced tea?
- That there?
That's not gonna last a week.
- You really sell that much, in the winter?
- Doesn't make sense, does it?
- [Narrator] He doesn't know it yet,
but this moment will transform his failing beer business
into a multi-billion dollar powerhouse,
disrupting the iced tea industry,
and bringing Snapple and Lipton to their knees.
[rousing music]
- [Narrator] In the early 1990s, the partners of Hornell Brewing
look for ways to help their floundering business.
- What the hell do we know about brewing tea?
- We already brew malt liquor.
How hard can it be?
- John Ferolito and Don Vultaggio
were childhood friends,
and they decided to go into the
beer distribution business together.
- They team up right after high school,
buy a VW Bug for $200, and use it to deliver beer
all around Brooklyn, Manhattan, and Queens.
- [Narrator] In the early 80s, they pivoted to brewing,
making a malt liquor called Midnight Dragon.
- Malt liquor is different from more traditional beer,
because it is produced by fermentation
rather than distillation,
which means that it has a higher alcoholic content.
- [Will] Malt liquor is pretty much synonymous with value.
They are already learning,
hey, not everything needs to be something highfalutin.
People want more alcohol.
They want it quick, they want it cold.
It's that simple.
- [Narrator] But sales of Midnight Dragon
have been sporadic at best.
- Think about it.
Everyone, everyone can drink iced tea,
men, women, young people, old people, all year round.
- And he realizes, they have product development experience.
So he thinks, you know what,
we can actually make a better iced tea
than what's been selling in stores.
- Yeah, but there's already Lipton and Snapple.
That's like going up against Coke and Pepsi.
- Okay, then we'll be Dr. Pepper.
[dramatic music]
If there's room for two, there's room for three.
- They brew beer, and you could see why they would think
that's more complex than making iced tea.
But in reality, brewing tea is also super, super difficult.
There's a lot of varieties,
and brewing beer doesn't give you direct knowledge
into how to make really good iced tea.
[rousing music]
- [Narrator] Meanwhile, Snapple is facing
a very different reality.
Pepsi-backed Lipton is outspending them
on a scale they can't match.
- What time is he supposed to be here?
- Half an hour ago.
- [Narrator] In 1991, they roll the dice
on an unconventional marketing strategy.
- Should we call his people to reschedule?
- I'm sure he is always late.
- Instead of TV or print advertising,
Snapple decides to save money on radio ads,
because they know folks are stuck in their car
for long commutes, everybody's listening to the radio.
- [Narrator] They want who, like Snapple,
feels outside the corporate mainstream
and hasn't yet reached his peak.
- [Adam] They focus on one particular disc jockey
who is as hated as he is loved, revered as he is reviled.
- Mr. Stern, big fan.
Welcome to Snapple.
- The one, the only, Howard Stern.
- [Narrator] In 1991, Howard Stern
hosts a popular morning radio show in New York
that's just starting to be syndicated beyond the city.
Snapple takes a major gamble,
putting up $2 million to sign Stern.
- They decide to include a clause
that requires Stern to read the ads himself,
and you never know exactly what he's going to say.
- [Jason] Sometimes he calls it Crapple,
but most times he calls it Snapple.
Even so, he seems to have fun with it,
he genuinely seems to like Snapple
when he is talking about it.
- It was naughty, and fun, and dangerous,
and it was right there on your FM dial,
and that's where Snapple was.
- [Narrator] Within a year, Stern's show breaks out,
becoming the highest rated radio program in the country.
- As Howard Stern's own star rises,
Snapple's star rises right along with him.
- [Narrator] By the end of 1991,
Snapple's revenue more than doubles to $95 million,
enough to put Snapple
back at the top of the iced tea market.
- I mean, it was the perfect synergy.
Stern, Snapple equals success.
[suspenseful music]
- [Bobby] Imagine being in Lipton's shoes.
This is a company with a hundred-year lineage,
and they're getting absolutely stomped
by these industrious guys from a health food store.
- [Narrator] But Snapple isn't Hess's only threat.
[suspenseful music]
In Brooklyn, Vultaggio and Ferolito work feverishly
to turn iced tea into a three-way race.
- I think we're too late.
- This era really marks the rise of iced tea.
- [Narrator] In one year,
ready-to-drink tea sales jump 50%,
while soft drinks grow by less than one.
- There's a move away from soda
as Americans are looking for healthier beverages to consume.
You get a number of other companies
that begin to move into the iced tea space.
- [Adam] Coca-Cola and Nestle decide to join forces
with a $20 million ad campaign,
and Nestea becomes the number three most popular brand,
behind number one Snapple and number two Lipton.
- [Katie] But then you also have brands like Mistic, Apple & Eve,
Turkey Hill, you have Nantucket Nectars
launching their own iced teas,
and the market is really growing.
[rousing music]
- They've spent months tinkering with this recipe
and trying to come up with something
that they think is gonna compete with Snapple and Lipton.
But now they start to wonder,
is the tea market already oversaturated?
[rousing music]
- [Narrator] In the early 1990s, the explosion of tea brands
blindsides Vultaggio and Ferolito
just as they are finalizing their recipe.
- What do any of these have that our iced tea doesn't?
- Let's see, distribution, branding, advertising.
- They don't have our taste.
Ours tastes better.
- Taste alone isn't enough, not anymore.
- With all the entrants in this space,
store shelves and refrigerator cases are just so crowded.
- Don and John had been in the beverage business
for about 15 years at this point,
and they learned that their taller malt liquor cans
really stood out on a shelf.
[rousing music]
- How's that for making a statement?
[rousing music]
- Right now, close your eyes, picture a can of beer.
The can you're thinking of is a 12-ounce can.
Hornell's Midnight Dragon comes in a can
that is affectionately known as a "taller boy,"
or a silo that holds, I kid you not,
24 ounces of malt liquor.
I mean, just one sip and you break out in handcuffs.
- [Narrator] The taller can offers more
than just a greater amount of tea.
- Don and John learned in the malt liquor business,
a bigger can gives you more space
to create an eye-popping design, to stand out.
So they decided to turn this giant can
into a walking billboard.
- [Adam] The image they want to evoke in their iced tea
is someplace that is faintly exotic,
someplace where people might drink
iced tea every single day.
So, they look at a map and they ultimately decide,
Santa Fe.
- Don himself said that he had never even set foot
west of the Mississippi.
He's a very East Coast guy.
But he and his wife had just bought a house,
and they decked it out in a southwestern theme,
the turquoise, the pinks, the yellows,
so much so that friends would joke
and call it the Santa Fe House to kinda make fun of him.
- What's the matter?
- I like it.
It's just that Santa Fe doesn't quite sit right on a can.
It needs one word, like Snapple or Lipton.
[rousing music]
- I think I have an idea.
- Then suddenly, Don realizes his uncle moved out west
when he had lung problems, to a hotter, drier climate,
and his uncle moved to Arizona.
- What's with the capital Z?
- Looks better that way.
[rousing music]
- [Narrator] In May of 1992,
AriZona Iced Tea launches in New York City.
It's 30% bigger than Snapple,
and twice the size of Lipton Brisk.
- Vultaggio and Ferolito use the same distribution network
as bodegas and gas stations
that they did for their malt liquor,
and they're doing zero marketing or advertising.
- [Narrator] It's a cost-cutting strategy
that allows them to sell their cans for 99 cents,
the best deal in ready-to-drink iced tea.
- Don believed that if he made a great product
that stood out, that was sold at a reasonable price,
it would just kind of sell itself.
- AriZona Iced Tea is a promise, you know what I'm saying?
Look how promising that can is.
There's so much more iced tea.
99 cents? I got a buck in my pocket.
Everything about that is promise and fulfillment.
- The lemon flavor wasn't that artificial lemonade flavor.
It tasted more like you squeezed a bit of lemon
into a glass of tea.
And the sweetness was much more like honey
than it was sugar.
- [Narrator] In its first year, AriZona sells 700,000 cases,
earning over $10 million.
One year later, it overtakes Nestea.
- It found itself in third place.
So they were still behind Lipton, the old guard of tea,
and Snapple, which at the time was kind of
the upstart darling of the market.
[suspenseful music]
- Apparently it's been outselling Nestea.
- It's one after another.
- [Narrator] Lipton's Hess is most focused
on taking back the top spot.
- We have to position ourselves
as being the authentic traditional iced tea.
How do we do that?
- By this point in time,
Snapple controls about 25% of iced tea sales,
but Lipton is only 12%.
So they're quite far behind in this race.
- Maybe, instead of telling consumers
that we're authentic and traditional,
we tell them the competition isn't.
[suspenseful music]
- [Adam] In 1993, Hess decides to attack Snapple,
saying that they use a powdered drink mix,
and that their claims about being real brewed
and all natural are all false,
that they're all lies, they're all hokum,
and that if you want real tea, go to the company
whose tea you've been drinking for generations.
- [Narrator] Though the charges are unfounded,
the damage to Snapple is swift.
- The smear campaign works.
In the summer of 1993, Lipton reclaims its spot
as the number one ready-to-drink
iced tea company in America.
[suspenseful music]
- As if losing the number one spot to Lipton wasn't enough,
the attack ad triggered an FDA investigation
into how Snapple makes their tea.
- Okay, so what?
It is all natural.
Why don't we just tell them what's in it?
- It's not an easy attack to defend,
because Snapple can't just come out and tell the FDA
how they actually make their tea
without revealing all of their trade secrets,
and I think Lipton knew that.
- They don't just want the ingredients,
they want the recipe.
[suspenseful music]
- [Narrator] In 1993, the Food and Drug Administration
has launched an investigation
into Snapple's proprietary recipe.
- In the beverage business,
original, unique recipes, that's your currency,
and giving away your recipes to the public
would destroy the company.
- What if we just didn't say real brewed?
That's all they're really questioning.
- Then what do we say?
- Made with the best ingredients,
or the finest tea leaves.
- Doesn't sound like us.
How would we say it?
- The best stuff.
- They were always good about coming up with innovative ways
to solve their problems.
They replaced all natural
with a clever description of their product,
one that people will associate with Snapple
for the rest of time.
- Snapple, made from the best stuff.
- On earth.
- Now we just need a supermodel
to say it on national television,
like Pepsi and Cindy Crawford.
- Brands have always hired celebrity spokespeople,
but in the 80s and 90s, things reached entirely new heights.
You have Coca-Cola, and Nike, and Pepsi
paying astronomical sums to hire athletes and supermodels.
- [Narrator] But Snapple has always taken
a more creative approach to advertising.
- You guys gotta hear these.
We got a letter from a lady who says,
"Snapple is perhaps the only good thing
that has ever come out of New York."
- Wendy Kaufman is a Snapple employee,
and she's taken it upon herself
to respond to the fan mail the brand was getting.
- And here's another one.
- Look, you'd expect a celebrity to be getting fan mail,
but this is a bottled iced tea.
- What?
- Wendy, can you say,
"Snapple, made from the best stuff on earth?"
- "Snapple, made from the best stuff on earth."
[rousing music]
- Wendy felt that people that were taking the time
to write fan letters to a product they love
should be responded to,
and that's what the commercials were.
- A while ago, I got a letter from Michael Lesage.
"I'm getting married in June.
I would like to lay in a supply of Snapple for the wedding."
That's so romantic.
- [Narrator] The ads are unorthodox, funny,
and inexpensive compared to Lipton's,
and they turn Wendy Kaufman into a national sensation.
- What better representation of your brand,
built on the foundation of being real,
and natural, and authentic?
- [Adam] People felt, hey, I know someone like Wendy,
and if nothing else, I want to consume the product
that feels that she is worthy to be the face of their brand.
- [Narrator] By 1994, Snapple pulls in $674 million,
and reclaims the number one spot.
But while Snapple is soaring,
after a meteoric launch, sales of AriZona have stalled.
- By the mid 90s, AriZona Iced Tea was available nationwide,
but they were still primarily confined to liquor stores,
to gas stations.
They hadn't broken into those big grocery store chains.
- [Narrator] To make matters worse,
costs have been rising, pushing profits down.
- [Katie] In the mid 90s, the price of aluminum rises sharply,
30% in just six months.
So pretty much everyone who's selling canned drinks
also raises prices, but AriZona doesn't.
- Maybe it's time that we raise our prices.
- No, no.
- Even though it's cutting into margins,
they wanna stay committed to that low price.
- We're the value brand.
Big can, low price.
That's our thing.
If I had it my way, we'd never raise our prices, ever.
- Look, retailers are gonna charge you what they want.
We can't change that.
- Vultaggio wants to keep the price
of AriZona Iced Tea at 99 cents,
but that only works if he's selling at a high volume.
If stores end up marking up the cans
of AriZona Iced Tea on their own,
it loses its value,
and customers are totally turned off.
- What if we could?
What if we wrote the price right on the can?
[suspenseful music]
- Don has that true real Brooklyn integrity,
God love him,
and he says, "not only are we not gonna raise our price,
we're gonna print the price right on the can."
The price is 99 cents, and that's what it is.
- [Narrator] In 1996, AriZona unveils a new can design,
stamped with a bold, non-negotiable price.
- That big 99 cents right on the can
is like a beacon to consumers,
and almost overnight, sales trended completely upwards.
- [Narrator] By 1997, AriZona breaks into major supermarkets
and pulls off the unthinkable.
- By keeping their price point and a high quality product,
they actually found their way to the number one spot
in ready-to-drink iced tea.
- [Narrator] In just over half a century,
as coffee, milk and soda had lost ground,
iced tea consumption in America
has increased nearly fivefold.
80% of all tea drank in the nation is now iced.
- [Bobby] How amazing is it to think
that this converted health food store in Brooklyn
ended up reshaping the way that we look at beverages
for the rest of time?
- [Narrator] Snapple stays quirky,
and adds fun facts beneath their bottle caps in 2002.
Today, they earn over $6 billion a year.
Yet the original tea giant is still very much in the fight,
even using pop culture driven Claymation ads
to give Brisk Iced Tea a distinct youthful edge.
- Lipton Brisk and bottled iced teas
pull in nearly a billion dollars a year,
and they're sold in over a hundred countries.
So, that's not bad for a company
that's been around for 125 years.
- [Narrator] But of the three, AriZona is still on top,
moving nearly three billion cans a year
without ever raising its price.
- [Will] That towering can with the big 99 cents,
it was just a signal to the masses out there
that there is a company that actually cares about you.
It's cheap, it's great.
- [Narrator] Together, they've turned a little known
Southern refreshment into an American icon.
- I'm fairly certain that if a doctor
were to take a syringe of my blood,
I would come out at least 30% diet peach iced tea,
and I'm fine with that, perfectly fine with that.
I love iced tea.