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So how did Vultaggio, the 6-ft. 8-in. son of an A&P produce manager, who started out hawking beer in New York City from the back of a Volkswagen bus (he proudly recalls being a victim of armed robbers and once threw a brick at a robber's getaway car), wind up building a New Age--drink business, selling bottles adorned with cherry blossoms? From death stares to drapes in three easy steps. Vultaggio and partner John Ferolito established a semisuccessful beer distributorship before trying to produce their own brands. Their first choices were a little less refined than mandarin-orange-flavored green tea sweetened with honey. They started Midnight Dragon malt liquor in the mid-1980s and, to promote it, printed thousands of posters featuring a scantily clad woman sipping Midnight Dragon through a straw and a vulgar tagline. Midnight Dragon peaked at 3 million cases annually. In the early '90s, Vultaggio's Crazy Horse malt liquor took off, until protests and lawsuits from Native American groups compelled some states to ban it.
Vultaggio found his next business, iced tea, through his most trusted adviser: his gut. On a frigid February day in 1990, a Snapple delivery truck interrupted his sales pitch with a lower Manhattan store owner. "I'm knocking myself out trying to get a five-case order of beer, and this guy is taking 100 iced teas," Vultaggio says. "What am I doin'? I said, I gotta go into the tea business." That was his million-dollar focus group. "Yeah, I was focusing," he says. "Wow, that's big."
Snapple was then the hot brand, so Vultaggio needed a way to distinguish his iced tea from his new rival. He picked the name Arizona after staring at a map; his Uncle Vito had moved there to ease his asthma. Vultaggio saw pricing as his true opportunity: Why not give the consumer a 24-oz. can at the same price as Snapple's 16-oz. bottle? After developing the drink with the help of a "flavor house" in New Jersey, Vultaggio dispatched his sales force to Manhattan. "Some of those guys couldn't sell lemonade in Saudi Arabia in the summer, and they come back with orders," he says. Vultaggio would sift through Dumpsters and shake Arizona cans to see if consumers were gulping it down, and he still uses the tactic, which he calls the garbage survey. "You talk about the latest data," he says. "Garbage is usually cleaned every day." From 1992 to '94, Arizona grew from $20 million to $300 million, and it now outsells Snapple.
Over the past decade, Vultaggio has rejected overtures to sell his company as well as frequent advice to take it public. "Why do we want to have these Wall Street guys coming around to complicate it?" he asks. Vultaggio says remaining independent lets him move drinks quickly to market. He sees an alluring piece of cobalt-blue glass on the beach, and a few months later, Arizona has a cobalt-blue bottle. Vultaggio has discussed a distribution deal with Coke that would put Arizona in Coke's vending machines. Without the vast distribution networks of Coke and Pepsi, Arizona still lags behind Nestea and Lipton in vending machines and fast-food fountains. Vultaggio says Coke has talked to him about buying out Ferolito's share of Arizona, with Vultaggio still retaining full control. "That's the only way I would do it," Vultaggio says.