Don Vultaggio, founder of AriZona Beverages, only attended high school and went from the streets of Brooklyn to the Forbes list of billionaires
In the 1960s, decades before founding the company that would become the $2 billion Arizona Beverages iced tea empire, Don Vultaggio was a determined teenager working for U.S. $1 (R$4.91) per hour in a supermarket in Brooklyn, in the United States, and dreamed of greatness. Ambitious, he improvised a pricing gun with an extra spring that allowed him to work faster than others. If a colleague packed two boxes, he guaranteed to pack three.
“We were sitting there, and he was like, ‘I’m going to make it,’” recalls Al Paturzo, who worked alongside Vultaggio at the time and is now his operations manager. “And he didn’t say that because he thought he was going to win the lottery or anything like that. It was because of his hard work.”
Vultaggio left the store and co-founded an alcoholic beverage business. He made a small fortune from malted beer, but really got rich in the 1990s when he switched to tea. Their AriZona Iced Tea cans were bolder (thanks to the packaging), larger (due to the use of tall beer cans) and a better offering (priced at 99 cents) than the rest of the market. AriZona soon surpassed Snapple and became a staple on shelves across the country, helping Vultaggio amass a fortune now estimated at US$6.2 billion (R$30.44 billion).
The key to your success is not only hard work but also unconventional thinking. He spends $0 on traditional marketing like TV commercials and billboards, trusting that his drinks will gain popularity organically if they taste good, attract attention and are priced fairly. “The best advertising for us is people who are satisfied with what we are offering,” he says. He’s keeping the same approach with his new line of alcoholic tea products, even as he competes against a giant in the category that does a lot of advertising.
It’s no surprise, then, that much of Vultaggio’s business advice to others is also unconventional. In recent conversations in his office at the new US$300 million (R$1.47 billion) factory in Edison, New Jersey, he told Forbes what he believes it takes to succeed, detailing his advice for young entrepreneurs.
1- No matter how big your company is, act as if it were small
“That’s the way to be successful,” says Vultaggio. “A lot of executives at these companies say, ‘We’re big, we have to waste money. That’s how things work.’ He says a think-small attitude has helped him keep his famous tall cans priced at 99 cents since the company’s founding in 1992. Doing so requires constant innovation to find new ways to reduce costs, from increasing production speeds to making deliveries at night to shrink the cans and hedge aluminum futures. “You can waste money all day, but at some point you will ask your customer to pay the bill.”
2- Talk to everyone
Don’t just discuss your business with executives, do it with everyone remotely involved in the company. During the AriZona workday, it can be difficult to find Vultaggio because he is constantly walking around, talking to everyone from the clerk to the forklift operator. The employees joke that he could never participate in Undercover Boss (a TV show in the USA in which the owner poses as a factory floor worker in his own company, to get to know his employees) because he knows everyone. “Most people think there is genius in solving problems,” says plant manager Ron Zeitoune.
He says he learned from Vultaggio that truly, “the genius is in collecting data. If you don’t have good data, you can’t make a good decision. Most people depend on high-level people to give them a distant picture of the problem. Don doesn’t make that mistake. If he wants to see how something works, he literally calls the person who works on that thing.”
3- Pretend your family works for your company
Vultaggio remembers visiting his old factory years ago and finding the bathroom dirty and devoid of soap and paper towels. “’This isn’t how I work,’” he remembers telling his manager. «‘If your sister worked there, or your mother or your aunt, I think it would turn them off.’ You have to do things as if your family worked there.” (When the manager didn’t make improvements, he was fired.) Vultaggio kept that philosophy in mind when designing his new factory, prioritizing employee comfort and convenience with features like a gym with a glass wall that overlooks the machines.
4- Your workplace can and should look beautiful
“Most guys don’t paint their spines pink and green and put polka dots on them,” says Vultaggio. He does. He believes that workplace aesthetics have a huge impact on employee morale. So he took suggestions from factory workers about the new decor, which is reminiscent of Disney in places and features fake cherry blossom trees, antique car displays and doors painted with murals of sunsets on saguaro cactuses. Each mural cost US$400. “It’s money well spent. It makes it more cozy,” says Vultaggio. Factories often look like dungeons, or Russian prisons, he said. But his? “It’s like an art gallery. Why shouldn’t it be?”
5- Accept an unconventional education outside the classroom
Vultaggio almost dropped out of high school. Distracted and probably dyslexic, he got terrible grades, passing Spanish only by convincing the teacher that he was too cool a student to fail (he says that’s when he learned the importance of being a salesman). He never read a book. But he is a born learner. He acquired mathematical skills from his job at the supermarket and his broken Spanish on the streets of New York. “I’m not saying school is bad,” he says, noting that it works for a lot of people. But for him? “It was just a huge waste of time. What I learned outside of school was much more important than what I learned at school.”
6- Don’t ask your employees to do something you wouldn’t do
Certainly, a typical day for Vultaggio includes predictable high-level decision-making and taste testing. But you’ll also find him sweeping, mopping, and moving furniture. “He doesn’t ask us to do something he wouldn’t do,” says Amish Patel, head of operations. This helps employees feel respected and also gives Vultaggio a chance to demonstrate how he wants a task done. On one memorable day a few months ago, he operated a forklift for eight hours straight to show the team how to organize their new warehouse. “He won’t drive until he’s tired. It will do the job,” says plant manager Zeitoune. “He’s going to do it himself and show us. And we learned that day.”
7- Walk with a pebble in your shoe
“In business, you have to walk with a pebble in your shoe. Every day you take a step, feel that pebble”, says Vultaggio. “It reminds you not to take anything for granted.” If you get too comfortable, you will fall into lazy habits. In retail, this could mean failing to closely monitor consumer tastes as they change. Vultaggio argues that this is what happened to A&P and Sears, once-massive conglomerates that went bankrupt and faded into irrelevance: they acted as if “customers didn’t matter” and put the wrong items on the shelves. “It’s this kind of attitude that makes you bankrupt,” he warns. “Competition will always come.”
