Mr. Tea

In a faddish market in which buzz often beats flavor, AriZona Beverages billionaire DON VULTAGGIO is betting his new alcoholic drinks will crash Twisted Tea's party simply by tasting better.

Nearly every inch of Don Vultaggio’s factory in Edison, New Jersey, roars with machinery pumping out the sweet smell of tea. But a conference room on the second floor is a quiet sanctum, and that’s where, on a warm Wednesday afternoon, the AriZona Beverages co-founder is hosting his company’s quarterly sales meeting. Vultaggio, sporting a long-sleeve AriZona shirt and white cargo shorts, wanders among his employees as they sip samples out of tiny paper cups. They’re comparing AriZona’s lemon and peach hard teas to those of market leader Twisted Tea. “When I tried Twisted Tea, I was amazed how bad it was,” Vultaggio, 71, declares. “On our worst day, we couldn’t hope to make it taste that bad.”

Hard tea has overtaken hard seltzer as the fastest- growing malt-based “beer alternative,” a category that also includes ciders. Over the past year, Americans chugged $1.3 billion worth of hard tea, according to NielsenIQ, up 40% from the previous year—and nearly all of it Twisted Tea, which has roughly 90% market share.

“We’re in a category that has been dominated by a couple of stale brands,” Vultaggio tells his employees. He then corrects himself: “It’s been dominated by one.”