THE MARKETING 100; MICHAEL SCHOTT;ARIZONA ICED TEA

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In 1993, Michael Schott went from beer baron to teetotaler.

Brought on as chief operating officer at Ferolito Vultaggio & Sons, then known only as a beer distributor, Mr. Schott put his own suds savvy as general manager of another beer distributor to good use when Ferolito Vultaggio decided to market an iced tea.

The then little-known product was Arizona Iced Tea, and the innovation was that Mr. Schott went national with the brand using a beer-based distribution and manufacturing system.

In just six months, Arizona went from a few select markets to national distribution. In 18 months, it had sold 20 million cases and cracked the $300 million sales mark.

Thanks to that rollout strategy, Mr. Schott, 47, helped turn the small Brooklyn company into a formidable New Age-category competitor ready to take on the soft-drink giants.

"It was inevitable that we would take the brand national," says Mr. Schott. "The growth of the category and the uniqueness of the brand go hand in hand."

Arizona's success is even more astounding considering that advertising is handled in-house and restricted mainly to bus and outdoor boards.

The product's distinctive Southwestern graphics and elongated bottles and cans also mark its 11 teas and juices, up from two teas originally.

With a 12.6% unit volume share in 1994, Arizona still trails Quaker Oats' Snapple, Coke's Nestea and Pepsi's Lipton in the $905 million iced tea segment. But its 100% natural ready-to-drink product outsells Nestea's and Lipton's original varieties, according to Mr. Schott.

"It's one thing to redefine yourself as a beverage distributor," he says, "and another thing to actually go out and do it."

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