UR is working on finalizing a contract that will give Coca-Cola exclusive rights to sell their product on the River Campus, the Eastman School of Music and Strong Memorial Hospital. When finalized, the contract will restrict Pepsi products to limited shelf space at UR, possibly only to be sold at the Corner Store.
UR’s Director of Purchasing and Operations Quentin Roach said the university took many issues into consideration when deciding on Coke as the exclusive provider for UR, including monetary benefits, operational improvements and the best overall fit for the university.
“When we make these deals, first and foremost, we look for things that will positively affect the UR community,” he said. “This contract is good for the UR community.”
Discussions have been ongoing for about a year and UR gave PepsiCo and Cadbury-Schweppes, in addition to Coke, several opportunities to submit and resubmit plans.
Coke’s overall package was better than Pepsi and Caderbury-Schweppes, Roach said, highlighting Coke’s commitments outside of the money required to secure the contract. He pointed to Coke’s expertise in marketing and the creation of a student intern position at UR to coordinate assistance.
“The deal will bring in marketing and advertising expertise from a highly respected national company,” he said.
Money from the agreement will go to help run UR’s dining operations and improve general infrastructure.
Roach said community involvement was important to the decision, as a committee of students, faculty and staff analyzed the volume of soft drinks sold at UR, the amount of dollars spent on related products at the university and surveyed members of the university community to find out their preferences.
“We went through a very thorough analysis of product sales at [Strong], Eastman and the River Campus,” he said. “Coke was the predominant choice of the university. This was not just a decision of the Purchasing Department.”
Roach also pointed out that UR wasn’t unique in giving an exclusive contract to a sofa drink manufacturer.
“Look at every university campus, almost everybody has a deal,” he said. “This is not unusual on college campuses.”
The length of the contract has not been set in stone yet, but Roach thinks it will be somewhere between five and seven years in length. He declined to release the financial terms of the deal, citing university policy, but expects Coke will release numbers on their end once the deal is finalized.
He advised the number would be inflated and would include marketing help, expected sales of product and money given to UR.
“Coke just signed a $25 million contract with Penn State University,” Roach said. “They didn’t see a lump sum of $25 million, however. They saw much less than that.”
Pepsi will probably remain in a very limited fashion on campus because of results of the detailed analysis. The committee found a high demand for Mountain Dew and felt it needed to remain as an option on campus. They included the Mountain Dew condition in the letter of intent that was signed by the Coca-Cola.
Roach said he would continue to look for deals out there that he felt would better the community.
“My goal isn’t to go out there and look for lots of money,” he said. “My goal is to improve university life and we’re just taking advantage of the opportunities out there.”
Plans for the switch over are already underway. Two new Coke drink towers were installed this summer in The Pit after it was renovated. Anderson Paramount, who operates all vending machines around campus, has begun removing all Pepsi machines from area residence halls and from locations around campus.
Currently, the first draft of the contract is under UR review and Roach said he expects the entire contract to be approved by his group and UR lawyers within the next couple of months.
Hildebrandt can be reached at firstname.lastname@example.org.