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Pepsi deal to bring $10 million to university

By Dave Jones on September 9, 2014 in University News

There will be a different flavor to the UC Davis campus this fall: Pepsi.

The university will begin selling Pepsi products after signing a letter of intent for a 10-year agreement that will bring the campus nearly $10 million in support for students.

Pepsi plans to have its products in place before freshmen move into residence halls at the end of September.

When final, the agreement will give Pepsi Beverages Co. near-exclusive rights to sell, advertise and promote its soft drinks and other products in campus dining commons, athletic concessions, catering, cafeterias and retail stores. The UC Davis Health System has a contract with Pepsi that expires in October 2015, after which the health system will become part of the new agreement.

Funds for student services and programs

In exchange, the terms provide UC Davis with $10 million for student services and programs, including academic support in athletics, nonathletic scholarships, sustainability projects and the purchase of electric carts for athletics, as well as goods and support for marketing, summer camp, youth programs and more.

A subcommittee of UC Davis' Commercial Activities Advisory Group that is negotiating the contract will determine how funds will be used to support student services and programs.

The agreement allows the university to sell competitors' products on up to 10 percent of the shelving allocated for beverages in its retail stores.

The leadership of the Associated Students of UC Davis, which runs the Coffee House, opted to not participate in the agreement at this time.

Pepsi's signage and advertising rights will be determined prior to the execution of the final agreement but will include rights to advertise the sponsorship of the university and its athletics teams as well as sideline sponsorship and player-area benefits for Gatorade products. 

Gatorade sports drinks are among the Pepsi lineup that also includes Lipton tea; Aquafina, SoBe and Propel waters; and Naked Juice. Pepsi's offerings at UC Davis will include low- and no-calorie options as well as beverages with 100 percent natural ingredients.

Beverage Alliance

To negotiate better value, UC Davis formed a Beverage Alliance to consolidate the purchasing power of Dining Services, the Department of Athletics, Campus Recreation and Unions, UC Davis Stores and the UC Davis Health System.

UC Davis followed its standard process for making requests for proposals and reviewing them.

The university's earlier agreement with Coca-Cola, which guaranteed $1.5 million plus vending commissions over 10 years, expired in January and was extended to the end of June.

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Media contact(s)

Dave Jones, Dateline, 530-752-6556, dljones@ucdavis.edu

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