- COMING SOON TO UA: Gatorade and other Pepsi products.
An agreement has been reached by the University of Arkansas to enter an exclusive beverage rights and sponsorship deal with Pepsico, ending a historic association with Coca-Cola, I’ve learned. Effective July 1, barring hitches, Pepsi will be the exclusive supplier of cold, non-alcoholic beverages (still room for an official hot coffee) at the UA, including the critical athletic events. (Luxury suite owners will, if the RFP holds, be able to lug in their own Nehis or other pop of choice, along with winked-at firewater). The RFP also included some exceptions for Chick-Fil-A lemonade and Quizno raspberry lemonade, both sold at franchise outlets on campus, and Dr Pepper, distributed by Pepsi.)
It’s a 10-year deal, according to my source. The tentative agreement will be announced tomorrow (UPDATE: here’s the news release), though terms will be withheld until all parties have officially signed. It could be worth, according to a figure suggested by my source, at more than $17 million over 10 years. According to UA figures, Coca-Cola payments have been averaging about $1.06 million per year the last three years. I don’t know enough about specifics yet to say if the apparent difference is 60 percent better a year because the figures may include factors that prevent them from being directly comparable.
When the UA put the beverage rights and sponsorship out for bids, it estimated the total value of the deal — based on projected sales and value of advertising — at roughly $19.8 million, with $11.4 million of that athletic marketing.
(I should have added at the start that my efforts to confirm this tip with a university spokesman have so far not produced a response. UPDATE: I’ve now confirmed what I’ve reported here with a university spokesman who emphasizes there is no signed contract yet. The UA has issued an “intent to award” to all bidders notifying them that it would be negotiating further with PepsiCo, but specifics are still in flux.)
THURSDAY UPDATE: There’s one narrow exception to the exclusivity deal, a University spokesman noted, in addition to the skybox exception. The two or three convenience stores on campus will be able to reserve 20 percent of shelf space for non-Pepsi products. I got a lot of Facebook and Twitter feedback on this decision last night, majority negative. It’s getting a lot of talk, too, on the UA Facebook page.
What would J. Frank Broyles, son of Georgia who is the former long-time UA athletic director, say about the end to exclusive beverage rights for Atlanta’s Coke?
Doesn’t matter. Money talked in the form of a superior offer in a sealed-bid process. Coke signs have already been coming down around campus.
About that photo above. Real Gatorade showers will now be allowed on the sidelines of Razorback contests because Gatorade is a Pepsi product. UPDATE: In perusing bid documents, I find that the UA already has a separate agreement with Gatorade through 2014.
Pepsi has been pushing hard to take pouring rights on university campuses. The branding with young consumers is important. It nailed down Penn State recently. A few days ago, Southern Arkansas University in Magnolia went with Pepsi exclusively. Magnolia Reporter had details. I believe the UA deal will follow that model — exclusive pouring rights in all campus venues, including through the food service contractor.
Personal comment: Money is money. But Coke, particularly Diet Coke, tastes better.
The university issued a request for proposals last year and had already signaled its intent to find Pepsico the best bid.