Pepsi, one. Coke, zero.
Penn State has signed a 10-year exclusive beverage agreement with Pepsi, extending the company’s pouring rights for every fountain drink and vending machine on all of the university’s campuses across the commonwealth.
Penn State solicited bids for the contract last year, and both Coca-Cola and PepsiCo submitted proposals. Dan Sieminski, Penn State’s associate vice president for finance and business, said Pepsi was chosen because it “came closest to meeting the requirements and needs of the university.”
“PepsiCo’s overall product mix better matches what our community is asking for in terms of soft drinks and sports drinks,” he said. “The fact that Pepsi was already on campus also meant that there wouldn’t be a need for a lengthy transition period.”
Sieminski said details of the deal are still being worked out, but that the two sides expected to have a signed contract in place on July 1.
Pepsi has had exclusive access to the Penn State market for the last 12 years, meaning only its beverages are offered in Penn State’s dining halls, restaurants and conference, hotel facilities and vending machines. As part of the deal, Pepsi will get advertising space at athletic facilities including Beaver Stadium and the Bryce Jordan Center.
PepsiCo’s products include Pepsi, Mountain Dew, Lipton iced teas, SoBe, Aquafina, Propel Zero and Gatorade. Pepsi spokeswoman Gina Anderson said her company valued its relationship with Penn State.
"Penn State has been a valuable, long-term partner of ours for the past 20 years and we're pleased to build upon that relationship with this 10-year renewal," she said in an email. "We're glad our strong beverage portfolio ... will be enjoyed on Penn State's campuses for many more years to come."
A representative from Coca-Cola declined to comment.
Penn State spokeswoman Lisa Powers said the university is not releasing the terms of the contract, as its details are still being negotiated, but said Pepsi revenues will help make up for funding cuts expected in this year’s state budget.
“As state funding falls short, the university must look to other places for revenue enhancement. This is one area where we can create that opportunity,” she said. “Pepsi also has an impressive track record in sustainability efforts, a key area of focus for Penn State and one of our criteria in evaluating their services. An agreement of this type also allows for a steady level of service and reliability for campus vending, retail and concession operations. That’s important when you have 24 campuses and 90,000-plus students.”
Powers said the 10-year term was “pretty much standard practice” for this type of agreement. If the deal is similar to those signed at similar-sized universities, it’s likely worth tens of millions of dollars.
The University of Minnesota signed a 10-year agreement with Coca-Cola worth $38 million in 2008, the University of Arizona inked a $15 million contract with Coke in 2008, and Ohio State signed a $35 million deal with Coca-Cola, also in 2008.
The University of Pittsburgh did not disclose the terms of a deal it recently made with Pepsi.
Cliff White can be reached at 235-3928. Follow him on Twitter @CliffWhiteNews