Coca-Cola will replace Pepsi on UT campus

Deal could provide more than $4.5M in sponsorship fees

University of Toledo employees Chris Graham, left, and Bob Guerrero unload a water cooler to be placed in Horton International House as Coca-Cola products replaces Pepsi.

Coca-Cola isn’t just the pause that refreshes, it’s the pop that pays.

A new deal to exclusively sell Coke beverages at the University of Toledo could mean $4.5 million in sponsorship fees over the life of a 10-year contract plus other perks, according to a draft of the agreement provided to The Blade on Tuesday in response to a public records request made in late June.

UT announced last month it plans to switch its soda sales from Pepsi to Coke beginning Aug. 1, the date the contract must be finalized. Pepsi had held exclusive rights to sell beverages at UT since August of 2005.

Cherry-red Coke coolers are popping up in the student union, as work continues to wipe all traces of the competing brand from campus.

The university in March sought proposals from beverage providers for “pouring rights” and chose Coke’s proposal over Pepsi, the only other company to bid.

Coke estimated the total value of its proposal at $6.9 million over a decade-long term.

In addition to the proposed $450,000 in yearly sponsorship fees, Coke offered to spend $22,610 annually for marketing beverages on campus, and $16,692 annually for merchandising items such as menu boards.

In addition, the company will donate up to $3,000 every year in beverages for student and faculty events.

The proposal also provides $40,000 in the contract’s first year and $10,000 a year for the next nine years for sideline equipment and athletic-related beverage marketing. A vending commission could make UT an additional $115,805 a year, according to Coke’s estimates.

By contrast, the old Pepsi pact provided the university $93,000 a year for “pouring rights” plus athletic sponsorship funds that grew from $37,000 a year in 2005 to $42,000 this year.

Pepsi also paid the university commission from vending machine sales that amounted to $113,035 in fiscal year 2014 and $140,103 the year before, according to information from UT spokesman Brandi Barhite.

The Pepsi deal provided other benefits, such as $10,000 a year for the past three years in product donations and price incentives, and a $150,000 payment in 2012 to offset vending machine networking costs.

The university used proceeds from the Pepsi contract to support student programming and the athletic department. In return, Pepsi signs plastered the Savage Arena scoreboard and appeared in the Glass Bowl football stadium.

Pepsi had 108 vending machines at UT and sold a rainbow of flavors — from diet to regular, Orange Crush to Mountain Dew, Dr. Pepper, Lipton iced teas, and Aquafina water.

A 20-ounce bottle cost $1.50. Coke prices have not been finalized but “will remain competitive,” according to Ms. Barhite.

Coke also will sell beverages at the Health Science Campus, which will maintain its sugar-free drink policy.

Customers will be able to use a debit card at Coke machines, an option not offered by Pepsi, and also pay with UT’s Rocket Card.

In its proposal, Coke suggested promoting the football rivalry between UT and Bowling Green State University, which is also a Coke campus.

BGSU collected $2.57 million over the first seven years in Coke sponsorship fees. A contract extension provides an additional $1.18 million over three years, through May, 2017, plus benefits such as a $6,000 dining services fee, $60,000 in scholarship fees, and marketing and promotional support.

BGSU also makes between $70,000 and $90,000 a year in commission, said spokesman Dave Kielmeyer.

The beverage money is dispersed among a number of departments, with the majority going to support student-based initiatives, Mr.  Kiel-meyer said.

Coca-Cola’s Cincinnati-based spokesman Jennifer Richmond declined to say how many schools have deals with the company, saying Coke has “a wide range of agreements with colleges and universities.”

Contact Vanessa McCray at: vmccray@theblade.com or 419-724-6065, or on Twitter @vanmccray.