Utah State University announced Monday it has negotiated a $327,000 deal with Pepsi, offering the soft drink giant exclusive rights to beverage vending machines on campus.
USU had announced in August it would not grant exclusive rights to allow soda sales on campus to either Coca-Cola or Pepsi. The university administration has since decided to contract all vending machine operations. Pepsi will take the beverage end while Quik Vending of Salt Lake City will provide food and snack vending services.While the five-year agreement with Pepsi will deal only with vending machines, the deal gave the university some perks it couldn't pass up, said Dean Wright, director of USU Food Services.
"Pepsi just came to the table with more stuff," Wright said. "We opted to go that route because the financial remuneration to the university was much stronger."
The terms of the agreement are:
- Pepsi will donate $15,000 a year for five years to USU's general scholarship fund. USU will decide how that money is divided.
- The university will receive $13,000 a year for four years to upgrade its vending areas. This money will come starting the second year of the agreement.
- Pepsi will spend $10,000 a year for five years on promotions at USU. While promoting vending sales, Wright said, all the money will go to students in the form of money, prizes or waivers for books, fees or tuition.
- $150,000 will go toward configuring the machines to take USU Food Service debit cards.
The deal with Pepsi and Quik Vending will also bring new vending machines to the school vending areas. The average age of the current machines is 12 years, Wright said. Some of the machines are at least 20 years old. Wright hoped the new machines should be in place by Nov. 1.
Wright said the deal will not preclude Coca-Cola from being sold on campus.
"It's not a Coke campus or a Pepsi campus," he said. "Coca-Cola is taking a pro-active stance so that they won't lose market share on campus." Coca-Cola products will still be available at campus cafeterias and convenience stores.
"We still have a strong business relationship with Coca-Cola, and our students will still have choice," Wright said.
Paul Norton, USU's vice president of University Relations and Development, said the possibility of agreements dealing with other campus soft drink outlets is still open.
"The objective is to maximize our revenues and at the same time provide services to students and faculty," Norton said. "We are going to see if there are other revenue streams that we can secure. We are pursuing all avenues."