BAMANEWSBOT
Staff
Coca-Cola Bottling Co. United-Central and the University of Alabama have entered into a 10-year agreement for the exclusive rights to fountain drinks and beverage and snack vending on campus.
The 10-year contract began July 1 and is independent of an agreement for UA’s athletic facilities. As part of the deal, the company will pay the university around $2 million annually for the exclusive rights and other contributions including scholarships, in-kind support, promotions, and funds for capital improvements in dining facilities.
The contract was awarded after a request for proposal by the university, Associate Vice President of Communications Monica Watts said. The contract was previously held by Buffalo Rock Co. but Coca-Cola’s bid offered higher revenue, Watts said.
“Coca-Cola United is thrilled about our expanded partnership with the University of Alabama to serve its students, faculty and staff on campus,” said Bo Taylor, vice president of Coca-Cola United’s central region, in a statement released by the company. “Coke United’s business culture for more than 100 years has been based on relationships.”
This year, Coca-Cola United and the Coca-Cola Co. also extended its contract with Crimson Tide Sports Marketing for pouring rights and marketing at all UA athletic events.
As part of the agreement for pouring and vending rights on campus, the beverage company is granted exclusive obligations and rights to fountain pouring rights, beverage and snack vending on campus, multi-product dispensers in dorms, retail shelf space and non-permanent cooler space in retail locations, and 80 percent of the space in fixed coolers in retail locations on campus with first choice of placements in the displays.
The company will provide the university a guaranteed annual minimum vending sales commission of $630,000 in year one with a 5 percent annual increase for the remainder of the contract until it reaches $977,337. It will also pay $1.15 million for a sponsorship fee and promotion and advertising rights annually.
The university will receive a monthly vending commission on the gross sales of beverage and snacks ranging from 27.5 percent to 54 percent. The beverage company will provide and maintain the vending machines. The vending machine prices for years one through five will range from $1 to $3 for beverages and snacks. The prices will begin increasing by 25 cents annually in year six.
The vending machines will offer cashless purchases options including debit and credit cards, Apple Pay, Google Pay, as well as the student ACT card and cash, on all vending machines.
The beverage company also agreed to:
‒ Pay the university $10,000 annually for the university recycling program
‒ Provide $10,000 worth of beverages as an in-kind contribution for university activities with a 5 percent annual increase for the remaining years of the contract
‒ Spend $10,000 in discretionary funds for capital improvements
‒ Pay $70,000 annually for scholarships
‒ Spend $20,000 annually on mutually-agreed upon marketing programs to promote sales on campus
‒ Spend $10,000 annually for dining enhancements.
The company will also provide benefits, such as
‒ Including UA in its campus ambassador program
‒ Providing two speakers for a campus speaker series
‒ Providing a summer internship for a student
‒ Providing product sampling events on campus throughout the year
‒ Providing advertising messages that promote university activities on the beverage company’s trucks.
UA will not permit the sale or distribution of competing beverages on campus unless permitted as a recognized exception by the contract. The permitted exceptions include beverages from Starbucks, Dunkin’ Donuts, Smoothie King, or other future restaurants that may locate on campus.
The restaurants currently serving Pepsi in the Ferguson Center will be changed to Coca-Cola products, Watts said. Starbucks, Dunkin’ Donuts and Smoothie King are allowed to serve their drinks in their cups, she said. Starbucks is allowed to market its products, including on social media.
The contract also includes an exemption for Chick-fil-A lemonade. Beverages not subject to the exclusive rights also include products used for academic research, bulk dispensed dairy and dairy alternative products, fresh-brewed tea and coffee, hot chocolate, and unbranded smoothies and milkshakes made fresh on site.
Under the deal, the company will sell products to the university for a discount of about 45 percent. The prices will increase annually by no more than 4 percent.
As part of the agreement, Coca-Cola is licensed to use the university’s marks on a royalty-free basis for marketing, advertising, or promoting its products with approval of the materials by UA.
University of Alabama signs 10-year deal with Coca-Cola
The 10-year contract began July 1 and is independent of an agreement for UA’s athletic facilities. As part of the deal, the company will pay the university around $2 million annually for the exclusive rights and other contributions including scholarships, in-kind support, promotions, and funds for capital improvements in dining facilities.
The contract was awarded after a request for proposal by the university, Associate Vice President of Communications Monica Watts said. The contract was previously held by Buffalo Rock Co. but Coca-Cola’s bid offered higher revenue, Watts said.
“Coca-Cola United is thrilled about our expanded partnership with the University of Alabama to serve its students, faculty and staff on campus,” said Bo Taylor, vice president of Coca-Cola United’s central region, in a statement released by the company. “Coke United’s business culture for more than 100 years has been based on relationships.”
This year, Coca-Cola United and the Coca-Cola Co. also extended its contract with Crimson Tide Sports Marketing for pouring rights and marketing at all UA athletic events.
As part of the agreement for pouring and vending rights on campus, the beverage company is granted exclusive obligations and rights to fountain pouring rights, beverage and snack vending on campus, multi-product dispensers in dorms, retail shelf space and non-permanent cooler space in retail locations, and 80 percent of the space in fixed coolers in retail locations on campus with first choice of placements in the displays.
The company will provide the university a guaranteed annual minimum vending sales commission of $630,000 in year one with a 5 percent annual increase for the remainder of the contract until it reaches $977,337. It will also pay $1.15 million for a sponsorship fee and promotion and advertising rights annually.
The university will receive a monthly vending commission on the gross sales of beverage and snacks ranging from 27.5 percent to 54 percent. The beverage company will provide and maintain the vending machines. The vending machine prices for years one through five will range from $1 to $3 for beverages and snacks. The prices will begin increasing by 25 cents annually in year six.
The vending machines will offer cashless purchases options including debit and credit cards, Apple Pay, Google Pay, as well as the student ACT card and cash, on all vending machines.
The beverage company also agreed to:
‒ Pay the university $10,000 annually for the university recycling program
‒ Provide $10,000 worth of beverages as an in-kind contribution for university activities with a 5 percent annual increase for the remaining years of the contract
‒ Spend $10,000 in discretionary funds for capital improvements
‒ Pay $70,000 annually for scholarships
‒ Spend $20,000 annually on mutually-agreed upon marketing programs to promote sales on campus
‒ Spend $10,000 annually for dining enhancements.
The company will also provide benefits, such as
‒ Including UA in its campus ambassador program
‒ Providing two speakers for a campus speaker series
‒ Providing a summer internship for a student
‒ Providing product sampling events on campus throughout the year
‒ Providing advertising messages that promote university activities on the beverage company’s trucks.
UA will not permit the sale or distribution of competing beverages on campus unless permitted as a recognized exception by the contract. The permitted exceptions include beverages from Starbucks, Dunkin’ Donuts, Smoothie King, or other future restaurants that may locate on campus.
The restaurants currently serving Pepsi in the Ferguson Center will be changed to Coca-Cola products, Watts said. Starbucks, Dunkin’ Donuts and Smoothie King are allowed to serve their drinks in their cups, she said. Starbucks is allowed to market its products, including on social media.
The contract also includes an exemption for Chick-fil-A lemonade. Beverages not subject to the exclusive rights also include products used for academic research, bulk dispensed dairy and dairy alternative products, fresh-brewed tea and coffee, hot chocolate, and unbranded smoothies and milkshakes made fresh on site.
Under the deal, the company will sell products to the university for a discount of about 45 percent. The prices will increase annually by no more than 4 percent.
As part of the agreement, Coca-Cola is licensed to use the university’s marks on a royalty-free basis for marketing, advertising, or promoting its products with approval of the materials by UA.
University of Alabama signs 10-year deal with Coca-Cola
