Though a new beverage contract with PepsiCo Inc. has yet to be signed, the campus has recently begun to sell the company’s products with the expectation of signing a contract in the near future.
The campus’s prior contract with Coca-Cola Co. expired Aug. 3 after a 10-year term, but campus Beverage Alliance Chair Kurt Libby said a new contract with Pepsi has not yet been signed, though he hopes it will be done by the end of the month. Until that time, the campus will operate under a letter of intent with the company, which Libby said he expects to have signed this week.
“The letter of intent basically says we agreed on the major terms, we’re working out the details and they will be our provider — assuming there’s no major problems we have working out the contract,” Libby said. “It’s basically a ‘bridge the gap’ type thing.”
In May, the campus released a request for proposal stating the minimum requirements necessary for beverage companies to bid for a contract. Pepsi was the only responsive bid.
Among the requirements Pepsi agreed to are an annual $1.3 million sponsorship fee which will be paid to campus stakeholders, $40,000 in product donations, $15,000 for sustainability program support and $235,000 in marketing and promotion funds.
The campus’s beverage consortium accounts for the contract’s stakeholders and is composed of four campus units — the Department of Intercollegiate Athletics, the ASUC Auxiliary, Residential and Student Service Programs and the Recreational Sports Facility.
Once signed, the new contract will be the start of a 10-year agreement granting Pepsi exclusive beverage rights on campus.
As a result of the agreement, Pepsi brands will be located in over 200 on-campus vending machines and at all on-campus retail outlets and athletic venues. The agreement also includes a beverage lineup of Pepsi carbonated soft drinks, Lipton teas, Aquafina, SoBe and Propel waters, Naked juices, Gatorade sports drinks, and other Pepsi-allied and partnership beverage brands.
Additionally, the company will work with students on environmental sustainability projects and offer grants to support student-driven causes and campus events.
“It could be anything from a grant to ‘help a local school that I volunteer at’ or ‘I want to start a community garden,’” said Pepsi spokesperson Kristine Hinck.
Hinck said the agreement with UC Berkeley is unique because “it’s a very environmentally friendly and innovative approach.”
“We worked directly with the folks at Cal, and they told us what the students were looking for, and then we came up with some of our creative solutions that were already in place that would be a perfect fit for the spirit of environmental sustainability,” she said.
The multiyear partnership will also feature four on-campus “Dream Machine” recycling kiosks. The Dream Machine recycling initiative was developed to “support PepsiCo’s goal of increasing the U.S. beverage container recycling rate from 34 percent to 50 percent by 2018,” according to a statement. The Dream Machine program has placed more than 2,600 kiosks and bins in 30 states.
“It’s something any other competitor couldn’t have delivered,” Hinck said. “There’s a lot of really specific environmental sustainability components to this partnership that make it really unlike any other program out there.”
Furthermore, Pepsi will be using energy-efficient vehicles and Energy Star-certified equipment to service the campus and will also support the expansion of the existing on-campus compostable cup program, according to Hinck.
“We’re really excited to begin this partnership with UC Berkeley,” said Scott Loeffler, a director for Pepsi. “Cal’s mission aligns well with PepsiCo’s commitment to deliver what we call Performance with Purpose — a commitment to deliver sustainable growth by investing in a healthier future for people and the planet.”