CUNY Inks Exclusive Vendor Agreement With Pepsi-Cola; Gains Royalties and Higher Revenue Stream with Single Vendor Contract

September 6, 2013 | The University

The City University of New York has signed a $20.75 million agreement that gives the Pepsi-Cola Bottling Company of New York, Inc., exclusive rights to provide most carbonated and noncarbonated drinks on campuses for the next 10 years. After the contract took effect on July 1, Pepsi distributed first-year royalties totaling more than $1.38 million above the previous contracts that individual colleges had signed with varying vendors.

Future royalties will vary with sales, which also will be the basis for dividing the revenue among campuses. The colleges will use the revenue to enhance programs. In addition, the CUNY Athletic Conference will receive $300,000 over 10 years; previously, it did not receive any income from “pouring rights.” Another $200,000 over the life of the contract will support CUNY-wide or campus-based sustainability initiatives.

In the spring of 2012, CUNY’s Board of Trustees voted to seek a University-wide beverage contract. The trustees acted after Executive Vice Chancellor and Chief Operating Officer Allan Dobrin identified a potentially higher stream of revenue by single University-wide contract instead of the varying beverage contracts that individual colleges had executed with different vendors. Following a standard procurement process, the University named a committee composed of five campus vice presidents for administration and chaired by Deputy Chief Operating Officer for Management Services Burt Sacks. The committee interviewed company representatives, who then submitted their best and final offers. The panel chose Pepsi because it offered more money and more forms of promotional support than competitors. The contract covers carbonated and noncarbonated natural and artificially flavored nonalcoholic beverages, including sodas, juices, cold teas, bottled water, sports drinks and cold packaged coffee drinks.

About The City University of New York:
The City University of New York is the nation’s leading urban public university. Founded in New York City in 1847, the University is comprised of 24 institutions: 11 senior colleges, seven community colleges, the William E. Macaulay Honors College at CUNY, the CUNY Graduate School and University Center, the CUNY Graduate School of Journalism, the CUNY School of Law, the CUNY School of Professional Studies and the CUNY School of Public Health. The University serves more than 269,000 degree credit students and 218,083 adult, continuing and professional education students.College Now, the University’s academic enrichment program, is offered at CUNY campuses and more than 300 high schools throughout the five boroughs of New York City. The University offers online baccalaureate degrees through the School of Professional Studies and an individualized baccalaureate through the CUNY Baccalaureate Degree. Nearly 3 million unique visitors and 10 million page views are served each month via www.cuny.edu, the University’s website.
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