Inside Arizona State University's contract with Coca-Cola

Inside Arizona State University’s contract with Coca-Cola

ASU’s contract with Coca-Cola carries the usual terms one would expect from a deal with a giant: Coke will compensate the university about $30 million by the time the contract expires and limit the other types of drinks ASU sells. It also requires the university to encourage members of the community to buy Coca-Cola products, and it requires notable people who appear on campus to consume competing cola products only if a “brand is not visible”.

These types of contracts incentivize universities to market and sell sugar-sweetened beverages, which pose health risks with consumption, according to the Study published in May In the Journal of American College Health. The study found that 124 public universities in America with 20,000 or more students have a unique contract with beverage companies such as Coca-Cola or Pepsi.

Eva Grintal, lead author of the study and senior political assistant at Center for Science in the Public InterestResearch has shown that consumption of sugar-sweetened beverages, such as Coke, has been shown to increase the risk of heart disease, type 2 diabetes, dental disease and obesity, he said.

“Universities can play a really essential role in shaping the food environments of their students, faculty, staff, and communities to promote healthy choices,” Grintal said.

With less than three years left on the ASU contract, Greenthal advises students to “encourage the university to adopt an alternative beverage model or explore improvement or termination of their contract with The Coca-Cola Company.”

Contracts, however, are profitable for the university.

my coca-cola knots, sponsorship agreementAnd the sale agreement Arizona State University has provided $16 million so far, an ASU spokesperson said in an email on July 15. Profits from the contract with Coca-Cola were redirected toward student engagement programs such as Changemaker Central, Programing & Activities Board, and Fraternity and Sorority Life. It also helps the university with initiatives such as building Coca-Cola . Solar Surfacesaid a spokesperson for Arizona State University, an event space at Sun Devil Stadium.

The spokesman added that the university has increased the number of low-calorie or low-calorie drinks it offers on its shelves. The spokesperson said water fountains are available on all ASU campuses “to encourage Sun Devils to choose water over soda or sweetened beverages.”

There is no incentive for students to choose water over sugar-sweetened beverages, says Poonam Uri Vashapati, a professor at the College of Health Solutions.

“Our students come in as young as 18 or 19,” said Ohri Vashaspati, which makes them “still very influenced” by the eating habits they take.

Before speaking to The State Press, Ohri-Vachaspati checked out a Coca-Cola vending machine on her working floor at the Arizona Biomedical Collaborative. Of the 10 or so drinks on offer, Ori Vashaspati said, only one was unsweetened: Dasani water.

“Because of Arizona State University’s focus on health and wellness, I was hoping to see more healthy drinks,” Ori Vachaspati said.

An Arizona State University spokesperson said on August 10 that ASU had not provided information on its previous contracts with beverage companies because the documents were discarded five years after the contracts expired.

UA entered into a contract with Coca-Cola from 2019 to 2029 worth $33 million. NAU’s $15 million contract with Pepsi has a timeline from 2017 to 2032, which Greenthal says is one of the longest pouring rights contracts it has seen.

Contracts of a decade or longer contracts are often beneficial, said Laura Coordes, associate dean of the college and associate professor at Sandra Day O’Connor College of Law who specializes in contract law. It usually does not require constant renegotiation between the parties. However, shorter contracts can allow for renegotiations that follow a change in “market conditions,” a coordinator said.

Sale Agreement

The contract states that the sale agreement allows The Coca-Cola Company to be the exclusive supplier of beverages to the University with on-campus marketing rights.

At the start of the agreement, ASU had 185 Coca-Cola vending machines on campus, and now, the university has 116, an ASU spokesperson said in an email July 15.

The university gets royalties from drinks sold through Coca-Cola vending machines, estimated at $4.5 million 10 years later.

Warranty Agreement

The contract states that the sponsorship agreement makes Coca-Cola the university’s exclusive beverage sponsor and gives them access to marketing rights on and off campus.

There are exceptions, as the university can sell unbranded tap water, milk and coffee. Unbranded Coca-Cola beverages cannot occupy more than 10% of the shelf space in campus stores. Like POD Market. For every drink that does not contain Coca-Cola, ASU must also carry the equivalent Coca-Cola drink. “For example,” the contract states, “If Lipton is to be transported, the Gold Peak must also be carried.”

Ohri Vacaspati sees the amount of marketing required under the contract as “bold”.

People who perform or appear on campus, including athletes, coaches or musicians, may only consume a “limited” amount of beverages other than soft drinks. If this happens, the brand of the product will not be visible.

The contract states that ASU will annually “remind” members of the university of the Coca-Cola Convention and “encourage” them to use Coke in their departments, according to the contract.

Each year, ASU receives about $2 million in sponsorship fees from Coca-Cola, which is about $22 million after 10 years. An ASU spokesperson said that in the first two years of the COVID-19 pandemic, ASU received two-thirds of its annual sponsorship fee because the contract allowed them to “negotiate payments based on sales volume and cancel sporting events.”

In addition to fees, ASU receives rebates for every case of Coke that the university purchases for franchisees. Coke will pay approximately $300,000 each year, resulting in rebates of at least $3 million after 10 years.

The contract said Coca-Cola would provide $18,000 to purchase merchandise, while an additional $200,000 in beverages would be donated to the university for “special events for students, faculty, and student-athlete use, but not for resale.”

The contract allows Coca-Cola to use college athletics as a sponsorship opportunity. For example, on-campus sporting events must use Powerade branding on mugs, coolers, and equipment. Arizona State University shall provide Coca-Cola with tickets and “hospitality rights” for sporting events free of charge.

The sponsorship contract also states that ASU and Cola must meet annually to develop a plan that addresses “recycling needs on campus.”

“With so many universities trying to reduce their environmental impact, entering into contracts that require them to increase sales of single-use bottled plastic drinks could interfere with campus sustainability goals,” said Grintal.

In response, an ASU spokesperson said the university “has a cross-functional committee that oversees SUP use and waste.”

Edited by Grace Coppertheatt, Wyatt Misko, Logan Stanley, and Pepper Hansen.


Reach out to the reporter at jkabiri@asu.edu and follow him Tweet embed on Twitter.

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jasmine bigSenior Reporter

Yasmine Kabiri is a senior reporter for the state newspaper. She previously worked for The Daily Camera, a local newspaper in Boulder, Colorado.


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