Iowa State University

Inside Iowa State
March 31, 2000

Beverage contract decision on hold

For now food merger is first priority

by Anne Krapfl
Iowa State will delay until at least next fall a decision on whether to seek a single soft drink contract for the entire campus. Using information provided by a food and beverage consultant earlier this month, the student/employee committee studying the issue will continue its work for several more months, said Warren Madden, vice president for business and finance.

"The consensus of the committee at this point is that if there's a potential for several hundred thousand dollars of additional revenue each year, we ought to explore it," he said. Specifically, committee members will visit with potential suppliers about what level of profit Iowa State could expect. They also will seek more input from campus groups.

If Iowa State sought a single contract, key pop-consuming units that would be included are the Memorial Union's food operation, the athletic department (concessions at Jack Trice Stadium), Iowa State Center (catering and concessions), Veenker golf course, vending service on campus (for which the Memorial Union currently contracts) and the residence department.

Convention Sports & Leisure, the university's consultant, has estimated Iowa State could expect an additional $300,000 to $700,000 annually from a single, campus beverage agreement.

Factors that help Iowa State include a large residence system, high number of events at the Iowa State Center complex, student body's openness to an exclusive arrangement and the potential for higher volume (consultants said Iowa State students were about average in a five-school comparison of annual consumption of soft drinks).

Negative factors for ISU include lots of nearby, off-campus competition (convenience and grocery stores), a local low- price market, some faculty concern about an exclusive contract, and the absence of a centralized contract system now.

Even if the committee agrees to seek formal bids from suppliers, Madden said Iowa State would not ask for total exclusivity in a contract. For example, he said convenience stores on campus would continue to sell lots of soft drink brands, and employees could stock office refrigerators with their brands of choice. National beverage contracts tied to food franchises in the Memorial Union food court also would be honored.

"We aren't going to have pop police on campus," he said. "Students and employees have lots of freedom in what they carry onto campus, and that's not going to change."

Madden said several other factors contributed to the study committee's decision to delay a decision. Many of the current beverage contracts on campus don't expire for one to four years, so a later decision might be easier to implement. Ogden Allied's management contract at the Iowa State Center expires next year.

Madden also said a plan for merging Iowa State's two food operations -- at the Memorial Union and residence department -- is the first priority at this time. University leaders agree a merger is a good choice; whether to create a new internal unit or contract with a national food service provider is what's being weighed.

"These decisions involve a lot of the same people, so we needed to decide how many of these we want in play at once," he said. "We'd like to get the food service merger off the table first."

Madden and vice president for student affairs Tom Hill hope to make their food service recommendation to President Martin Jischke by June 30.

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