May 11, 2001
May 18, 2001
Campus rejects one-brand beverage concept
by Anne Krapfl
Iowa State will not be a one-pop place. A university committee studying
the possibility of an exclusive beverage contract for campus (including key
units such as athletics, campus vending, the Memorial Union and campus'
largest volume user, the residence department) decided May 8 to reject two
proposals for exclusive beverage service. Instead the group recommends that
the university pursue service contracts for the core campus with more than a
single company. Committee members represent all corners of campus, including
students, faculty and staff.
Vice president for business and finance Warren Madden, who appointed the
19-member committee and has accepted its recommendation, said the additional
income to Iowa State for signing an exclusive contract was not as high as
originally anticipated. He said committee members also expressed concern
about the marketing and campus advertising obligations to the university
that are part of an exclusive arrangement.
"We have tested the marketplace with an RFP (request for proposal).
We've gathered the data and it tells us that continuing with our current
arrangements is the way to go," Madden said.
This spring, the committee reviewed two campus beverage service proposals
submitted by The Dr. Pepper/Seven Up Bottling Group and Coca-Cola. Their
proposals could have brought Iowa State $180,000 to $325,000, respectively,
in unrestricted cash every year of a 10-year contract. The proposals also
suggested additional, though not guaranteed, commission revenues to Iowa
State, if soda and bottled water consumption exceeded pre-determined levels.
Madden noted that the proposed revenues were at the low end of what a
consultant predicted for Iowa State a year ago. Staff at Convention Sports
& Leisure, Minneapolis, said they believed an exclusive beverage
contract would be worth $300,000 to $700,000 a year to the
Both proposals included "perks" for the bidding companies -- such
things as premium seat tickets to all home Cyclone football, men's
basketball and women's basketball games, season passes to Veenker golf
course, and tickets to events at the Iowa State Center. The Coke proposal
also asked for royalty-free use of all ISU logos, the center ad in programs
at all home athletic contests and signs in all campus athletic venues (for
example, scoreboard, team chair backs, scorer's table).
Madden said neither of the proposals was acceptable to the committee,
primarily because the revenues were not high. The committee's decision then
became whether to reject the proposals or begin to negotiate with Dr. Pepper
group or Coca Cola representatives to get to a service contract that was
acceptable to Iowa State. Committee chair and ISU purchasing manager Arlo
Meyer said last fall that soliciting beverage proposals did not obligate the
university to sign an exclusive contract.
"We knew companies like this throw everything but the kitchen sink
into their proposals. That doesn't mean they expect all that," Madden
But, in the end, the committee opted to reject both proposals.
A third national player, Pepsi, did not submit a proposal to Iowa State.
Madden said Pepsi representatives have expressed interest in being one of
several beverage providers to Iowa State. The Dr. Pepper group's proposal
this spring included the option of being one of several providers.
One group of faculty earlier had gone on record opposing any exclusive
beverage contract for Iowa State. At a joint meeting May 4, the Faculty
Senate Resource Policies and Allocations Council and the Committee on
University Planning and Budgeting passed a motion recommending that the
university stop its efforts to land a campus beverage "monopoly"
and develop a beverage program based on low prices and a wide variety of
brands and types of drinks.
Lee Fletcher, a faculty appointee to the beverage committee and a member of
the faculty senate council, wrote the motion. Fletcher said he opposes the
commercialization of campus and the notion of making money by selling
beverages at inflated prices to a "captive" campus audience. He
said he also believes the companies' demands for things such as football
skybox seats and sports camp attendance for children is unethical, even
though they are typical provisions in many schools' beverage
Current campus beverage contracts expire between June 2002 and 2005 and
will be honored, Madden said. In the next few months, purchasing officers
will write guidelines for proposals from multiple providers for beverage
service on the core campus. He noted that athletic department contracts for
the football stadium and Hilton Coliseum don't expire until 2004 and 2005,
respectively, and probably will continue to be handled separately.
"We hope to get some more competitive proposals in this process,"
A decision on multiple beverage providers needs to be made by next June.
The beverage committee will assist with the review process, Madden
Ames, Iowa 50011, (515) 294-4111
Published by: University Relations,
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