UVM Gets Coked Up

The University of Vermont has just received its first payment from a 10-year agreement formed with Coca-Cola that was finalized last year. This agreement with Coca-Cola gives the company “near exclusive” rights to beverages that will be served and sold on campus. The agreement will result in a total payment of $4.3 million spread over a ten-year period until 2012. Much of this money that UVM receives will go to funding financial aid, student programs and athletics. The deal came down between the two beverage king-pins, Coca-Cola and Pepsi. Coke won over offering $4.3 million while Pepsi offered $4 million. “Money was the determining factor in choosing Coke as a sponsor,” said David Martin, director of UVM’s purchasing department. “We’ve made just over one million in the last ten years.”The Coca-Cola product has been around since 1887 and as of 2003 have nearly 300 beverages in their portfolio. Some of the beverages seen more often around UVM owned by Coke are Dasani, Powerade, Minute Maid and Simply Orange.This deal will result in only Coke product beverage vending machines, exclusive beverage provided in dining facilities operated by Sodexho, and Coke products will occupy 80% of the shelf space in campus convenience stores and the University Bookstore. Sodexho will decide what the remaining 20% will consist of on the shelves. The deal doesn’t apply to fresh brewed coffee and tea, cider, milk, fresh smoothies and fresh squeezed juices. In 2002 Coke’s gross profit was $12.45 billion which was up 8% from 2001. Their water products grew globally 68% as opposed to 8% growth average for the rest of the industry. Their juices grew 21% nationally compared to the 2% growth of the industry. Coke’s assets now exceed $24 billion globally. “Overall, we were pleased with our results in 2002 in the face of a difficult macroeconomic environment,” said Doug Daft, chairman and chief executive officer of Coca-Cola. “And we are excited about how we will execute in 2003 overall and in all of our new or existing partnerships.” Other results in the agreement will result in Coke sponsorship acknowledgement in athletic programs and exclusive beverage sponsorship acknowledgement in UVM athletic facilities. There will be no other beverage trademarks displayed or served on campus and university sponsored events such as Pepsi. “Coke already seems to have such a tight grasp on the student body of UVM already from a marketing standpoint,” said Anna Sciortino. “The deal is the kind of thing that proves how Coke manages to become such a huge corporation that grows the way they do every year. It seems like they have their finger in everyone’s pie.”Other Coke partnerships include Simon Property groups, Jack in the Box, Disney, Six Flags, Burger King, The National Hockey League, The National Basketball League and the naming rights of the Houston Astros baseball stadium, Minute Maid Park.