Soon Delta State University will see a new product all throughout campus pending approval from the Board of Trustees of State Institutions of Higher Learning.
After a bidding process that began in the fall, DSU has accepted a bid from PepsiCo that will bring in close to $900,000 to the university.
Delta State expects to bring the item to the IHL board at its March meeting.
The current contract in place with Nehi Bottling Company was for 10 years and will run out this spring, which caused the new bidding process.
DSU Chief Financial Officer Jamie Rutledge created a task force.
PepsiCo is one of the world’s leading food and beverage companies with over $63 billion in net revenue in 2016 and a global portfolio of diverse and beloved brands.
The task force recommended PepsiCo following a detailed analysis of corporate options.
The recommendation letter said, “We feel that PepsiCo presented a commitment to bring first class service, product and equipment innovation, program support and a strong significant and sustainable financial package.”
This is a big move for the university and for Cleveland because no longer will DSU be partnering with local company Nehi Bottling.
According to Delta State University President Bill LaForge, "This is all business. As a public university with taxpayer dollars we have to do what's right for DSU. This decision is best in a financial way and a benefit way. The Sledge's and the Nehi folks are great friends and still are. What I'm hoping is the community will understand the significance of this business arrangement and as the leaders of the university we would have been foolhardy to not select the vender due to the significant increase it brings to Delta State."
LaForge said the university's relationship with the community is incredibly important.
"Our unwritten rule, but very strong feeling, is we will hire and purchase locally every time if the business arrangement and offer is equal or anywhere near equal. The difference in this situation was so drastic we really didn’t have a choice. My board (IHL) would not approve the lower bid.
"If this had been a close call or within range we would select locally every time and we do that when we can.
“These are big corporations and PepsiCo and Coca-Cola can come in and have these huge presentations and they did. We want to make sure we don’t have the wool pulled over our eyes, and we didn’t. We do what's best for the university and the students," he said.
The profits made from this contract once approved will go into the operating budget, which the university badly needs according to LaForge.
"Some will be expenses in certain areas like athletics. Our athletic department will enjoy a new and unique relationship with Gatorade and have products available to them such as coolers and water bottles. Ronnie Meyers is thrilled by what it will mean for athletics.
“We will also see cost savings. Pepsi is going to put card reader machines throughout the campus for all their products. It's convenient, easy, and accessible for students, faculty, staff, and visitors to purchase a much wider variety of products like water, juices, iced coffee, Gatorade, and all various sodas," he said.
"They’ve given a guarantee of a commission level that's three times higher than what we get now. We're going to have events and activities given to the university for student events.
“Our VP of student affairs is excited about that. PepsiCo will come to campus and put on events on the quad for our students, which takes the cost off of our books.
“To crown all of this, Pepsi is going on top of everything I just said and they will buy advertisements that will go up at sports venues and all around campus. The revenue to the school is great — the entire budget is not restricted," said LaForge.
Again, all of this is pending approval from IHL at the March meeting. It could not be approved sooner because the contract and paperwork was not ready.
LaForge felt it important to inform the community sooner than March.
"We wanted to get ahead of this and let people know and be forthright. In the conversation with the Sledge's we talked about a transition point and our goal is April 1. Before April 1, we'll have a week of spring break and that will be a good time for machines to be removed and replaced. Pepsi is on go whenever we call them for installation. I expect it to be a very smooth transition and I think it’ll be wonderful opportunity for the students," he said.
Information on the bids will be available at a later date.
This was a unanimous vote by the committee.
"They did a wonderful job and many of them said they individually personally like Coke but they saw this as the best business deal for Delta State. At the end of the day, if we couldn’t do local, the decision was what was best for the university."
According to the university's press release, Pepsi will provide, varied product selections with a beverage portfolio that comprises 22 brands and includes many healthy lifestyle options and protein beverages; A premier partnership with Gatorade and DSU Athletics that offers support, equipment and educational resources; Student engagement by providing multiple promotional campus events at no cost to the university; Partnership with a company that has extensive experience and a strong national presence in 800+ colleges and universities.