Board of Regents approves Pepsi contract

PepsiCo Inc. will now be the official beverage provider for Sam Houston State University after a seven year contract for $2.77 million was approved by the Board of Regents last week. This is the first time the university has signed a contract with a drink provider.

University Treasurer David Verghese said that although SHSU will no longer supply any Coca-Cola products, Pepsi will provide their equivalents, plus a larger selection of juices and teas.

“I think if you look at that aspect of the product portfolio, Pepsi is very strong,” Verghese said. “If you look at the carbonated side, they’ve got one for one. Where there’s Coke, there’s Pepsi. If you look at things like juices, Pepsi has Sobe, Lipton, Naked juices, they’ve got a huge portfolio… I think there will be more of this change or transition to healthier and less carbonated and less sugary type of products”

In addition, students could potentially have greater access to Starbucks coffee, according to Verghese.

“They’ve also got distribution capabilities of Starbucks products,” Verghese said. “I think for the first time we might actually see dedicated vending machines that offer chilled Starbucks products.”

According to Verghese, in addition to the distribution of drinks, Pepsi will also provide donations and sponsorships for SHSU.

“They’re going to sponsor some things around the athletic side and some summer campus and things like that,” Verghese said. “They put in place things like a recycling initiative, [too]. My hope is that one day we can also have Pepsi participate in things like campus-wide recruiting fairs and things like that so we can see it more as a partnership as opposed to being tied to a particular company.”

Verghese said the university talked to other universities who had also made the switch to Pepsi, Texas A&M in particular.
“Really the feedback was after they [A&M] made the transition, they actually saw that shift… from carbonated to non-carbonated [drinks], and second is overall, they did see their volumes grow,” Verghese said. “That’s kind of the experience we’re hoping to have here at Sam.”

Although the contract does not list the dollar amount that other companies’ bid, Verghese said that Pepsi’s bid was high enough to make a meaningful difference.

“Our goal is to make it as least disruptive to the students, the faculty, the staff and that’s why we went with an open process,” Verghese said. “We had all of the major companies participate and it’s also why we made sure to include a product line like Dr.Pepper in our proposal to strengthen what we have to offer here for our students.”


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