Agenda Item
Meeting Date: 6/23/2020 - 4:00 PM
Category: Adoption of Consent Agenda
Type: Action
Subject: Board Approval for a Ten-Year Beverage Contract with Pepsi
End Statements:
End Statement V Financial Well-Being
Financial Well-Being
Enclosure: Attachment #1: Pepsi Financials
File Attachment:
Pepsi Financials 6-23-2020.pdf.pdf
Summary : Due to the expiration of the Pepsi contract in June 2020, Strategic Sourcing with Nutrition Services posted a Beverage Pouring Rights RFP on February 24, 2020 with proposals due May 15, 2020. Pepsi and Coca-Cola both provided proposals. After review of both proposals, the recommendation is to award a ten-year contract with Pepsi.

Financial Impact:

● Up Front Fee: Within 60 days of signing the contract, DCSD will receive a one-time amount of $60,000 from Pepsi.
● Annual Sponsorship: Additionally, DCSD will receive an annual sponsorship check from Pepsi for $100,000 which increases annually per the attached spreadsheet for a 10-year total of $1,070,000.
● Commissions: Pepsi will provide 25% of the revenue received from the Pepsi vending machines back to the District. These funds go directly back to the school in which the vending machines are placed. Historically, this amount has surpassed $67,000 a year and is expected to increase year over year based on product purchased from the vending machines.
● Rebates: Rebates for product purchased will be provided based on volume purchased. Based on previous annual volumes, this amount can potentially be $57,000.
● Gatorade Sideline Kits: Pepsi will provide Gatorade Sideline Kits each year to Athletics which will total $750 a year or $7,500 over the ten-year term.
● Sustainability Fund: Pepsi will provide $1,500 worth of recycling trash cans next to the Pepsi vending machines per year. This equates to $1,500 worth of sustainability items per year ($15,000 over the ten-year term).
● Free product: Pepsi will provide 425 cases of free Pepsi products annually to be used for school and District events. This equates to $1,500 worth of product per year ($15,000 over the ten-year term).
The total financial support for the District could exceed $2.6 Million depending on the volume purchased.

Annual Spend: Total annual spend for Pepsi products is estimated to be approximately $900,000 per year based upon current sales data for a total contract spend between $9M and $10M.
Recommendation: That the Board of Education approve a new ten-year agreement with Pepsi for beverage purchases under adoption of Consent Agenda.
Recommended By:
Signed By:
Colleen Doan - Director of Budget
Signed By:
Dr. Thomas Tucker - Superintendent
Vote Results:

Original Motion
Member Christina Ciancio-Schor Moved, Member Krista Holtzmann seconded to approve the Original motion 'That the Board of Education approve a new ten-year agreement with Pepsi for beverage purchases under adoption of Consent Agenda.'. Upon a Roll-Call Vote being taken, the vote was: Aye: 7 Nay: 0.
The motion Carried 7 - 0