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Pasco schools end 15-year exclusive beverage contract experiment

When the district runs its own vending operation, it won’t be limited by brands, allowing a wider assortment of drinks. The district’s first exclusive beverage contract was with Pepsi.

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When the district runs its own vending operation, it won’t be limited by brands, allowing a wider assortment of drinks. The district’s first exclusive beverage contract was with Pepsi.

LAND O'LAKES — Coke is not it for Pasco County schools anymore.

The School District has decided to let its exclusive beverage contract with Coca-Cola expire in June, ending a 15-year experiment that gave the drinks vendor sole access to thirsty Pasco students in exchange for some extra cash for schools.

The once-lucrative deal, which began with Pepsi, poured $2 million into schools during its first two years. Some campuses netted close to $25,000 a year to support athletics, field trips and teaching supplies.

In recent years, though, federal nutrition guidelines limited the drinks that schools could sell. And the district felt the pinch.

It sold 1,103 cases of Coke products through vending machines in March, compared to an average monthly sales of 4,555 cases of Pepsi products in 2003. Its estimated income from the Coke five-year contract was $1.4 million.

It missed the mark by more than half.

"We decided at this point in time it wasn't lucrative to put another bid on the street for an exclusive beverage contract," said Julie Hedine, director of food and nutrition services.

Instead, the district will run its own vending program, selling drinks from an assortment of bottlers. It plans to survey students on what brands and flavors are most popular.

"We'll have a greater variety for students," Hedine said. "By us managing the vending program, we can be sure everything in the machines will be in compliance with the standards."

Those guidelines limit drink sizes, fat content and calories.

Nutrition rules were not at the forefront when Pasco first sold "pouring rights" to Pepsi.

"As a society, we were just at the beginning of dealing with that," said Chip Wichmanowski, who oversaw the deal.

That's not to say that soda sales to students didn't raise concerns. Critics complained about schools giving kids access to "liquid candy," not to mention selling their attention to a soda giant eager to build market share.

Worries rose along with consumption.

The district did set some stipulations on products, Wichmanowski said. But the primary goal was financial.

Over time, other districts around the country with similar arrangements started backing away from them.

Madison, Wis., schools, for instance, were the first to create an exclusive deal and also one of the first not to renew, under heavy pressure from nutrition experts and parents. The district decided to put healthier items in front of students.

Pasco schools slowly moved in that direction but retained exclusivity with Pepsi. That contract ended at about the same time that beverage makers entered an agreement with the Bill Clinton Foundation and the American Heart Association to voluntarily remove full-calorie sugared soft drinks from schools.

"The biggest news was really around our commitment to changing the beverage landscape in schools," said Chris Gindlesperger, spokesman for the American Beverage Association.

The changes did lead to major contract renegotiations with school systems, he observed.

In Pasco, the new rules made a deal with Pepsi not feasible. Instead of dropping the concept, though, the district turned to Coca-Cola for a less profitable deal that included more low-calorie drinks.

In 2010, the district started its own vending program for snacks, putting both refrigerated and nonrefrigerated machines containing healthy food choices in every middle and high school.

It's that program that will take over drink selections when the Coke deal ends.

"Since we're self-operated, we will be able to offer a greater variety of products," Hedine said, explaining that smaller brands of juice could be sold along with choices from both Pepsi, Coca-Cola and other major labels.

Schools still will be able to generate additional funds through sales, she said. The Food and Nutrition Services department simply will act as the provider.

Booster clubs will be able to buy drinks from the cheapest place, rather than be bound by the exclusivity arrangement. That's something they have wanted for years, Hedine said.

On the downside, though, the branded refrigerated coolers they use will be removed, and schools will have to find another way to keep drinks cold.

New vending machines are set to begin going to the schools in July. There won't be as many as in the past, but Hedine said the district will restock them more frequently.

"It's the end of an era," Wichmanowski said. "But it's not only our era. It's the soft drink era as well."

Jeffrey S. Solochek can be reached at jsolochek@tampabay.com.

Pasco schools end 15-year exclusive beverage contract experiment 04/25/14 [Last modified: Friday, April 25, 2014 7:15pm]

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