Los Angeles, CA — The Los Angeles Unified School District has awarded one of the largest – and most competitive — beverage contracts in the country to Pepsi Bottling Group (PBG).
The contract will raise $26 million over five years for the Unified School District; in exchange, PBG will sell and service the schools directly. As part of the bid, PBG agreed to subcontract out the vending service for 25% of the schools. PBG will service the student stores at 100% of the schools and provide the vending service at the other 75% of schools within the district.
Underscoring the contract deliberations was a 2002 “Healthy Beverage” resolution that attempted to fight youth obesity by eliminating sodas and unhealthy snacks from on-campus vending. The new contract is, in many ways, an on-campus endorsement of the juice and water products of the company that won the bid.
As a result, Pepsi will have the opportunity to introduce its students to the following product lines: Dole 100 percent grapefruit, orange and apple juices, Gatorade Strawberry Ice and Lime Ice, and Aquafina’s sparkling, flavored, and plain offerings.
More than 10 different companies submitted bids to the Unified School District, including Coca-Cola, Pepsi’s chief competitor, and Nestle Waters, the largest water company in the country.
The contract includes a $1.8 million annual signing bonus for the Unified School District, which will be distributed throughout the school system for athletic and extracurricular activities.