The ‘90s tagline “Always Coca-Cola” takes on a new meaning at Cal State Long Beach, which has been branded a Coke campus through at least 2021 after recent contract negotiations between the university and the soda company.
This designation as a Coke campus means that the university, under the terms of what is colloquially referred to as a “pouring rights agreement,” must exclusively sell Coca-Cola beverages campuswide, notwithstanding some strict and limited exemptions.
In return for their commitment to Coca-Cola, the Forty Niner Shops receives a yearly sponsorship fee of $195,000 (or about $5.21 per student per year) for the extent of the contract, commissions on all vending machine sales and “incentive funding” for every case of product purchased from the bottler past a certain threshold.
The Forty Niner Shops made $76,638 in vending machine commissions last year but did not meet the volume threshold required to receive incentive funding.
Proceeds from Coca-Cola are split between the Forty Niner Shops and the Athletics Department, and on its part the nonprofit uses its share for operating costs such as utility bills and building maintenance as well as donations to the university, according to Kierstin Stickney, the director of marketing and communications for the Forty Niner Shops.
The current contract signed in 2006, obtained by The Daily 49er through the California Public Records Act, was set to expire in August, but was amended last month with a five-year extension, a move which went mostly unannounced to the student body.
The 2006 contract included a clause that would have extended exclusive selling rights to Coca-Cola for a mandatory 11th year without any funding to Forty Niner Shops as a penalty if they did not meet certain sales volume requirements, which they did not.
The extension was in large part negotiated in order to avoid such a situation, according to Stickney.
Janna Cordeiro, a public health consultant working with the Latino Coalition for a Healthy California, which recently received a grant from the California Endowment to write a student handbook on pouring rights agreements, says that it doesn’t make sense that even though the contracts between soda companies and colleges remove competition, the schools are still penalized when the products don’t sell as projected.
Clint Campbell, the CSULB director of contract and facilities, blames the recent financial downturn for the drop in Coca-Cola beverage sales at the university and says the amended contract excludes the university’s volume requirement for the duration of the extension.
But the real reason may lie in the drastic change of heart Americans have had regarding soda, which has been reflected in declining sales.
Although the contract is signed and negotiated between Coca-Cola and the Forty Niner Shops, its terms apply to “all locations on the campus where refreshments are sold, dispensed, served, distributed or sampled,” according to the current contract.
Associated Students, Inc. President Jose Salazar, who also serves as a student board member for Forty Niner Shops, said that when they discussed renewing the contract with Coca-Cola back in the early fall 2015 they decided that the beverage company gave them the best deal that the school could get.
“We asked, ‘What are they going to do to give back to the students?’” Salazar said.
Salazar pointed to the fact that along with a renewal of the pouring rights contract would be a renewal of scholarships provided by Coca-Cola.
“This directly benefits the CSULB students, staff and faculty as those dollars are reinvested and directed back to campus activity,” Stickney said.
Coca-Cola provides philanthropic support to the campus, including multiple $5,000 First Generation Scholarships awarded yearly, according to Stickney.
When asked whether Coca-Cola would continue funding student scholarships if the Forty Niner Shops revoked the current pouring rights agreement with the soda company, she said they would not. [Editor’s Note: Stickney later clarified that she does not definitively know whether or not Coca-Cola would continue funding scholarships without the pouring rights agreement.]
What’s All The Fizz About?
Pouring rights agreements have come under scrutiny from public health advocates who say they promote the consumption of soft drinks. Instead of providing students with more choices, they “create a monopoly” under which universities are put in a position to “push drinks from a single brand,” according to Marion Nestle, author of “Soda Politics: Taking on Big Soda (and Winning)” and a professor in the Department of Nutrition, Food Studies and Public Health at New York University.
The restrictions on the type of beverages that can be bought on campus affect faculty, visitors and students, especially those who rely on a university meal plan.
In a statement to the Daily 49er, the Forty-Niner Shops said that Coca-Cola provides a variety of product choice for CSULB students such as Dasani Water, SmartWater, Vitaminwater, Honest Tea, Monster and Illy.
However, these brands all fall under the umbrella of one corporation and inhibit local brands from entering the market.
Paddy Spence, the chief executive officer of Zevia, a Los Angeles-based soda company that sweetens its drinks with stevia, calls pouring rights agreements the “dirty secret of the beverage industry” and says that they stifle competition.
“College campuses are still really controlled by two big companies, Coke and Pepsi,” Spence said. “When consumers find out about it, they don’t like it. These exclusive contracts get in the way of freedom of choice.”
Zevia has attempted several times to distribute their product to college campuses but have failed due to existing pouring rights agreements. These agreements create what is known as a captive market, in which potential customers are constrained to purchase a good or service from a particular supplier because of a lack of competition.
In 2012, The University of Vermont decided to end its pouring rights contract with Coca-Cola. It also ended bottled water sales through vending, retail, concessions, catering or residential dining and instead installed drinking fountains campuswide, citing the needless amounts of waste created by bottled water.
“This change has been student-driven,” said Gioia Thompson, the director of the Office of Sustainability at UV, in a press release. “Students advocating for an end to sales of bottled water have dedicated many hours over the past four years encouraging fellow students to change their habits and persuading administrators to foster a more sustainable beverage system for the community.”
Last year, San Francisco State University students rebuked an effort by administrators to implement a pouring rights agreement on their campus. Their petition stated that a pouring rights agreement would expose “students to unhealthy soft drinks and corporate advertising and undermine the integrity of public education.”
The students were eventually successful in preventing the contract’s implementation, which included a provision that would endow a soda company-sponsored department chair.
Although no such provision is included in the current contract between the Forty Niner Shops and Coca-Cola, the soda company is allowed to call itself an “official sponsor of the campus” and use its logo alongside university insignia, which critics say gives the impression the university endorses the consumption of Coca-Cola products.
However, the most troubling aspect of the pouring rights agreements aren’t the beverages themselves, according to Cordeiro, but the access the soda company gets to students on campus for the purposes of marketing and advertising.
An Bui, the president of the Real Food Challenge, a student organization at SFSU that led the campaign against the pouring rights agreement, says one of the reasons for the protest at his school was that soda companies are employing similar marketing tactics as the tobacco industry.
Last year, The New York Times uncovered records showing Coca-Cola was funding a nonprofit organization called Global Energy Balance Network, consisting of scientists publishing misleading studies in scientific journals that downplayed the role diet plays in obesity and instead pushing for physical activity as the sole solution.
The newspaper has gone so far as to call soda companies the new Big Tobacco for their tactics aimed at misinforming the public on the health effects of their products, tactics that are diametrically opposed to the values a university is supposed to represent.
Among student comments collected by a tobacco task force put together for CSULB’s Breathe campaign, a number of students said that the prevalence of junk food on campus was a bigger concern to them than tobacco smoke. One student wrote: “I feel more bothered by the barrage of soda advertisements on campus than I do about tobacco.”
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Part of a Bigger Trend
Pouring rights agreements are only one part of a growing trend toward the commercialization of the college environment, according to Cordeiro.
In a 2011 article addressing advertising and marketing practices at colleges, The New York Times pointed out that while companies have been marketing to college students for decades, “what is happening on campuses today is without rival, in terms of commercializing everyday college life.”
According to Salazar, allowing companies to market to students on campus can also present opportunities for students to make connections and market themselves for jobs.
“From a business aspect, it is good for students,” Salazar said. “But if a company’s values are not aligned with the university’s mission, I would speak out against it.”
Yet one of the ways companies permeate the college environment and are able to easily fly under the radar is by hiring students to be what are known in the marketing world as brand ambassadors or brand managers.
“The typical role [of a student brand ambassador] ranges but a lot of them have to do with on-campus activities such as handing out product samples or doing a presentation on the brand and speaking favorably about it,” said Risto Moisio, an associate professor of marketing at CSULB who specializes in consumer behavior.
Red Bull, for instance, hires students as brand managers who canvass the campus and promote the company’s energy drink while handing out freebies, most noticeably during finals week.
According to a previous Red Bull job posting, brand managers at CSULB are expected to “establish and maintain relationships while supporting key university bodies and individuals, including key opinion leaders on campus to keep the brand desirable” and “contribute to the infusion of Red Bull into student life, a ‘lifestyle choice’ to be continued post-university.”
A spokesperson for Red Bull declined to comment saying, “Because we are a privately held company and for competitive reasons, we are not able to discuss marketing strategies including the student brand manager program.”
Red Bull has also sponsored numerous university events such as chariot races during homecoming and a paper airplane competition earlier this month.
These thinly veiled marketing strategies on campuses are employed by companies because college goers are at a prime age to build brand loyalty, which has the potential to carry over into adulthood, creating lifelong customers.
“Because they are college students, they are more likely to have more disposable income after they graduate,” Moisio said. “The sooner you connect with them the better.”
He said that while CSULB is not yet as commercialized as other campuses, it becomes increasingly difficult to put a cap on the commercial presence on campus once the door is opened because it becomes an entrenched part of campus life.
“[Marketers’] strategy is to normalize corporate sponsorship so you don’t notice it anymore,” Cordeiro said. “Students will inevitably associate their college years, typically a positive experience, with a product.”
Buying In Or Selling Out?
The barrage of marketing on college campuses comes at a time when students are becoming less competent when it comes to managing their personal finances, according to a 2015 report by Money Matters on Campus. College students are also saddled with more debt than any other time in the past; the latest numbers available show that the average CSU student graduating in 2014 averaged $16,745 in loan debt.
For college administrators, corporate subsidization of campus activities are typically seen as a necessary evil to overcome budget shortfalls. But critics of these marketing tactics question their educational value and say they promote corporate interests while endangering academic freedom.
Target, another company marketing to college students, has in the past sponsored a Back-To-School-Night at CSULB where they provided buses to shuttle students from dorm buildings to a local retail location for an after-hours shopping social.
Target says that it has been hosting these college shopping events at select universities for more than 15 years.
“These events help Target connect directly with college students. In turn, they provide students with an opportunity to stock up on everything they need – including food, health and beauty supplies, laundry and kitchen essentials, as well as fashion and dorm furnishings,” said Lee Henderson, a representative for Target.
In the book “Educating Citizens: Preparing America’s Undergraduates for Lives of Moral and Civic Responsibility,” authors Anne Colby, Thomas Ehrlich, Elizabeth Beaumont and Jason Stephens explain the ethical concerns regarding these types of commercial activities on college campuses.
“The commercialization of higher education, including corporate sponsorship of faculty and student research, corporate underwriting of programs, advertising on websites, and exclusive ‘pouring rights’ given to soda companies at sports and other events, can provide important financial benefits but also reinforce themes of materialism pervasive in general culture.”
On its part, Coca-Cola has engaged in a bevy of promotional activities at CSULB in the past, including setting up a Coca-Cola AHH Lounge @ ASC! where Coke products were handed out to students and installing a large soda can personalization machine on campus as part of the Share a Coke Campaign last May.
“State schools are especially targeted because they have a lot of first-generation students and students of color who are part of the communities that are drinking the most soda,” Cordeiro said.
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As part of its on-campus marketing strategy, Coca-Cola also hires a CSULB student brand ambassador, though the position is currently vacant pending a new hire, according to Stickney.
The Coca-Cola student brand ambassador from last semester, Maribel Francisco, declined to comment on her role and experience regarding the position.
On a Facebook account associated with the Coca-Cola student brand ambassador —which is used to engage with the campus community — pictures are posted of smiling CSULB students posing in front of a Coca-Cola backdrop holding cans of Coke Zero.
There are posts such as: “CSULB Sororities loves [sic] Diet Coke!”
Coca-Cola did not return a request for comment.
Moisio says that the growing commercial presence in higher education is difficult to recognize because, outside of campus, Americans are already immersed in a culture of advertising. One 2014 study conducted by Media Dynamics, Inc. reported Americans are exposed to 362 ads a day.
Moisio says Americans are as aware of how commercialized their environment has become as fish are of water.
Ultimately, he says that as a society we have to have a conversation about what we consider sacred territory, free from commercialization.
“It’s a big ethical issue: What’s not for sale?”