Through ‘pouring rights’ contracts at universities, Coke and Pepsi spur sales of unhealthy drinks, study finds

Coca-Cola and Pepsi promote their products through exclusive marketing agreements called “pouring rights” contracts from 124 or 87 percent of the 143 public universities in the United States with at least 20,000 students, according to new research from the Center for Science in the Public Interest or CSPI and the Johns Hopkins Bloomberg School of Public Health. 

The study looked at 38 contracts that had enough information to assess their overall value to the universities.

Those contracts provided universities with an average of about $900,000 a year, with one contract valued as high as $2.9 million annually. Among those 38 contracts, on average, nearly a third of a contract’s estimated total revenue came from payments tied to sales volume, for example, incentive-based payments. 

Nearly all of the 124 contracts – 95 percent – included at least one type of incentive-based payment. These included commissions, rebates, or payments triggered once a minimum amount of product is sold.

One in seven contracts, 15 percent, provided schools with higher per-unit incentives for selling soft drinks compared to bottled water.

The contracts outlined various ways the university would be required to partner in the marketing of beverages. For example, most contracts granted the company exclusive rights to use the university’s marks, for example, name, logos, and mascots, in beverage promotion activities and let the company to refer to its product as the “official beverage” of the university. 

Other recent studies, also by researchers from CSPI and Johns Hopkins University, show how Coca-Cola and Pepsi market sugar-sweetened beverages to youth through university pouring rights contracts and how these contracts establish “campus ambassador” positions for students to market sugar-sweetened beverages to their peers. 

“There is a growing movement to remove sugary drink marketing from college campuses,” said Eva Greenthal, senior science policy associate at CSPI and lead author of the study. “Students want to see less marketing on their campuses – especially for unhealthy products.”

Students are also pushing their administrations to pursue strong commitments to sustainability, including by removing single-use plastics from campus, Greenthal said.

“Schools that are locked into decade-long contracts with bottled beverage companies will struggle to meet those commitments,” she said. 

For more information on the soda wars, see MuckRock’s “The Biggest College Rivalry in America: Coke Versus Pepsi.” MuckRock is an organization that analyses and shares government documents.