CHICAGO -- No Coke. Pepsi.
CHICAGO -- No Coke. Pepsi.
PepsiAmericas Inc., a Schaumburg-based Pepsi bottler, has been tapped to supply soft drinks for vending machines at most state government facilities, four state universities and at the Illinois State Fair for the next decade. The tentative 10-year deal, which would guarantee state coffers and participating colleges a minimum of $14.4 million, was announced Friday by the Illinois Department of Revenue.
The Chicago-area Pepsi distributor edged out a Coca-Cola rival for the opportunity to provide vending-machine drinks and "pouring services" at the Illinois sites, Revenue Department spokesman Mike Klemens said.
He said the arrangement does not establish Pepsi as the official state beverage. Still, Klemens acknowledged that may be little solace to state employees or college students who prefer Coke.
"Will some people be mad? Probably," Klemens said. "But it's no different than the way it is now. You go into a restaurant and ask for a Diet Coke. A waitress will say, 'Is Pepsi OK?'"
Illinois would get a 45 percent to 50 percent commission on sales, according to an informational draft provided by the state revenue agency. Although the state and the four universities would be guaranteed $14.4 million over the contract period, PepsiAmericas has estimated they would actually receive $64.2 million over 10 years, or $6.4 million per year, from sales.
The deal would earmark for Pepsi products nearly 2,400 vending machines in state facilities across Illinois, including parks, interstate rest stops, prisons and office buildings such as the James R. Thompson Center in Chicago.
The Statehouse and other buildings in Springfield's Capitol Complex are not part of the pending contract. They are run by the Illinois Secretary of State's Office, which has its own vending arrangements.
The participating academic institutions are the University of Illinois (Champaign-Urbana, Springfield and Chicago campuses) and Northeastern Illinois University in Chicago, Klemens said.
Currently, the state receives a little more than $400,000 annually under a patchwork of vending contracts for public sites, the revenue agency said. Klemens said a beginning date for the more lucrative, centralized agreement with PepsiAmericas has not been determined, pending the signing of a contract.
PepsiAmericas spokeswoman Mary Viola declined comment Friday on the company's winning bid. She said PepsiAmericas is the second-largest Pepsi bottler in the world, with annual revenues of $4 billion. The line of products includes Mountain Dew, Sierra Mist, Mug Root Beer and Aquafina bottled water.
Kevin Morris, a spokesman for the Coca-Cola Bottling Company of Chicago, which also sought the state contract, expressed disappointment.
"We certainly hope our consumers will continue to bring our wonderful refreshments with them" to work, he said. "They should have no problem finding Coca-Cola products."
State officials evaluated the supplier proposals earlier this year. The contract with PepsiAmericas will be the first statewide beverage deal in the nation, the Illinois revenue agency said. Some U.S. cities have exclusive arrangements with suppliers, however.
Blagojevich's administration had hired Team Services LLC, a Maryland-based consultant with ties to the governor, to develop state sponsorship deals. Klemens said the firm will not receive a percentage of the soda-vending revenues.
Mike Ramsey of GateHouse News Service can be reached at (312) 857-2323 or firstname.lastname@example.org.