Products provided by PepsiCo will now be the the only beverages in vending machines and drink fountains at all park and recreation facilities in Dallas.
That's after the Dallas City Council approved a 10-year beverage services contract with PepsiCo during its Wednesday meeting.
The agreement applies to brands associated with Pepsi's product portfolio, like Gatorade, and products that have deals with PepsiCo like Dr Pepper.
The contract also gives Pepsi products a preferred pricing rate at all park and recreation facilities not operated under an existing management agreement, such as the Dallas Zoo.
Council Member Paul Ridley raised a concern about whether the PepsiCo contract would deter other beverage competitors from advertising with the city.
"I think we need to go into this with our eyes open that this isn't just a beverage services contract, but it may limit our ability to attract other vendors who may want to invest in a park facility in exchange for putting their name on it," Ridley said.
But Park and Recreation Director John Jenkins said the city had not been successful at securing sponsorships from Coca-Cola or Dr. Pepper in recent years.
Jenkins said there was a "huge difference" between the bids offered by Pepsi versus its competitors.
"If they were so interested and truly wanted to be the sponsors, I think they would have made a more competitive bid," Jenkins said.
The agreement does not completely lock in Dallas with Pepsi — the contract comes with a 30-day notice "termination for convenience" clause.
Deputy Mayor Pro Tem Gay Donnell Willis said she was glad that the contract would not lock in the city for a long period of time.
"I'm willing to take the bird in the hand while we work out a bigger picture on how we can really go big on sponsorships for our rec facilities," Donnell Willis said.
Dallas' Park and Recreation Board authorized a three-year consultancy service contract with The Superlative Group to come up with sponsorship opportunities in November 2022.
The contract is expected to generate around $1 million over the 10-year term. The Superlative Group will receive 15% commission with 10% for the city's Park Endowment.
Originally the commission for The Superlative Group was 25%, but it was negotiated down. Ryan O'Connor, Park and Recreation Deputy Director, said that commission percentage was only for the PepsiCo contract, but added that he expects to have a similar negotiation for future consulting opportunities.
Council Member Paul Ridley raised a concern about whether the PepsiCo contract would deter other beverage competitors from advertising with the city.
"I think we need to go into this with our eyes open that this isn't just a beverage services contract, but it may limit our ability to attract other vendors who may want to invest in a park facility in exchange for putting their name on it," Ridley said.
But Park and Recreation Director John Jenkins said the city had not been successful at securing sponsorships from Coca-Cola or Dr Pepper in recent years.
Jenkins said there was a "huge difference" between the bids offered by Pepsi versus its competitors.
"If they were so interested and truly wanted to be the sponsors, I think they would have made a more competitive bid," Jenkins said.
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