Davis, Calif. – After a year-long evaluation, UC Davis has finalized a new preferred supplier contract with PepsiCo, extending the university's long-standing partnership with the fourth-largest beverage distributor in the world. Over the life of the new agreement, UC Davis will receive more than $10 million to fund a variety of student programs, sustainability, health and wellness initiatives, and to offset operating costs for retail locations. The agreement will increase annual funding to UC Davis by roughly 20% compared with the prior contract. PepsiCo will also provide equipment (e.g., vending machines, dispensers) and stocking services to the university.

As the university’s preferred supplier, PepsiCo will have the right to offer 85% of beverages for sale at UC Davis- and UC Davis Health-operated venues, including dining halls, athletics venues, campus stores, hospital eateries, vending machines and other retail outlets. The Coffee House and CoHo South Cafe, which are operated by Associated Students of UC Davis (ASUCD), have chosen not to participate in the contract. 

Within weeks of operating under the new contract, roughly 80% of PepsiCo beverages sold at UC Davis will be packaged in aluminum, glass, cartons or other non-plastic containers. The only PepsiCo products currently unavailable in non-plastic packaging – Naked Juice, Muscle Milk, Gatorade and Pure Leaf Tea – will be available in sustainable packaging by 2030. These swift plans to phase out of single-use plastic beverage containers align with UC’s Sustainability Practices policy. The partnership with PepsiCo also helps the university gather data on sustainability metrics and efforts, such as the volume of plastic containers being purchased.

The previous contract guaranteed 90% of the product sales to Pepsi. With more flexibility in the new contract, 15% of beverages can be sourced by the university from non-Pepsi suppliers, expanding choices for the campus community and enabling small or local distributors access to the UC Davis market.  

PepsiCo provides dozens of products that are not traditional soda, such as Aquafina, Bubly, Pure Leaf Tea and Starbucks bottled cold coffee. The PepsiCo contract enables UC Davis to prioritize healthy beverage choices by permitting retail establishments to control product placement, with the ability to dedicate prime shelf space to the healthiest options. Additionally, UC Davis can implement pricing measures to lower the cost of healthy beverages and make sugary beverages more expensive. Shelf placement and pricing have both proven effective in shifting consumer behavior toward healthier choices. 

"Pepsi’s commitment to UC Davis, as a preferred partner, will support campus initiatives that impact students, staff, fans and operations across our university.  Throughout negotiations they’ve been responsive to the priorities of our campus, and we’ve developed a road map that supports our operations in achieving shared goals around health and sustainability," said CJ Caudle, Sourcing Manager, University Preferred Partnership Program (UP3).

The new contract will be in place through 2034. 

The PepsiCo contract leveraged a public bid event performed by UC Berkeley and was negotiated by UP3, a program within UC Davis Procurement that establishes preferred business partnerships with organizations. Learn more at supplychain.ucdavis.edu/up3.