Study finds that contracts incentivizing increased sales of unhealthy beverages are nearly ubiquitous at large, public U.S. universities

New research from CSPI and Johns Hopkins Bloomberg School of Public Health

New research from the Center for Science in the Public Interest and the Johns Hopkins Bloomberg School of Public Health exposes the financial relationships that Coca-Cola and Pepsi have with higher education institutions. These companies’ signature products are sugar-sweetened beverages, the consumption of which has been linked to various health harms including increased risk of heart disease, diabetes, dental disease, and obesity.

Coca-Cola and Pepsi promote their products through exclusive marketing agreements with venues and institutions, known as “pouring rights” contracts. This new study, published in the Journal of American College Health, obtained pouring rights contracts from 124 (87 percent) of the 143 public universities in the United States with at least 20,000 students.

The study found that 38 complete contracts had sufficient information to assess their overall value to the universities. Those contracts provided universities with an average of around $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 (i.e., 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 some 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 (i.e., name, logos, and mascots) in beverage promotion activities and allowed the company to refer to its product as the “official beverage” of the university.

Other recent studies, also authored by researchers from CSPI and Johns Hopkins University, exposed 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. Students want to see less marketing on their campuses—especially for unhealthy products,” said Eva Greenthal, senior science policy associate at CSPI and lead author of the study. “Students are also pushing their administrations to pursue strong commitments to sustainability, including by removing single-use plastics from campus. Schools that are locked into decade-long contracts with bottled beverage companies will struggle to meet those commitments.”

The study acknowledges that while universities have an opportunity to shift habits and norms surrounding sugary drinks by opting out of pouring rights contracts, many universities are facing financial hardships due to COVID-19 disruptions, declining enrollment, and declining support from state governments, making them increasingly reliant on corporate funding.