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Regents approve contracts with food and beverage vendors

A sandwich on a plate next to a glass of cola

April 11, 2008

The Board of Regents on April 11 approved four long-term contracts with vendors for food and beverage service on University of Minnesota campuses.

The agreements will allow the University to maximize financial benefits across campuses and are aligned with strategic and operational goals.

"These new contracts are designed to enhance healthy food and beverage options, sustainability, and customer service," said Leslie Bowman, director of University Dining Services contract administration. "To maximize the benefits for our students and the entire University system, we've used an inclusive, competitive, single-enterprise approach to these contracts."

The contracts include:

  • A new 10-year agreement with Coca-Cola covering all of the U's campuses, worth an estimated $38 million to the University. Part of the proceeds will support the U's students and academic mission, and the package includes a guarantee of $750,000 in yearly commissions, an athletics sponsorship, and money designated for initiatives.
  • A new 12-year agreement with ARAMARK for dining services on the Twin Cities campus, worth an estimated $96 million to the University.
  • A new 10-year contract with Sodexo to provide dining services on the Crookston and Morris campuses, worth an estimated $7 million to the U.
  • A 10-year contract with Taher, a Minnesota-based company, to provide non-beverage vending service on the Morris, Rochester, and Twin Cities campuses, worth an estimated $2.7 million to the U.

The agreements provide ARAMARK and Coca-Cola the right to provide food and beverage service at the new TCF Bank Stadium, which is scheduled to open in September 2009.

The estimated total value of the combined contracts with ARAMARK, Coca-Cola, Sodexo, and Taher is $696 million. The beverage and non-beverage vending contracts will take effect on July 1, 2008, and can be extended by the University to 16 years.

The announcement culminates a lengthy RFP process that began nearly two years ago. The process was highly consultative, involving more than 120 University of Minnesota students, faculty, and staff. Seven companies made proposals seeking to be vendors for various aspects of the U's beverage and food operations.

Corporate responsibility, sustainability

One of the priorities for the University was to include strict standards of accountability in the new agreements. The contracts include an annual business review as well as periodic performance reviews to ensure that the agreements are meeting the University's needs.

As well, all of the companies involved have signed corporate responsibility statements committing them to taking steps to ensure that their actions--both in Minnesota and worldwide--make a positive contribution to human rights, labor rights, and environmental protection. These steps will be monitored and evaluated in the U's annual business reviews.

In particular, Coca-Cola has committed to advancing the goals set forth in the United Nations Global Compact, and its representatives will meet periodically to discuss issues with students, faculty, and staff.

All of the companies will be committed to sustainability, recycling, and reducing the carbon imprint of the University of Minnesota. Both Coca-Cola and Taher have agreed that all vending machines at the U will be certified energy efficient by this coming fall. And ARAMARK and Sodexo have made a commitment to increasing the percentage of local products that they serve on University campuses.

"Over the past decade, the University's contracts for food and beverage service have improved customer choice and satisfaction as well as provided millions of dollars to support student services and our academic mission," said Bowman. "These new agreements are focused on healthy options, customer service, and continuing our commitment to sustainability and encouraging socially responsible business practices."