REPORT TO THE CITY COUNCIL
December 6, 2018
FROM: WILLIAM OVERFELT, General Manager
Fresno Convention & Entertainment Center/SMG
SUBJECT
Title
Approve Sponsorship Agreement with Pepsi Beverages Company to be Exclusive Non-Alcoholic Beverage Provider for the Fresno Convention & Entertainment Center
Body
RECOMMENDATION
Staff recommends approval of the Sponsorship Agreement, which will provide an annual sponsorship fee of $20,000 from the year 2018 to 2027, plus a 25 percent commission for vending machines, and $3.00 rebate per case or gallon sold, in exchange for Pepsi's designation as exclusive non-alcoholic beverage provider for the Fresno Convention & Entertainment Center.
EXECUTIVE SUMMARY
The Sponsorship Agreement designates Pepsi as the exclusive non-alcoholic beverage provider for the Fresno Convention & Entertainment Center and provides for bulk-rate pricing and maintenance of beverage equipment through December 31, 2027. In exchange for this designation, Pepsi will provide an annual sponsorship fee of $20,000 from the year 2018 to 2027 (or until minimum volume thresholds are reached), plus a 25 percent commission for vending machines, and a $3.00 rebate per case or gallon sold. Such commissions and rebates are paid annually.
The commission revenues are estimated at $5,100 per year and the rebates estimated at $11,300 based on 2016 volume. Using these estimates, the total annual funding from this contract will vary, but could be as much as $36,400 in one year.
BACKGROUND
SMG subcontracts for food and beverage services pursuant to its contract with the City to manage the Fresno Convention & Entertainment Center. Sponsorship Agreements and major subcontracts for supplies and services require City approval prior to SMG entering into them. SMG, working with the Superlative Group, Inc., prepared a Request for Proposal (RFP) and distributed it to Pepsi, Coca Cola and Dr. Pepper. Responses to the RFP received from Pepsi and Coca Cola. ...
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