Local organic juice firm confronts Coke contract
As with many universities and colleges, the Wilfrid Laurier University Students’ Union (WLUSU) has a contract negotiated with Coca-Cola for the beverage supply in its food service and retail locations across campus. Expired as of Dec. 31, the agreement is currently being renegotiated according to WLUSU general manager Mike McMahon.
In past years, the monopolies Coke contracts often create on Canadian campuses have made headlines due to a perceived lack of choice for students as well as the quota systems in place. At the University of British Columbia, McMaster and Queen’s University, contracts have been artificially extended if schools did not meet a required level of beverage sales.
“We’re working with Coca-Cola right now on a renewal of that agreement,” McMahon said of the previous contract which included sales quotas that he admits weren’t met. “We’ve made it clear that we’re not going to have an agreement that has the same types of parameters that this one did.
“We need to worry about how we’re going to allow students to make healthy choices without worrying about how it will affect a committed volume,” he continued.
Due to a confidentiality clause written into the contract, McMahon could not discuss more specifics of WLUSU’s relationship with Coke, such as its total worth. Contracts with the cola giant prevent retailers from selling competing products, though McMahon noted the non-Coke product Red Bull is exempt and therefore sold on campus.
Mike Kelly, who co-founded the Kitchener juice company Kiju, raised concerns in December after his Kiju Organic juice was only briefly sold alongside Coke products in the C-Spot convenience store in the Fred Nichols Campus Centre.
“We did everything we had to and within four weeks, we were gone,” Kelly explained, noting that over the month of November, seven cases of Kiju had sold. His juice was allowed to be offered since Coke at the time offered no competing product and, he argues, still does not. Coke’s Odwalla line of “all-natural” drinks sold by WLUSU appear nearly identical to Kiju, but lack organic certification.
In late November, Kelly received an e-mail from the manager of the C-Spot saying that while Kiju had sold okay, they would no longer be stocked because the “all-natural” Coke Odwalla drinks would be sold instead of and not along with it. This should not have been in violation of the Coke contract according to Kelly since Odwalla is fundamentally different and not organic.
“That’s usually our easiest way to circumvent a contract; Coke doesn’t have any organic products,” he explained, noting that Kiju is being sold at numerous campuses with Coke contracts nationwide because of this.
McMahon cited low sales instead for the decision to stop selling Kiju. “It didn’t work out, from a sales perspective, not from a Coke contract perspective,” he said flatly. Kelly questioned whether the Coke representative had simply told WLUSU to pull the plug.
“‘Students dictate what they will drink’, well is it the students or the Coke rep?” he asked, paraphrasing a response he received from WLUSU. “The fact that there’s no organic products on a campus the size of Laurier, that’s a head-scratcher.”
While Kelly didn’t dispute the financial sense of signing a Coke contract from WLUSU’s standpoint, he still feels that the arrangement creates a dearth of choice and makes it nearly impossible for a smaller, local company like his to get a foot in the door.
“There’s a market out there, consumers looking for products with no GMOs, no pesticides, no herbicides,” he explained of the significance of organic certification.
“There is a population at Laurier that’s looking for them, but unless Coke has it, they’re not going to see it.”