Beverage Industry

'Officially' Speaking

August 1, 2004

‘Officially’ Speaking

I was interested to read recently that the state of Illinois is in the process of naming an “Official Beverage of Illinois”. It seems that earlier this year, Illinois Governor Rod Blagojevich teamed with Maryland-based Team Services LLC to market state property by selling licensing rights for goods and services.
According to reports, the Land of Lincoln is now soliciting information from the state’s bottlers and distributors to determine an official beverage. The company that receives the title would have exclusive rights to sell the beverage on all state-owned property, including state fairs, road-side stops and office buildings.
Such contracts are becoming popular with state and local governments, which are under tremendous pressure to find creative ways to raise funding. New York City, for example, teamed with Snapple to put its products in schools and city offices in exchange for program funding.
Pepsi MidAmerica, Marion, Ill., one of the companies considering a bid to be Illinois’ official beverage, has said it believes the move could be bad for small businesses. The company says the plan is detrimental to current business arrangements for special organizations and communities such as vending operators for the visually impaired, which distribute products at rest stops, and clubs and civic groups that currently sell items at state functions.
“In addition, Pepsi Mid-America believes the governor’s marketing plan is too intrusive because it takes away local decision-making on beverage selections and vendors as well as other products and services. The exclusivity of an ‘official’ beverage is impractical to bid since most beverage distributors in the state have limited distribution territories. For instance, full-line vending companies, soft drink distributors and franchise bottlers would have to limit participation to its area of service,” the company said in a statement.
There are clear logistical challenges to making such a contract work, and as a Chicago resident for several years, it also seems a little presumptuous to me to designate one beverage as the “official” choice for an entire state, especially one with  populations as diverse as those in Illinois.
Am Ireally concerned about the types of beverages available at state rest stops? No. I’m sure people who stop at them are just happy to have a cold drink. But smaller beverage companies have a hard enough time getting their products into sales and distribution outlets. Adding yet another exclusive sales venue seems like one more way to make it difficult for consumers to find variety and for those smaller, breakthrough products to find their way to market. BI