Analysis of School Beverage Contracts

While contracts between beverage companies and schools have proliferated since the mid-1990s, the provisions of those contracts and the amount of revenue they generate for schools largely have been kept secret. In 2006, the Center for Science in the Public Interest and the Public Health Advocacy Institute conducted the first national study of school beverage contracts.

The beverage contracts typically provide schools/districts with cash advances, commissions on sales, and non-cash items. Average total annual revenue (cash payments plus commissions) to schools/districts per student was calculated for each of 120 contracts in the sample from 16 states.

We found that school beverage contracts generate an average of $18 per student per year for schools and/or school districts. Revenue to schools/districts ranged from about $0.60 to $93 per student per year.

Beverage companies are not giving money to schools – they are taking it. The majority (67%, on average) of revenue generated from school beverage sales goes to beverage companies rather than to the schools. School beverage contracts also contain provisions that allow beverage companies to market their products in schools.

Schools, state lawmakers, and members of Congress who are considering replacing soft drinks in vending machines with healthier options should be reassured by our findings. In most cases, the revenue generated by soft drink sales in schools is modest and could be replaced by the sale of healthier beverages or by alternative fundraisers that do not undermine children's diets or health.