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FOR IMMEDIATE RELEASE
PR- 249-03
September 9, 2003

MAYOR MICHAEL R. BLOOMBERG ANNOUNCES $166 MILLION MARKETING AND VENDING PARTNERSHIP WITH SNAPPLE BEVERAGE GROUP

City’s Chief Marketing Officer and the Department of Education’s Office of Strategic Partnerships Net Unprecedented Benefits for City

Mayor Michael R. Bloomberg and Snapple Beverage Group President Jack Belsito today announced that the Snapple Beverage Group, a division of Cadbury-Schweppes, plc Group, has become New York City’s first official corporate marketing partner under the City’s innovative plan to generate revenue by centralizing the City’s marketing assets and intellectual properties. Snapple has entered into a five-year vending and marketing agreement with the City of New York to commence in phases, beginning immediately, that guarantees the City $106 million in cash and $60 million in marketing and promotional value.

This unprecedented citywide alliance will deliver new and compelling sales opportunities for Snapple, provide a unique and relevant marketing partnership to help the company continue to grow its brand in New York City and around the world, and further Snapple’s role as a responsible business. Deputy Mayor for Economic Development & Rebuilding Daniel L. Doctoroff, NYC Chief Marketing Officer Joseph Perello, and Schools Chancellor Joel I. Klein also attended the event on the athletic field of John F. Kennedy High School.

“When this administration created the position of Chief Marketing Officer, we promised to combine innovative thinking with a common sense approach to marketing the City appropriately.” said Mayor Bloomberg.  “This partnership with Snapple will enhance our efforts to promote and market New York City as the premier tourist destination that it is, while at the same time providing the Department of Education with new financial resources.”

“Born over 30 years ago in New York City, Snapple is extraordinarily proud to be part of this groundbreaking effort to promote the greatest city and give back to the New York City school system,” said Snapple President Jack Belsito. “Together with the City we developed a partnership that keeps us focused on what’s important.”

The elements of the partnership between the City of New York and Snapple include:

  • In adherence with the NYC nutritional guidelines, Snapple will become the school’s exclusive provider via vending machines of water and 100% fruit juice in the City’s 1,200 schools.
  • Snapple will financially support the schools through commissions on sales from vending and by creating sponsorships, which will support sports and physical education programs including the Public School Athletic League (PSAL).
  • Outside of the schools, Snapple will become the official iced tea, water and chocolate drink (Yoo-hoo) for vending in the City.
  • Snapple will market these products directly with the City through the sponsorship of concerts, events, and utilization of the City’s owned media including outdoor media, TV and online assets.
  • Snapple has committed to work with its affiliates to promote New York City through its marketing and communications efforts.

“With this agreement, the Mayor’s strategy of centralizing marketing assets has now proven to have economic potential,” said Deputy Mayor Doctoroff.  “This partnership fulfills the Mayor’s promise to unify City agency resources and seek citywide marketing relationships with the private sector to deliver additional revenue and resources for the City and for each agency.”
 
Partnership with the Department of Education

“Snapple delivers a vending solution that is turn-key, allowing principals and educators to focus on educating and not on administrative or business issues,” Schools Chancellor Klein said.  “Principals are no longer responsible for negotiating, operating and collecting revenues for vending agreements and freeing them to focus on educating children. Our new approach allows the DOE rather than each individual school to centrally manage the vending operations, distribution of funds back to individual schools and implementation of the sponsorship revenues.”

As a part of their commitment to schools, Snapple has entered into a five-year agreement to exclusively vend bottled spring water and 100% juice for all schools. Snapple, in cooperation with the Department of Education, will develop new products that meet the City’s strict nutrition guidelines.  Snapple’s new product line “100% Juiced!” will include four flavors, Green Apple, Orange Mango, Grape and Fruit Punch, with Vitamins A, C, D and Calcium.  The new juices will be ready for distribution within the next 30 days.

Snapple’s five-year commitment will provide a minimum of $40.2 million to the DOE in cash, including commissions on every case sold plus an additional sponsorship investment to support sports and physical education in schools. Snapple’s commitment includes a minimum of $3 million per year for PSAL-associated programs. Funds will be used for the following:

  • Creating innovative awareness programs and educational materials designed to educate students, parents and teachers on the benefits of physical activity and a healthy diet.
  • Purchasing equipment, uniforms, coaches, and training.
  • Creating events and other initiatives specifically designed to encourage physical education both in schools and on weekends including the support for the PSAL’s 100th Anniversary in 2004.
  • Upgrading sports facilities including school playgrounds.

Prices for vended beverages in all schools will be fixed initially at $1.00 for water and 100% juice, an average of about 18% below the average retail price for comparative beverages in the City.  Moreover, Snapple will be responsible for 100% of the installation, operation, maintenance and fulfillment of all vending machines.

Citywide Marketing And Vending Partnership

In a second agreement to begin January 1, 2004, Snapple will be granted the exclusive right to vend iced teas, water and chocolate drinks throughout City controlled properties. Snapple will vend items including its popular Snapple Lemon Iced Tea, Snap2-0 spring water and Yoo-hoo chocolate drink among others. The City of New York will receive $66 million in cash over the term of the agreement, which includes commissions on every case sold at appropriate vending opportunities within City-owned buildings, facilities, parks and other locations; as well as an annual marketing commitment for use of city-owned media (outdoor, television, online) city-run promotions, the sponsorship of events and concerts, and other unique marketing solutions provided by NYC Marketing.

In addition, Snapple and the City’s marketing team, NYC Marketing, will jointly promote Snapple’s association with New York City. In total, Snapple will direct $60 million over the next five years towards jointly marketing New York City and Snapple, providing the City with new ways to reach tourists and consumers without requiring an increase in Snapple’s marketing budget.

“At the Mayor’s instruction and with unwavering support from him and Deputy Mayor Doctoroff, we have set out to do something no city has done before,” said Joseph Perello, New York City’s Chief Marketing Officer. “Snapple’s partnership is a testament to our strategy of delivering tangible value to corporations allowing them to deliver real benefits, including cash and resources, to the City and individual City agencies.”

About NYC Marketing

In July 2003, the Bloomberg Administration created the New York City Marketing Development Corporation (NYC Marketing), a local development corporation, run by Joseph M. Perello, the City’s first Chief Marketing Officer. Its mission is to centralize the City’s marketing assets, rights and authority in order to generate new revenues and resources and to create a plan to enhance the City’s brand around the world for the growth of jobs and tourism.  Its agreement with the City names NYC Marketing as the exclusive manager of all of the City’s marketing assets and intellectual properties including media, advertising, sponsorship, licensing and other commercial marketing initiatives.  NYC Marketing creates custom and competitive value propositions for companies seeking new and unique ways to communicate with their constituents using the City’s assets as a vehicle in appropriate and relevant ways.  NYC Marketing is self-funded and works with all City agencies for the common good of New York. Revenues and resources generated from its efforts are distributed among agencies and towards the City’s overall marketing campaign to grow jobs and tourism.







MEDIA CONTACT:


Edward Skyler / Jennifer Falk   (212) 788-2958

Russo   (DOE)
(212) 374-5141

Marke Rubenstein (Snapple)   (212) 981-7815




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