Pepsi Loses Restaurant Contract - Business in the Burbs

Source: Business in the Burbs
By: Allan Drury

Just two weeks after losing the contract to sell soda and bottled water at six auto racing tracks, PepsiCo Inc. of Purchase has again been pushed aside by a business partner that prefers its rival, Coca-Cola Co.

Baja Fresh Mexican Grill, which runs 291 Tex-Mex restaurants in 23 states, has broken its five-year relationship with Pepsi and will sell Coca-Cola products.

Mike Pietro, a spokesman for the restaurant chain based in Thousand Oaks, Calif., said Pepsi made an offer that was competitive with Coke?™s. But he said management at the restaurant chain thought Coke?™s products, particularly its Diet Coke drink, would be a bigger hit with diners than Pepsi?™s.

He said the five-year contract is worth $10 million to $20 million. Pepsi?™s five-year contract ran out in February, he said.

Earlier this month, Coca-Cola won the rights to provide soda and other beverages at the Daytona International Speedway and nine other tracks. Pepsi had those rights for 50 years.

Robert Tuchman, the president of TSE Sports & Entertainment, a New York City-based sports marketing company, said at the time Coke would probably pay $5 million to $15 million a year year for the rights but the company would easily make that money by selling drinks.

Pepsi did not provide any comment.