The Coke-Pepsi Challenge

Eron Ben-Yehuda and Kelly Wilkinson

HUNTINGTON BEACH -- Living so close to Santa Monica, local residents can

“Take the Pepsi Challenge” and find out which beverage maker does a more

tasteful job as a city sponsor.

While the city-owned Santa Monica Municipal Pier signed a three-year

contract with Pepsi last June, the official drink of Surf City has been

Coca-Cola since February 1999.

The two deals are quite different.

Santa Monica’s $50,000 a year contract with the “Generation Next” company

makes Pepsi products the only soft drinks available at the pier. Pier

Restoration Corp. and its tenants, which include the Pacific Park

amusement park, use the money for their marketing efforts.

Jan Palchikoff, executive director of the Pier Restoration Corp., said

the arrangement was brokered in unique Santa Monica style -- meaning that

the partnership has low visibility to residents since Pepsi is not

allowed to smother the Santa Monica Pier with its logo or signs. As a

result, all customers might have noticed are some new Pepsi umbrellas and

Pepsi’s increased sponsorship of pier-related events such as the upcoming

Twilight Dance Series.

On the other hand, Huntington Beach’s deal with Coca-Cola means a

$300,000 check every year, triple what Pepsi bid for the city. The

10-year partnership agreement gives new meaning to the slogan “Always

Coca-Cola,” as the Atlanta, Ga.-based beverage maker is the only one that

can advertise on city property.

To help people remember to “Have a Coke and a Smile,” the company has the

right to spread the message on lifeguard towers, beach lockers,

concession stands, trash cans, street lamps, benches and city vehicles,

according to the agreement. The city also is required to arrange 150

locations throughout Huntington Beach for Coca-Cola vending machines.

The partnership further provides the right to use the city’s official

logo and its Surf City trademark in print, radio and television ads. It

hasn’t done so yet, but that may change, company spokesman Bob Phillips

said.

Coca-Cola benefits by associating the soft drink with the city’s image of

fun in the sun, he said.

Despite the company slogan “Coke Is It,” the soft drink manufacturer has

kept a low profile in Huntington Beach until now. That is expected to

change this summer, with a more aggressive ad campaign, said Jim Engle,

the city’s deputy director of community services.

“They’re gearing up just like we’re gearing up,” he said. “We’re going to

try to assist them in getting involved in all the events or as many

events as possible.”

Compared to last summer, there may be more banners, signs and posters

with the trademark red and white logo, although no final decision has

been made, Phillips said. And instead of just one Coke “Beach Buggy,”

this summer the company may bring out as many as three of the tiny

off-road vehicles pulling a trailer of carbonated refreshments to sell to

sunbathers, he said.

The amount of advertising may not fly with locals, who are already having

a hard time swallowing the deal, saying the city is selling out.

“I guess it’s big business nowadays,” resident Frank Samoluk said as he

drank a Coke while relaxing at Pier Plaza. “Everything revolves around

money.”

But resident Ann Furman, drinking a Pepsi by a concession stand, said she

would do the same thing if she were in the city’s shoes.

“We need the money here,” she said.

The money makes things smoother for Santa Monica as well, although the

pier does not suffer from as much advertisement.

“We can’t splash a company’s name all over the place,” Palchikoff said,

since city ordinances prohibit that type of corporate arrangement. “There

are things that aren’t for sale here that are at a lot of other places.”

Jeff Mathieu, director of resource management for Santa Monica, said the

Pepsi venture is one of the factors that has led to the pier becoming

more financially viable. For more than 20 years, the city took heavy

financial losses at the pier, which Mathieu said has been turning around.

“We’re not at a break-even clip yet,” he said. “But perhaps in a year or

two we’ll be there.”

Chris Volaski, president of the Pier Lessees Assn., said the company has

provided everything they promised last summer, from new soda equipment to

improved delivery -- and all at a better price since all the pier tenants

buy bulk Pepsi products in one block.

Palchikoff said the relative subtlety of the Pepsi deal stems from the

pier being treated as a public street in Santa Monica.

“It’s done like that by design,” Palchikoff said. “If the community

doesn’t buy into [the partnership], it doesn’t work for the sponsors or

the customers. So it’s a real juggling act.”

Officials in Huntington Beach are sensitive to the charge of

over-commercialization, especially after residents complained about the

vending machines being placed in areas that interfere with the ocean

view.

“We have had some backlash,” Engle said.

About 130 of the 150 machines have been installed so far, he said. One in

Bluff Top Park and another in Huntington Harbour were removed due to

protests, he said.

The company is committed not to turn Surf City into Slurp City, Phillips

stressed.

As far as which beverage tastes better, Engle said the money makes Coke

sweet.

“It tastes better every time we get a $300,000 check from them,” he said.