Mcteachers and coke dudes

NOT SATISFIED WITH MARKETING to children through playgrounds, toys, cartoons, movies, videos, charities, and amusement parks, through contests, sweepstakes, games, and clubs, via television, radio, magazines, and the Internet, fast food chains are now gaining access to the last advertising‑free outposts of American life. In 1993 District 11 in Colorado Springs started a nationwide trend, becoming the first public school district in the United States to place ads for Burger King in its hallways and on the sides of its school buses. Like other school systems in Colorado, District 11 faced revenue shortfalls, thanks to growing enrollments and voter hostility to tax increases for education. The initial Burger King and King Sooper ad contracts were a disappointment for the district, gaining it just $37,500 a year – little more than $1 per student. In 1996, school administrators decided to seek negotiating help from a professional, hiring Dan DeRose, president of DD Marketing, Inc., of Pueblo, Colorado. DeRose assembled special advertising packages for corporate sponsors. For $12,000, a company got five school‑bus ads, hallway ads in all fifty‑two of the district’s schools, ads in their school newspapers, a stadium banner, ads over the stadium’s public‑address system during games, and free tickets to high school sporting events.

Within a year, DeRose had nearly tripled District 11’s ad revenues. But his greatest success was still to come. In August of 1997, DeRose brokered a ten‑year deal that made Coca‑Cola the district’s exclusive beverage supplier, bringing the schools up to $11 million during the life of the contract (minus DD Marketing’s fee). The deal also provided free use of a 1998 Chevy Cavalier to a District 11 high school senior, chosen by lottery, who had good grades and a perfect attendance record.

District 11’s marketing efforts were soon imitated by other school districts in Colorado, by districts in Pueblo, Fort Collins, Denver, and Cherry Creek. Administrators in Colorado Springs did not come up with the idea of using corporate sponsorship to cover shortfalls in a school district’s budget. But they took it to a whole new level, packaging it, systematizing it, leading the way. Hundreds of public school districts across the United States are now adopting or considering similar arrangements. Children spend about seven hours a day, one hundred and fifty days a year, in school. Those hours have in the past been largely free of advertising, promotion, and market research – a source of frustration to many companies. Today the nation’s fast food chains are marketing their products in public schools through conventional ad campaigns, classroom teaching materials, and lunchroom franchises, as well as a number of unorthodox means.

The proponents of advertising in the schools argue that it is necessary to prevent further cutbacks; opponents contend that schoolchildren are becoming a captive audience for marketers, compelled by law to attend school and then forced to look at ads as a means of paying for their own education. America’s schools now loom as a potential gold mine for companies in search of young customers. “Discover your own river of revenue at the schoolhouse gates,” urged a brochure at the 1997 Kids Power Marketing Conference. “Whether it’s first‑graders learning to read or teenagers shopping for their first car, we can guarantee an introduction of your product and your company to these students in the traditional setting of the classroom.”

DD Marketing, with offices in Colorado Springs and Pueblo, has emerged as perhaps the nation’s foremost negotiator of ad contracts for schools. Dan DeRose began his career as the founder of the Minor League Football System, serving in the late 1980s as both a team owner and a player. In 1991, he became athletic director at the University of Southern Colorado in Pueblo. During his first year, he raised $250,000 from corporate sponsors for the school’s teams. Before long he was raising millions of dollars to build campus sports facilities. He was good at getting money out of big corporations, and formed DD Marketing to use this skill on behalf of schools and nonprofits. Beverage companies and athletic shoe companies had long supported college sports programs, and during the 1980s began to put up the money for new high school scoreboards. Dan DeRose saw marketing opportunities that were still untapped. After negotiating his first Colorado Springs package deal in 1996, he went to work for the Grapevine‑Colleyville School District in Texas. The district would never have sought advertising, its deputy superintendent told the Houston Chronicle , “if it weren’t for the acute need for funds.” DeRose started to solicit ads not only for the district’s hallways, stadiums, and buses, but also for its rooftops – so that passengers flying in or out of the nearby Dallas–Forth Worth airport could see them – and for its voice‑mail systems. “You’ve reached Grapevine‑Colleyville school district, proud partner of Dr Pepper,” was a message that DeRose proposed. Although some people in the district were skeptical about the wild ideas of this marketer from Colorado, DeRose negotiated a $3.4 million dollar exclusive deal between the Grapevine‑Colleyville School District and Dr Pepper in June of 1997. And Dr Pepper ads soon appeared on school rooftops.

Dan DeRose tells reporters that his work brings money to school districts that badly need it. By pitting one beverage company against another in bidding wars for exclusive deals, he’s raised the prices being offered to schools. “In Kansas City they were getting 67 cents a kid before,” he told one reporter, “and now they’re getting $27.” The major beverage companies do not like DeRose and prefer not to deal with him. He views their hostility as a mark of success. He doesn’t think that advertising in the schools will corrupt the nation’s children and has little tolerance for critics of the trend. “There are critics to penicillin,” he told the Fresno Bee . In the three years following his groundbreaking contract for School District 11 in Colorado Springs, Dan DeRose negotiated agreements for seventeen universities and sixty public school systems across the United States, everywhere from Greenville, North Carolina, to Newark, New Jersey. His 1997 deal with a school district in Derby, Kansas, included the commitment to open a Pepsi GeneratioNext Resource Center at an elementary school. Thus far, DeRose has been responsible for school and university beverage deals worth more than $200 million. He typically accepts no money up front, then charges schools a commission that takes between 25 and 35 percent of the deal’s total revenues.

The nation’s three major beverage manufacturers are now spending large sums to increase the amount of soda that American children consume. Coca‑Cola, Pepsi, and Cadbury‑Schweppes (the maker of Dr Pepper) control 90.3 percent of the U.S. market, but have been hurt by declining sales in Asia. Americans already drink soda at an annual rate of about fifty‑six gallons per person – that’s nearly six hundred twelve‑ounce cans of soda per person. Coca‑Cola has set itself the goal of raising consumption of its products in the United States by at least 25 percent a year. The adult market is stagnant; selling more soda to kids has become one of the easiest ways to meet sales projections. “Influencing elementary school students is very important to soft drink marketers,” an article in the January 1999 issue of Beverage Industry explained, “because children are still establishing their tastes and habits.” Eight‑year‑olds are considered ideal customers; they have about sixty‑five years of purchasing in front of them. “Entering the schools makes perfect sense,” the trade journal concluded.

The fast food chains also benefit enormously when children drink more soda. The chicken nuggets, hamburgers, and other main courses sold at fast food restaurants usually have the lowest profit margins. Soda has by far the highest. “We at McDonald’s are thankful,” a top executive once told the New York Times , “that people like drinks with their sandwiches.” Today McDonald’s sells more Coca‑Cola than anyone else in the world. The fast food chains purchase Coca‑Cola syrup for about $4.25 a gallon. A medium Coke that sells for $1.29 contains roughly 9 cents’ worth of syrup. Buying a large Coke for $1.49 instead, as the cute girl behind the counter always suggests, will add another 3 cents’ worth of syrup – and another 17 cents in pure profit for McDonald’s.

“Liquid Candy,” a 1999 study by the Center for Science in the Public Interest, describes who is not benefiting from the beverage industry’s latest marketing efforts: the nation’s children. In 1978, the typical teenage boy in the United States drank about seven ounces of soda every day; today he drinks nearly three times that amount, deriving 9 percent of his daily caloric intake from soft drinks. Soda consumption among teenaged girls has doubled within the same period, reaching an average of twelve ounces a day. A significant number of teenage boys are now drinking five or more cans of soda every day. Each can contains the equivalent of about ten teaspoons of sugar. Coke, Pepsi, Mountain Dew, and Dr Pepper also contain caffeine. These sodas provide empty calories and have replaced far more nutritious beverages in the American diet. Excessive soda consumption in childhood can lead to calcium deficiencies and a greater likelihood of bone fractures. Twenty years ago, teenage boys in the United States drank twice as much milk as soda; now they drink twice as much soda as milk. Soft‑drink consumption has also become commonplace among American toddlers. About one‑fifth of the nation’s one‑ and two‑year‑olds now drink soda. “In one of the most despicable marketing gambits,” Michael Jacobson, the author of “Liquid Candy” reports, “Pepsi, Dr Pepper and Seven‑Up encourage feeding soft drinks to babies by licensing their logos to a major maker of baby bottles, Munchkin Bottling, Inc.” A 1997 study published in the Journal of Dentistry for Children found that many infants were indeed being fed soda in those bottles.

The school marketing efforts of the large soda companies have not gone entirely unopposed. Administrators in San Francisco and Seattle have refused to allow any advertising in their schools. “It’s our responsibility to make it clear that schools are here to serve children, not commercial interests,” declared a member of the San Francisco Board of Education. Individual protests have occurred as well. In March of 1998, 1,200 students at Greenbrier High School in Evans, Georgia, assembled in the school parking lot, many of them wearing red and white clothing, to spell out the word “Coke.” It was Coke in Education Day at the school, and a dozen Coca‑Cola executives had come for the occasion. Greenbrier High was hoping for a $500 prize, which had been offered to the local high school that came up with the best marketing plan for Coca‑Cola discount cards. As part of the festivities, Coke executives had lectured the students on economics and helped them bake a Coca‑Cola cake. A photographer was hoisted above the parking lot by a crane, ready to record the human C‑O‑K‑E for posterity. When the photographer started to take pictures, Mike Cameron – a Greenbrier senior, standing amid the letter C – suddenly revealed a T‑shirt that said “Pepsi.” His act of defiance soon received nationwide publicity, as did the fact that he was immediately suspended from school. The principal said Cameron could have been suspended for a week for the prank, but removed him from classes for just a day. “I don’t consider this a prank,” Mike Cameron told the Washington Post . “I like to be an individual. That’s the way I am.”

Most school advertising campaigns are more subtle than Greenbrier High’s Coke in Education Day. The spiraling cost of textbooks has led thousands of American school districts to use corporate‑sponsored teaching materials. A 1998 study of these teaching materials by the Consumers Union found that 80 percent were biased, providing students with incomplete or slanted information that favored the sponsor’s products and views. Procter & Gamble’s Decision Earth program taught that clear‑cut logging was actually good for the environment; teaching aids distributed by the Exxon Education Foundation said that fossil fuels created few environmental problems and that alternative sources of energy were too expensive; a study guide sponsored by the American Coal Foundation dismissed fears of a greenhouse effect, claiming that “the earth could benefit rather than be harmed from increased carbon dioxide.” The Consumers Union found Pizza Hut’s Book It! Program – which awards a free Personal Pan Pizza to children who reach targeted reading levels – to be “highly commercial.” About twenty million elementary school students participated in Book It! during the 1999–2000 school year; Pizza Hut recently expanded the program to include a million preschoolers.

Lifetime Learning Systems is the nation’s largest marketer and producer of corporate‑sponsored teaching aids. The group claims that its publications are used by more than 60 million students every year. “Now you can enter the classroom through custom‑made learning materials created with your specific marketing objectives in mind,” Lifetime Learning said in one of its pitches to corporate sponsors. “Through these materials, your product or point of view becomes the focus of discussions in the classroom,” it said in another, “…the centerpiece in a dynamic process that generates long‑term awareness and lasting attitudinal change.” The tax cuts that are hampering America’s schools have proved to be a marketing bonanza for companies like Exxon, Pizza Hut, and McDonald’s. The money that these corporations spend on their “educational” materials is fully tax‑deductible.

The fast food chains run ads on Channel One, the commercial television network whose programming is now shown in classrooms, almost every school day, to eight million of the nation’s middle, junior, and high school students – a teen audience fifty times larger than that of MTV. The fast food chains place ads with Star Broadcasting, a Minnesota company that pipes Top 40 radio into school hallways, lounges, and cafeterias. And the chains now promote their food by selling school lunches, accepting a lower profit margin in order to create brand loyalty. At least twenty school districts in the United States have their own Subway franchises; an additional fifteen hundred districts have Subway delivery contracts; and nine operate Subway sandwich carts. Taco Bell products are sold in about forty‑five hundred school cafeterias. Pizza Hut, Domino’s, and McDonald’s are now selling food in the nation’s schools. The American School Food Service Association estimates that about 30 percent of the public high schools in the United States offer branded fast food. Elementary schools in Fort Collins, Colorado, now serve food from Pizza Hut, McDonald’s, and Subway on special lunch days. “We try to be more like the fast food places where these kids are hanging out,” a Colorado school administrator told the Denver Post . “We want kids to think school lunch is a cool thing, the cafeteria a cool place, that we’re ‘with it,’ that we’re not institutional…”

The new corporate partnerships often put school officials in an awkward position. The Coca‑Cola deal that DD Marketing negotiated for Colorado Springs School District 11 was not as lucrative as it first seemed. The contract specified annual sales quotas. School District 11 was obligated to sell at least seventy thousand cases of Coca‑Cola products a year, within the first three years of the contract, or it would face reduced payments by Coke. During the 1997–98 school year, the district’s elementary, middle, and high schools sold only twenty‑one thousand cases of Coca‑Cola products. Cara DeGette, the news editor of the Colorado Springs Independent , a weekly newspaper, obtained a memorandum sent to school principals by John Bushey, a District 11 administrator. On September 28, 1998, at the start of the new school year, Bushey warned the principals that beverage sales were falling short of projections and that as a result school revenues might be affected. Allow students to bring Coke products into the classrooms, he suggested; move Coke machines to places where they would be accessible to students all day. “Research shows that vendor purchases are closely linked to availability,” Bushey wrote. “Location, location, location is the key.” If the principals felt uncomfortable allowing kids to drink Coca‑Cola during class, he recommended letting them drink the fruit juices, teas, and bottled waters also sold in the Coke machines. At the end of the memo, John Bushey signed his name and then identified himself as “the Coke dude.”

Bushey left Colorado Springs in 2000 and moved to Florida. He is now the principal of the high school in Celebration, a planned community run by The Celebration Company, a subsidiary of Disney.