From the Publisher

When was the last time you watched or took part in a sporting event where there were no sports drinks? And although there are other sports drinks out there, how often do you see a brand other than Gatorade? Gatorade invented the sports drink 40 years ago, and it has been first in the marketplace -- by a long shot -- ever since. But Gatorade is more than just a thirst quencher and a dominant brand. It has become an icon of popular culture -- witness the globally televised "Gatorade baths" administered to victorious football coaches -- and a must-have symbol of "hip" well beyond the athlete's realm.

Published to coincide with the 40th anniversary of Gatorade's invention, First in Thirst chronicles the rise of the sports drink industry and the near-monopoly that Gatorade has built and maintained through savvy marketing and branding strategies.

Gatorade's history spans the nutrition and fitness fads as well as the rise of celebrity endorsers and designer advertising. Rovell has gained access to virtually all of the key figures in this colorful and instructive story, from the original inventors to top executives to well-known athletes and coaches. The book includes exclusive accounts of the drink's invention, and takes an inside look at the evolution of a global phenomenon. In many ways, Gatorade has found the Holy Grail of product success: it not only created and perfected a great product, it also singlehandedly built the need and the market that would ensure that product's dominance year after year.

Ft.Worth Star Telegram

"Tthis book is a rewarding read!"

Mississippi Business Journal

"a fascinating business story."

Library Journal

Gatorade, which has ubiquitous) name recognition and an 80 percent market share, turns 40 this year. Rovell (sports/ business reporting, ESPN; coauthor, On the Ball) here explains its success. Gatorade started at the University of Florida, where the Gators have played football for generations. Local physicians, approached with the problem of players getting sick and sometimes even dying because of the heat, determined that a depletion of body salts (also known as electrolytes) was the cause. Their formula rapidly delivered nutrients to players in the heat of battle. Subsequently, the drink was seen as an incredible opportunity to create a huge new market, and efforts were made to give it a more pleasant flavor. With additional research reestablishing its effectiveness and sponsorship from a vast majority of pro, varsity, and even high school sports teams, Gatorade dominates every single sport that involves perspiration. Sports fan will enjoy this book while learning about branding and marketing, so it is recommended for large public libraries. As a title from the American Management Association, it will also be most useful in business school libraries.-Stephen Turner, San Francisco Copyright 2005 Reed Business Information.

Synopsis - Soundview Executive Book Summaries

Forty years ago, Gatorade invented the sports drink, and it has been first in the marketplace — by a long shot — ever since. But Gatorade is more than just a thirst quencher and a dominant brand. It has become an icon of popular culture — witness the globally televised "Gatorade baths" administered to victorious football coaches — and a must-have symbol of "hip" well beyond the athlete's realm.

In First in Thirst, business journalist Darren Rovell chronicles the rise of the sports-drink industry and the near-monopoly that Gatorade has built and maintained through savvy marketing and branding strategies. He also offers an inside look at the negotiations, battles, lawsuits, mergers and acquisitions, product strategies, lucky breaks, and even the missteps that have attended Gatorade's reign as the 800-pound gorilla of the sports-drink scene.

The Gatorade Rules
To explain why Gatorade is so successful, Rovell writes that the following nine business principles have helped it become one of the most powerful brands in modern-day business history:

1. Make sure your product, service or brand is unique, and know what makes it unique. The drink started out as being sold only to athletic teams, but once its owner Stokely-Van Camp realized that Gatorade could appeal to the mass market, it almost stopped positioning it as a sports drink. Rovell points out that Stokely spent much time and energy trying to increase awareness of the brand through advertising that didn't always include active athletes.
2. Never stop researching the marketplace. While they controlled the brand, Quaker Oats executives realized that the thirst-quenching market was going to be enough of a business to make the company profitable. "We saw the baby boomers really coming into their prime, and the whole notion of exercise and getting out there and running was going to be huge," said Quaker Oats executive Phil Marineau.
3. Identify drivers of the business and take care of them. Gatorade's marketers realized that consumers would buy the product, but the "drivers," the influencers who drive sales, are the athletes and trainers.
4. Never stop working to get your next customer. From the time of Quaker Oats' acquisition of Gatorade, executives working on the brand always understood the value of grass-roots marketing. It was always important for the company to reinvest in the consumers, making sure Gatorade was sponsoring amateur events, and was available where active athletes were thirsty.
5. Packaging counts. The beverage market has always used changes in packaging to drive sales. Early Gatorade research found that consumers were more package loyal than brand loyal. Rovell writes that Gatorade's goal was to vary the type of packaging in order to get into the consumer's hands.
6. Learn from your mistakes. One of Gatorade's greatest mistakes was the low-calorie Gatorade Light. Gatorade tried to bring women — who made up only 20 percent of its customers — into the franchise by creating Gatorade Light in 1990. It used saccharin as a sweetener, which hurt the product's taste. But managers soon realized that consumers wanted a full Gatorade or nothing.
7. Seek to connect emotion and passion to the brand. A brand is only as good as the people behind it. Gatorade didn't fight off the onslaught of Pepsi and Coke in the early 1990s by simply having a good product. Rovell points out that it also had good people who didn't want to lose.
8. Stay disciplined. With any major brand, the temptation is to use the brand name to branch out, but cannibalization of the brand is always a risk. Before Quaker Oats acquired Gatorade, its previous owner had licensed the Gatorade brand name for a gum called Gatorgum. The problem with the gum was that it had no benefit that was similar to what Gatorade did for the body. Further hurting Quaker Oats was the fact that it wasn't a good seller. Quaker Oats got rid of it when the license ran out.
9. Form smart strategic alliances. Gatorade had partnerships with trainers and athletes and many leagues, but its alliance with ESPN also helped the brand grow stronger. Over the years, Rovell writes, investing in the network's sports programming through advertising has allowed the brand to be automatically prominent in the minds of sports fans, who are not only consumers but often active participants who fall into Gatorade's target market.

What People Are Saying

Chris Murray
"I started reading it, and...couldn't put it down."
—Former Editor-in-Chief of Soundview Executive

Product Details

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Table of Contents

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First in Thirst

AMACOM BOOKS

Introduction

As a seventh grader on the Roslyn Middle School cross-country team, I wasn't exactly an asset. Thanks to my occasional walking during races, I finished so far behind the pack that my scores were almost never counted in the team standings. Some people might have given up, but there remained one thing that validated my worth as an athlete. Luckily, 16 ounces of the magic potion could be purchased for $1.29.

Others might have bought Gatorade as the juice that gave them that extra edge, but for me, it wasn't about staying hydrated. I couldn't have cared less about the science behind it all. It wasn't about the great taste, either. I mean, who really wants salt in their drink?

It was not as clear then as it is now, but holding that glass bottle in my hand and drinking the very same yellow, red, and orange concoction that was guzzled by all the athletes I admired made me feel as if we had a bond.

Wheaties could call itself "The Breakfast of Champions," but I never really believed it. Did you ever see the athletes featured on the box chowing down on those flakes? There definitely weren't spoons and bowls scattered on the playing field.

I was sure that Gatorade was the "Drink of Champions." Every place I watched, either in person or on television,there were those big orange coolers full of it. Pitchers who had just struck out the side would go into the dugout, grab a green waxed paper cup with the Gatorade logo on it, and refill themselves with the special substance that would certainly give them another inning of success.

For as long as I could remember, NFL players would hoist the Gatorade cooler and dump it on their coach, surely a sign of homage to the drink as much as it was to the coach himself, at least to this 14-year-old.

So while others in my grade worshipped Right Said Fred for his rendition of "I'm Too Sexy," the official theme song among my clique was "Be Like Mike," the Gatorade jingle featuring Chicago Bulls superstar Michael Jordan, which was introduced less than a year before my graduation.

Before I knew anything about sports marketing, I thought that every team had Gatorade on the sidelines or on the bench because if they didn't, they were pretty much forfeiting the game. I knew it wasn't in the official rules, but I thought that every team just understood that Gatorade was the 10th batter in Major League Baseball, the 12th man on an NFL offense, and the 13th man on an NBA bench.

As I grew older and learned more about the business, I started to understand that the omnipresence of the brand was part of a well-targeted strategy. Gatorade had amassed a network of thousands of sponsorship deals worth hundreds of millions of dollars (at least $135 million was spent on advertising alone in both 2003 and 2004) that required leagues and events to give the brand a significant presence.

Today, more than 60 Division I-A schools are under contract to use the brand, as are 28 of the 30 NBA teams. Gatorade is guaranteed to be the official drink on the sidelines of every NFL team through the 2011 season, thanks to a deal that was signed in February 2004 that pledges that the brand will pay the league more than $45 million per year. The brand is also a large part of the amateur sports scene, sponsoring thousands of road races and active sporting events as well as awards for high school athletes in all 50 states and the District of Columbia.

It's one thing to have a great marketing plan. It's another to execute it to near perfection, as those who worked on Gatorade's brand have done over the years.

That being said, all the marketing in the world won't create sales if the product isn't any good. I might not have cared how or if it worked, and I'm sure scores of others didn't either, but it must have helped.

Only once did I associate Gatorade with failure-when Chicago Cubs second baseman Ryne Sandberg accidentally spilled a bucket of the drink on first baseman Leon Durham's glove 10 minutes before the start of the fifth and final game of the 1984 National League Playoffs. Durham's error in the seventh inning of the game helped the Padres take the lead and eventually win.

"The glove got heavy and sticky after the Gatorade spilled on it," Durham said. But for every Durham error, there were scores of stories that associated Gatorade with a winner-real stories about real athletes who supposedly gained a real advantage from sucking it down.

Like the story of a harness horse named Manfred Hanover, who in 1985 won an astounding 24 of 46 races. In 1986, the horse was recognized by Sports Illustrated after prevailing in 16 straight races. The secret for the horse, whose father was aptly named Super Bowl? Drinking 200 gallons of orange Gatorade each year.

In 2004, 19-year-old Olympic swimmer Michael Phelps tied Mark Spitz's American record by winning eight medals at the Summer Games in Athens. When he bought his mother, Debbie, a new Mercedes, he told her it was "for all the Gatorade you bought me." The Gatorade mystique doesn't involve just those in the sports world. Its legend has been affirmed in the most untraditional of environments, most recently in the story of five-year-old Ruby Bustamante. In April 2004, a guardrail repairman in California found Ruby and her mother in a ravine 130 feet below the highway after a car accident that had occurred 10 days before. Ruby's mother had died immediately as a result of the crash, but Ruby survived, thanks to somehow having the wherewithal to ration the uncooked ramen noodles and Gatorade that happened to have been in the car. Gatorade and Nissin Foods, the maker of the noodles, reportedly donated $5,000 each to establish Ruby's college fund.

Gatorade has become one of the most perfect products in American consumer history. The drink itself has meaning, an unshakable marketing platform, and a sales force that has refused to give up anything to its competition. This has led to an 80 percent market share throughout the better part of the drink's existence.

The New York Times named Gatorade one of the 100 best brands of the 20th century-along with the beverage kings Coca-Cola, Pepsi, and Budweiser. But consider that Pepsi and Coca-Cola's share of the U.S. soft drink market combined does not equal Gatorade's share of the sports drink market. Anheuser Busch, maker of Budweiser, had its best year ever in the United States in 2003, with its domestic market share topping out at 49.8 percent-paltry compared to Gatorade's 80 percent.

Sales of shoes for Nike and Reebok combined don't equal the market share that is enjoyed by Gatorade. Only a select few companies can claim such a high market share, such as Intel (about 80 percent of the U.S. PC processor market), Apple (about 80 percent of the U.S. digital music player market), and eBay (about 80 percent of the online auction economy).

Although I felt like drinking Gatorade made me part of a unique club, I obviously was not alone. The drink is a favorite of former vice president Al Gore, it's the frequent liquid of choice of Hustler publisher Larry Flynt, and fictitious sports agent Jerry Maguire pulls orange Gatorade from the fridge in his office in the movie of the same name. Even two of the most popular bulls on the Professional Bull Riders tour, Little Yellow Jacket and Slim Shady, have Gatorade in their water troughs before they go out each night.

It has a loyal following in the music world, too. Elvis chugged Gatorade during his comeback tour in the early 1970s, and the sports drink soon became the required dressing room beverage of R.E.M., KISS, Luther Vandross, and Tom Petty. The members of the group The Moody Blues led all musicians in quantity-requiring 27 liters of lemon-lime Gatorade for every show.

As players on the football team at the University of Florida drink it, so too do the Gators fans, who on average, consume 10,000 Gatorades while sitting in the stands during home games. Just as it is as relevant to athletes and fans alike, it also has its uses in less traditional environments. Gatorade has saved the lives of children in third-world countries suffering from diarrhea, and its concentrated powder has been a relief to American soldiers fighting abroad who are sick of the taste of water or need more salt in their diet. It has been offered as a homemade remedy for the common cold and menstrual cramps and can also be used as a toilet bowl cleaner and as bait for roach traps (along with sliced raw potatoes).

Gatorade plays an integral part in alcoholic drinks, such as the Anti-Freeze (Gatorade and vodka) and Green Crap (green Gatorade and gin), and is also used to prevent hangovers the next morning.

When I graduated from Roslyn Middle School, Gatorade came in only a few sizes and a handful of flavors, and the drink grossed about $800 million in sales for its parent company, Quaker Oats. Thirteen years later, there are more than 30 flavors in eight different bottles on the market worldwide, and the brand is sold in over 50 countries, with gross retail revenues surpassing $3 billion in the United States alone.

Over the past 40 years, more than a hundred sports drinks that hoped to compete with Gatorade have come and gone. Within the past 15 years, Gatorade has held off Coca-Cola's POWERade and Pepsi's All Sport. It has driven brands like Nautilus, Powerburst, Enduro, BodyAde, Dragonade, Starter Fluid, and Quenchade into extinction, in part because its own Gatorade Sports Science Institute has funded more than 100 studies that demonstrate the efficacy of its product and, sometimes, the lack of worth of its opponents.

It has not won the battle by engaging in price wars or changing the formula of the drink. Gatorade has prevailed because the product works and because those commanding its brand, for the most part, have stayed focused on the sports drinking occasion. These brand managers have developed innovative ways to break through the clutter-from tangible brand identification through its coolers to behind-the-scenes hard work with trainers and convenience store managers.

That's one of the reasons why Gatorade is virtually everywhere. It can be found every day in gas station store refrigerators in Seattle, Washington, on pretzel carts in New York City, and on supermarket shelves in Key West, Florida. Squeeze bottles filled with it can be seen in the hands of NFL players playing on well-groomed fields in front of more than 60,000 people and in the hands of young boys playing a pickup game on the rough concrete courts of Detroit, Michigan, in front of a crowd of six onlookers.

In 2000, Sue Wellington, then president of Quaker Oats's U.S. Beverage Division, said, "When we're done, tap water will be relegated to showers and washing dishes."

She wasn't kidding. Today, more than 100 billion ounces of Gatorade are sold in the United States each year, which means that approximately 12.2 million bottles of Gatorade, or 142 bottles per second, are sold in America every day.

But despite this dominance, the in-depth story of how the 40-year-old brand was conceived as a lab experiment and went from being an undesirable drink to an icon recognized throughout the world is relatively unknown.

In 2002, Gatorade commissioned a survey to discover just how many people knew about the drink's origin. Results revealed that 60 percent of the people polled didn't know that the concoction was invented at the University of Florida for its sports team, the Gators. In fact, 26 percent thought that the drink's name came from a fictitious inventor, "Dr. Lawrence Gator," and 2.1 percent thought the name came from the drink's secret ingredient-alligator juice. When given a range of choices, only 11.2 percent of those polled knew that the brand was nearly four decades old. This is a classic business story. It begins with four doctors-one of whom had recently come from Cuba with $5 in his pocket. They devise a sports drink formula as a side project, with the idea of solving a scientific riddle rather than making a mint.

Through a series of fortunate transactions, their invention finds its way into the hands of some very shrewd businesspeople, who craft a relevant strategy, learn to evolve over time, and stay one step ahead of those who are striving to grab a piece of the pie.

In the process, the story winds up mimicking the world of professional sports that Gatorade ultimately helped serve. This tale is one of teamwork and timing, but it is also wrapped in fortune and greed.

* * *

This account is based on the recollections of the people involved. In an effort to come up with the most accurate portrayal of events, individual memories, which are subjective, sometimes had to be reconciled. I believe that the vast number of people interviewed, combined with my judgment, has yielded the most truthful account possible regarding the elements of the Gatorade story written about in this book.

(Continues...)

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Excerpted from First in Thirst by Darren Rovell Copyright © 2006 by Darren Rovell. Excerpted by permission.
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