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The Gatorade Story: How a Drink Invented by Scientists Became a Multi-Billion Dollar Business

The story starts in the summer of 1965, with the University of Florida football team. At the time, football players were not allowed to drink water during practice and games, as coaches believed it would make them slow and sluggish.

Gatorade is one of the world’s most popular drinks. The bright-colored sports drink is ubiquitous at sports events and is favored by athletes and fitness enthusiasts all over the world. However, few people know the fascinating story behind the drink's invention and how it became a multi-billion-dollar business.

The story starts in the summer of 1965, with the University of Florida football team. At the time, football players were not allowed to drink water during practice and games, as coaches believed it would make them slow and sluggish. This practice resulted in severe dehydration among players, leading to a decline in performance on the field.

Florida football coach Ray Graves approached a group of scientists in the school's laboratory to come up with a solution to the players' dehydration. The scientists discovered that players were losing key electrolytes and body fluids as they sweated in the heat.

The group of four University of Florida scientists led by Dr. James Robert Cade then set out to create a drink that would help replace the fluids and electrolytes lost during exercise. After several iterations, they finally created a formula that contained water, sodium, potassium, and phosphate, which tasted slightly better than previous versions. However, the players still found it unpalatable.

The scientists added lemon juice, orange, and sugar to the formula, and the first version of Gatorade was born. The drink was immediately successful, with the freshman team beating the Varsity B team after drinking Gatorade at halftime of a scrimmage. The entire University of Florida football team soon began drinking Gatorade, and they quickly became known as a “second-half team” that would outlast its opponents after drinking Gatorade at halftime.

The team's success led to other football teams at the University of Richmond and Miami of Ohio ordering Gatorade, and the drink soon became a product that teams felt was necessary to win football games. The sports drink category was born, and Gatorade became its flagship product.

However, a bigger problem was brewing under the surface. Gatorade was becoming so popular that schools throughout the country wanted to order the drink, but the scientists did not know how to fulfill orders or ship the product, and they had no interest in running a business.

The four scientists approached the University of Florida in 1966 with an idea. They offered to sell the entire Gatorade product to the University for $10,000 in cash, which is equivalent to about $100,000 today, adjusted for inflation. However, the school declined the offer, and two of the scientists who developed the Gatorade product, Dana Shires and Alejandro de Quesada, left Florida and accepted jobs as assistant professors at the Indiana University School of Medicine.

At a Christmas party in 1966, Shires and de Quesada met executives from an Indianapolis-based canned bean company called Stokely-Van Camp. The executives were interested in the product and asked for samples. After trying batches of lemon-lime, orange, and grape flavors, they reached out to the scientists and wanted to turn Gatorade into a bigger business.

The four scientists who created Gatorade hired a lawyer to help them negotiate the deal with Stokely-Van Camp. The agreement included a royalty payment of one cent per gallon to the University of Florida for the use of the Gatorade name and logo. The scientists received a 10% royalty on sales, and the University of Florida received a 20% royalty.

Gatorade was officially launched in 1967, and the company started to market the drink to other sports teams and athletes. And in 1973, Gatorade signed a sponsorship deal with the NFL.

As Gatorade's popularity grew, so did the competition in the sports drink market. Competitors like Coca-Cola, PepsiCo, and Powerade all entered the market with their own variations of sports drinks, hoping to capture some of Gatorade's market share.

However, Gatorade remained the dominant player in the sports drink market, thanks in part to its strong branding and marketing efforts. The brand continued to sponsor some of the biggest sports leagues and athletes, helping to solidify its position as the go-to sports drink for athletes.

But Gatorade's success wasn't without its challenges. In 2010, the company faced a lawsuit over its claims that the drink could enhance athletic performance. The lawsuit alleged that Gatorade's claims were misleading and not supported by scientific evidence.

Gatorade ultimately settled the lawsuit and agreed to pay $300,000 in penalties and costs, as well as to stop making claims that its drink can enhance athletic performance without scientific evidence to support those claims.

Despite this setback, Gatorade continued to innovate and expand its product offerings. In recent years, the company has introduced new products like Gatorade Zero and Gatorade Bolt24, which offer low-sugar and organic options for health-conscious consumers.

Gatorade has also expanded its reach beyond the sports drink market, partnering with other companies to offer Gatorade-branded products like protein bars and energy chews.

Today, Gatorade is a multi-billion-dollar brand that continues to dominate the sports drink market. From its humble beginnings as a solution to the University of Florida football team's hydration problems to its position as a global sports drink giant, the Gatorade story is a testament to the power of innovation, entrepreneurship, and perseverance.

Austyn McFadden

Friday, March 17, 2023

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