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- [00:11]
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It's 1972, and nearly five dozen people are dialing into this same conference call. They're the members of the Gatorade Trust, a group formed by Gatorade's original inventors and early backers. What started as just nine people has since grown to 46 members, and each of them receives a percentage of the royalties from every gallon of Gatorade sold. By now, this adds up to real money. But on this call, the trust faces an uncomfortable decision whether to accept a settlement that gives part of these royalties to the University of Florida. No one on the line is happy about this possibility, because years earlier, the university had its chance and passed. When Gatorade's primary inventor, Dr. Robert Cade, first approached the school about helping develop Gatorade as a business, the university said no. So Cade and his team of researchers took the formula elsewhere, eventually partnering with the food and beverage company Stokely. Van Camp and Stokely ran with it. They launched Gatorade as a supplier and sponsor for sports teams around the country and then pushed it into supermarkets nationwide. By 1972, Cade estimates that the trust is earning somewhere between $25,000 and two and a half million dollars a year, or between $200,000 and $19 million today. That's when the University of Florida reconsidered their position. The school sued the Gatorade Trust for back payments and a share of future royalties. Then the situation got messier. The US Government stepped in, arguing that because federal grants helped fund the original research, they also had a legitimate claim on Gatorade. Now the legal bills are piling up, the royalties are frozen in escrow, and the trust is split. Some members say it's time to settle, while others urge their fellow trustees to keep fighting. On the conference call, kidney researcher Dana Shires clears his throat. He's been part of Gatorade since day one. Hi, everyone. Dana here. I have just come from a meeting with our lawyer. I think we've got terms we can live with going forward. The University of Florida would get 20% of our royalties, plus 20% in back pay. So up front, we'd write a check for just under a quarter million. Oh, come on. You gotta be kidding me. Another Gatorade co founder, Eugene Tubbs speaks up. We tried to give Gatorade to those bastards back in 67. They didn't want it. I know, I know. But while this lawsuit drags on, none of us are getting paid. Everything's tied up in escrow. Besides, 20% of our cut works out to about a penny per gallon. Wouldn't you pay that just to make all this nonsense go away? Not so sure. Plus, here's a real win. We wouldn't have to pay the government a dime. All they'd require is that we publish our findings as a public service. Won't publishing mean every Tom, Dick and Harry can copy the Gatorade recipe? Yes, but I've talked to the executives at Stokely. They say they don't care about the formula. What they care about is keeping the rights to the Gatorade trademark after University reclaimed the Gatorade name. We'd be sunk. This way, we can still keep selling Gatorade as Gatorade, but I don't want to be the only voice here. Dr. Cade, what do you think? There's silence on the line. In the years since this legal fight began, no one has opposed the university's claim more fiercely than Dr. Cade. He remembers asking them for help and being turned away. He believes the school should have to live with that decision. He's even threatened to leave the school over how he's been treated. But so far, he hasn't done it. Finally, Cade speaks. Well, Dana, I think you got a point. I'd love to keep rubbing their nose in the mistake, but I think it's time to move on. The members of the trust vote to settle with the school. With a legal fight behind them, the path is wide open for Gatorade to forge ahead. Stokely Van Camp has big plans to expand the sports drink into new markets. More teams, more athletes, and more active people around the world. But Gatorade won't have the field to itself for long. Competition is coming, whether they like it or not. You're listening. Ad free on audible.
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From audible originals, I'm david brown and this is business wars. In our last episode, a team of kidney doctors at the University of Florida set out to solve a simple problem. How to keep their football players from collapsing in the Florida heat. The electrolyte solution they created became Gatorade. And in a few short years, it went from a lab experiment to a multi million dollar brand. By the 1970s, Gatorade wasn't just the leader in sports hydration, it was sports hydration. There was no real competition, no close second. But that dominance won't last forever. As rival circle and pressure mounts, Gatorade will be forced to reinvent itself once again and begin a high stakes quest to win over the most influential athlete in the world. This is episode two, Be Like Mike. It's July 1975, and a new commercial has just hit the TV airwaves. The spot starts with the director calling action. A stuntman playing a cowboy takes a punch to the face and is thrown through a stained glass window. After the take, the stuntman sits up dizzy and disheveled, while the director decides whether he needs to go again. Rex, you look like you'd use some Gatorade. Gatorade Thirst Quencher helps replace what your body is thirsty for. Give your body what it's thirsty for. Ready for day 28. Gatorade. The ad is playful and illustrates an evolving marketing shift for Gatorade. In the beginning, Gatorade was showcased as a sports drink. It's been on NFL sidelines, sold at golf courses and athletic clubs. It's even on the track at the Indy 500. But offering relief to Hollywood stuntmen. That says Gatorade isn't just for athletes. It's for any active person. Some executives at Stokely Van Camp, Gatorade's parent company, have been advocating for this approach for years. They want the beverage to become a household name and a household product. The ad and the broader approach work throughout the 1970s and into the early 80s. Gatorade grows by double digit percentages. By the end of 1982, it's generating $100 million in annual revenue for Stokely Van Camp. And this growth catches the eye of two rival food conglomerates, Pillsbury and Quaker Oats. Pillsbury's interest in Stokely Van Camp stems from its canned and frozen food operations. Remember, before Stokely started making Gatorade, it was better known for its shelf stable veggies and pork and beans. And even though Pillsbury is best known for its baking products and that giggling doughboy. It also owns a massive frozen and canned food empire of its own. Green Giant. And now Pillsbury wants even more of the veggie market share. Acquiring Stokely is a way for them to corner the market on frozen food. Gatorade. That's just an added bonus. Pillsbury moves quickly. In June 1983, the company buys up 18% of Stokely Van Camp stock, an opening move that looks like an attempted hostile takeover. Stokely's executive leadership resists, urging their board members not to sell any more stock. But it's unclear if they'll be able to hold off their corporate raiders forever. Quaker Oats, meanwhile, is also interested in acquiring Stokely, but for very different reasons. In the summer of 1983, the $2.7 billion food giant experiences its first quarterly loss in years. According to analysts, the breakfast market is stagnating. People are eating all the oatmeal and cereal they're gonna eat. Which spells big trouble for Quaker. When a company this big stumbles, the search begins for answers, for leverage, for a move to big enough to change the narrative. Quaker Oats needs just such a power move. And that's when they notice Pillsbury circling Stokely Van Camp. So Quaker swoops in with a counter offer. $77 a share, significantly higher than Pillsbury's offer of $62 a share. Then, to sweeten the pot, Quaker Quaker adds another provision to their offer. They want to acquire the rights to manufacture Gatorade. Even if the larger acquisition deal falls through. To Quaker, Gatorade isn't some side dish. It's a chance to expand their core business beyond the breakfast table and into an entirely new category. Many analysts wonder if Quaker is overpaying. But Quaker thinks it's a risk worth taking. A move that lets them stick it to their rival Pillsbury and seize a new product category. Sounds like a win win. Stokely Vancamp's board agrees. They're happy to escape Pillsbury's hostile takeover, and at a much higher price point to boot. So they shake on it. In July 1983, Quaker acquires Stokely for $269 million, about 875 million today, along with the rights to Gatorade. On paper, the deal looks perfect. Quaker has scale, marketing muscle, and global reach. If anyone can take Gatorade to the next level, it's them. But success isn't guaranteed. After all, Quaker once dominated the breakfast table until growth flattened out. And unless Gatorade can keep rising, the same fate could be waiting for them.
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I'm Indira Varma, and in the latest season of the Spy who, we open the file on Larry Chin, the spy who outplayed Nixon. For decades, Chin was embedded deep inside U.S. intelligence. Then comes an opportunity. Richard Nixon's secret plan to reopen relations with China. Information Chin can place directly into Mao's hands. But the CIA has a weapon of their own, a Chinese mole ready to defect. How long until Qin's gig is up? Follow the Spy who Now Wherever you listen to podcasts.
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It's October 1984, and NFL coach Bill Parcells is is stressed. It's his second season as head coach of the New York Giants, and the clock is already ticking. His team only won three games last year, and this season isn't going much better. The giants are currently 4 4, with a tough matchup against Washington ahead. Parcells knows that if the team drops to a losing record, he's probably gone, so he spends the week pushing his football players to work harder. Parcells is especially tough on nose tackle Jim Burt. He taunts Burt during practice, makes him stay late for extra drills. After the rest of the teams hit the showers, Burt does everything Parcells asks of him. But one day as he's leaving practice, he stops by Parcells office. Hey, Coach, you've been going pretty hard on us. Well, I just want everyone to know this game is important. Oh, I know. Don't worry, I can take it. I just hope you can take it when the time comes. Parcells doesn't know what Bert's talking about, but he chuckles anyway. Sunday comes, and the Giants hard work pays off. They beat Washington 37 to 13. But as the game is coming to a close, Jim Burt sees his chance for revenge. He walks over to the massive orange Gatorade cooler on the sidelines. And just as Parcells starts grinning, a second player douses him with another Gatorade cooler. This moment marks the first recorded Gatorade bath in history, but it's far from the last. Just one month later, the Bears coach Mike Ditka gets a Gatorade bath after a 343 win against the Vikings during their 1986 season, the Giants turned the Gatorade bath into an art form, soaking Parcells week after week. It buoys the team all the way to a Super bowl win during the team's playoff run. Quakers, head of sports marketing, even sends Coach Parcells a letter with a $1,000 Brooks Brothers gift certificate to replace his Gatorade soaked clothes. As coaches are getting drenched, Gatorade's revenues are soaring. By 1985, just two years after Quaker's acquisition, Gatorade sales have doubled and the drink has become Quaker's number one product. Gatorade is now more valuable to the company than cereal. If Quaker is looking for the ceiling on electrolyte sports drinks, they haven't found it yet. But they know Gatorade's days as the only game in town are almost certainly numbered. And sooner or later, they'll have to face the biggest soft drink company on planet Earth. It's February 1991. In a bar in North Carolina, Bill Schmidt slowly rotates a pint glass in his hand. Schmidt is tall, with a round, wide face and a retired athlete's build. He's a former Olympian, a bronze medalist in the javelin, and now the head of sports marketing at Quaker Oats. It's his job to sign big name talent to endorse products like Gatorade. Schmidt watches as the bald man sitting across from him scribbles a number on a bar napkin. That man is a high powered sports agent named David Falk. And the number he's scribbling down is the endorsement fee for his client, Michael Jordan. This is actually the second time Gatorade has pursued Jordan as spokesperson. Six years ago, in 1985, the brand's executives hoped to snag the basketball star coming off his rookie season. The pairing made sense. For starters, Jordan already drank Gatorade. Plus, Quaker's worldwide headquarters are in Chicago, home of Jordan's team, the Bulls. But when Quaker approached Jordan as a rookie, his asking price was $300,000 a year, three times Gatorade's annual marketing budget. So the deal slipped away. Instead, as Jordan grew to become the most dominant player in the NBA, he went on to sign an exclusive six year contract with the beverage giant Coca Cola. It was a blow to Gatorade and a major win for Coke. Having missed the boat on Jordan, Gatorade pivoted to a different kind of ad campaign, one that centered on the everyday customer doing everyday, active things like yard work or playing tennis. The campaign featured an instantly catchy jingle, Gatorade is Thursday for that beat down body thirst. The First Aid campaign was a huge success for Gatorade. Between 1985 and 1990, sales of the sports drink nearly tripled from $220 million to almost 600 million per year. And in one 1987 survey, nearly 80% of customers connected the Thirst Aid slogan with Gatorade. But then in 1990, Gatorade was forced to retire the campaign In a hurry, an advertising firm not connected to Gatorade sued for trademark infringement, claiming that Thirst Aid belonged to them. And now that Gatorade is so ubiquitous, they were no longer able to use the slogan. A judge agreed. Essentially, Gatorade made the slogan too famous. Now, this is a weird problem, but a very real one. When a brand idea works, it's tempting to push it everywhere, forever. But ownership matters. And shortcuts around trademarks can come back to bite you. Even a blockbuster like this one that becomes part of your brand. It's a reminder that success can sometimes magnify those small decisions you might not have worried much about when, once upon a time, it seemed too good an idea to let it get away. Now Quaker is out eight figures in damages, and Gatorade needs a new advertising strategy fast. They need a layup, a slam dunk. They need Michael Jordan. And Jordan's agent is about to test how much. Falk slides the bar napkin over to Schmidt, who stares at the numbers in disbelief. It reads 10 years. Seven figures per year. Schmidt's stomach drops. Gatorade passed on Jordan at $300,000. Now his asking fee is more than 10 million. And Gatorade will have to decide if it's ready to bet everything on the greatest athlete in the world. Schmidt knows Quaker's leadership won't have much time to decide, because David Falk hasn't just offered this deal to Gatorade, he's offered it to Coca Cola, too. The terms are steep. 10 years, 13.5 million guaranteed. The equivalent of about $32 million today. And because Jordan is still under his existing contract with Coke for a few more months, Coca Cola has time to match or even surpass the offer. Inside Quaker Oats, the debate is fierce. Is a deal like this even worth it for Gatorade? After all, Coca Cola will always be able to outspend them. Coke is a mega corporation. It dwarfs Quaker oats. They're worth 50 billion to Quakers 5. And besides, some executives argue Gatorade isn't desperate. It's true that thirst 8 has gone, but there are other plays to make. For example, Gatorade has just become an official sponsor of Major League Baseball and has been running ads featuring Chicago Cubs pitcher Greg Maddux. If the company passes on Jordan, it'll have more money for ads like this. And why should Gatorade worry when it still owns the sports drink market? The brand is currently commanding between 90 and 95% of the product sector, with no other sports drink claiming more than 1%. Oh, sure, a few upstart brands are out there with names like Snap Up, Powerburst and Ultrafuel. But so far not a one has come close to touching Gatorade's crown. But Bill Schmidt knows what can happen when brands get complacent. They leave room for their opponents to step in. And right now, two of the biggest beverage companies on earth are making moves. Pepsi has test launched a carbonated sports beverage called Mountain Dew Sport. And they're not being subtle about their target either. With a sparkling taste that leaves Gatorade flat flavor Gator New Mountain Dew Sport, the sports drink you'll want to drink. In the commercial, the pro athlete Bo Jackson sprints past an alligator on the track, jukes him on the basketball court and hurdles him on the football field. Message received. And Pepsi isn't alone. Coca Cola is quietly rolling out its latest stab at a sports drink. An eerily familiar Gatorade like product called Powerade. So far, it's only available in fountain form at convenience stores like Seven Eleven. But Coke is hoping to get it onto grocery shelves soon. A blue chip spokesperson like Jordan, that could give Powerade the legitimacy it needs at exactly the right moment to topple Gatorade. Schmidt understands what's really on the line. This isn't about an endorsement deal. It's about whether Gatorade stays untouchable or whether this is the moment the giants finally catch up. It's the spring of 1991, and two companies are wooing the same man, Michael Jordan. Quaker wants him for Gatorade. Coke wants him for Powerade. Both companies have put in their offers through the sealed bidding process his agent demanded. Quaker has met Jordan's terms. 13.5 million over 10 years. And Quaker has guaranteed the figure. Jordan will still have a deal even if he retires from basketball. And Quaker sports marketing chief Bill Schmidt has thrown in another prize to sweeten the exclusivity. If Jordan signs, he'll be Gatorade's exclusive, as in only spokesperson. Schmidt knows Jordan's competitive streak and he's betting this will matter to the star. One Quaker marketing executive dubs it the Secretariat strategy. Putting all your money on a single horse. Meanwhile, Coca Cola is taking a different approach. The company has dozens of celebrities on its payroll, from Whitney Houston to Wayne Gretzky. Coke is spreading their sponsorship money around too, rather than going all in on Michael Jordan, which also means his asking price looks excessive, at least for Coke's budget. So Coca Cola blinks. They offer Jordan five years at high, six figures per year. It's respectable, but it's nowhere near $13.5 million. Coke's terms say we want Jordan on our team, but not leading it. Jordan chooses Gatorade over Powerade. For the next decade, he will be the one and only face of Gatorade. So what do you make of this? Should Coke have shot a little higher? Sure, you could say Coke didn't need a Michael Jordan as much as Gatorade did. But what if Coke had played it a little harder? You know, business wars aren't won or lost with smart offensive moves alone. There's the defensive play, too. Every advantage you lock up is one less weapon your competitor can use against you. 13.5 million too much for Koch to pay. Or the weapon that got away in the end. Gatorade did what Coke wouldn't and landed a pro like Jordan at the peak of his pop culture powers. Not just a win for Gatorade, but a lost opportunity for Coke. With Michael Jordan locked in, Gatorade's advertising agency gets to work. The pressure's on to create an iconic ad to introduce Gatorade's new superstar spokesman. The ad firm has even brought back their former creative chief to help with a campaign. A legendary ad man named Bernie Pitzel. Pitzel's a middle aged dad with bushy eyebrows and a ready smile. But when he sees one of the first spots his team has whipped up, his smile disappears. What is this? What did I just watch?
- [26:41]
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You didn't like it?
- [26:43]
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Are you kidding? That looked like a Nike ad. Just a supercut of Jordan dunking.
- [26:49]
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Well, he is Michael Jordan. Why wouldn't we show him dunking?
- [26:54]
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It's been done before, a million Times.
- [26:58]
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With respect, Mr. Pitzel, all the top brass at Quaker approved it. They love it.
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I don't care. We gotta change it.
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Okay. Mm. But just so you know, it's due in three days.
- [27:13]
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Then I'll go put on some coffee. Pitzel spends the first of those three days with total writer's block. He struggles to find a unique idea, something worthy of Michael Jordan. But then he overhears his son listening to Disney's the Jungle Book. He listens to the jazzy scat inspired song I want to be like you. And something clicks. Pitzel dashes off to his favorite restaurant, trusty notebook in hand. He's got an idea. It's August 1991 at Quaker's headquarters in Chicago. Two thousand employees have gathered in the parking lot. Coolers of Gatorade are stationed everywhere. The company is about to unveil their brand new commercial featuring. Featuring Their brand new, very expensive spokesperson. Anticipation is high. This spot has been kept under wraps for months. Everyone wants to know what the ad looks like. Then, on a large projection screen, the commercial plays. The ad begins with Jordan on an NBA court and then cuts to shots of regular kids on a neighborhood basketball court doing their best impressions of Air Jordan. The superstar is alongside them, helping the youngest ones with their dribbling and jump shots. In between plays, Jordan's on the sidelines drinking Gatorade. And despite Jordan being the ad's big star, the focus isn't just on him. It's on the kids emulating their hero. They want to be like Mike. As soon as the ad stops playing, a buzz of conversation rises in the employee parking lot. The song is brilliantly catchy, but even better than that, it captures a feeling. By drinking Gatorade, a regular person can feel like the star athletes they idolize. It isn't just about greatness, it's about aspiration. It drives home the idea that this sports drink is isn't just for high performing athletes. It's for everyone. And everyone is a pretty big target market. Now let's pause for a second, because what you're about to see is the ultimate flex play for any endorsement. It's one thing to pay a superstar to sing your praises. That happens all the time. But if that superstar can connect your brand to a world of everyday Joes, that's marketing magic. But you can't expect Jordan to take a swig and make it happen. Someone in advertising has to figure out how to put that picture in a frame and make it work like a mirror. This won't work if Jordan's some distant superstar. But by adding an aspirational tone to the right subtle messaging, that superstar can seem a whole lot more like like the very best version of an everyday you. In the end, it's pure Madison Avenue abracadabra. The Be Like Mike ad starts airing nationwide in August 1991. At first, sales are slow to respond, but culturally, the Be Like Mike spot explodes and becomes a phenomenon. It runs on tv, radio, in movie theaters. It's everywhere. It even changes Jordan's name. Before the ad, he was known as Michael or Air or Jordan. But now, for the first time in his career, callers into sports radio shows are referring to Jordan as Mike. As for the competition, it doesn't stop, but it does stumble. Coca Cola takes another year to release Powerade in bottle form, which it finally debuts in limited markets in the summer of 1992. Meanwhile, baseball star Bo Jackson isn't enough to save Pepsi's Mountain Dew sport. Turns out people don't want to drink soda when they're trying to exercise. So Pepsi rebrands the drink as all sport and tries to regroup. By the time the electrolyte sports drink market reaches $1 billion, Gatorade still commands 90% of it. Industry experts are watching this sector with interest. With Powerade finally on supermarket shelves and Pepsi investing in Allsport, forecasters say the sports drink race is heating up. They predict that in the 1990s, sports drinks will become the new front lines in the cola wars. But then Gatorade learns they have a new problem, and it has to do with its $13.5 million spokesperson. It's October 1993 in Miami, Florida, and Quaker's sports marketing chief, Bill Schmidt is riding high. Earlier that day, he played 18 holes of golf with Michael Jordan. And now the two of them are headed to a luxury NFL suite to watch the Dolphins game. It's been two and a half years since Schmidt first sat across from Jordan's agent in a bar, staring at a seven figure number written on a napkin. And so far, the partnership has flourished. Jordan has filmed 14 commercials for Gatorade, and Schmidt has taken care of his star on every commercial shoot. He's hired the caterer who serves Jordan's favorite chili, and he's made sure that Jordan's trailer always contains a gift box stuffed with Cuban cigars. The expense is worth it to make Jordan feel valued and appreciated. Gatorade's dedication to Jordan goes deeper than a box of Monte Cristos. Earlier in 1993, when news of Jordan's seven figure gambling habit first broke, Gatorade stuck by him. Quaker's spokesperson told the press, we feel very good about our association with Michael Jordan. Once Schmidt and Jordan make it to the stadium, they walk to the Quaker Oats luxury suite to watch the Dolphins play. Schmidt heads to the buffet line to grab some food. And that's when Jordan pulls him aside. Jordan tells Schmidt quietly that he plans to retire. The announcement will come in just a few days. Schmidt forces a smile on his face and congratulates him. But inside, his stomach drops. Jordan is less than three years into his ten year endorsement contract. Gatorade didn't just sign an athlete. They built their entire marketing strategy around him. There is no bigger sports figure than Jordan anywhere in the world. And now, just as Coke and Pepsi are ramping up their attacks, Jordan is stepping away from the game. In fact, Powerade is making progress on the very field where Gatorade got its start college football. They're even taking a page from Gatorade's playbooks and equipping high profile college stadiums with coolers full of Powerade free of charge. But that's not all. Both Coke and Pepsi are ramping up their celebrity ad campaigns, and they have Gatorade squarely in their sights. With Jordan on the sidelines and the soda giants closing in, Gatorade suddenly looks vulnerable for the first time in years. The industry leader might be about to take a. From Audible Originals this is Episode two of Gatorade Sweats the Competition for Business Wars. A quick note about recreations you've been hearing in most cases, we can't know exactly what was said at the time. Those scenes are dramatizations, but they are based on research and if you'd like to check out more, we recommend first in How Gatorade Turned the Science of Sweat into a Cult Cultural Phenomenon by Darren Rovelle. And you'll never guess how the Super Bowl Gatorade Bath started by Jerry Barca For Forbes, I'm your host David Brown. Katie Clark Gray wrote this story. Voice acting by Chloe Elmore. Our senior producers are Jenny Bloom and Emily Frost. Our producer is Tristan Donovan of yellowand. Karen Lowe is our producer Emeritus. Our Managing producer is Desi Blaylock. Fact checking by Alyssa Jungpeng. Our lead sound designer is Kyle Randall. Sound design by Ryan Potesta Executive Producer for Audible Jenny Lauer Beckman, Head of Creative Development at Audible Kate Navin, head of Audible Originals North America Marshall Louie Chief Content Officer Rachel Gyazza Copyright 2026 by Audible Originals, LLC Sound recording Copyright 2026 by Audible Originates, LLC. Follow Business wars on the Audible app or wherever you get your podcasts. You can listen to all episodes of Business wars ad free by joining Audible.