A Great Case Study For CGOs: The 10-Yr Innovation Journey Of Gatorade’s Gx Ecosystem

In 2013, the Brazilian World Cup Soccer Team asked Gatorade how it could optimize team member performance in preparation for the 2014 World Cup, with formulas customized based on each athlete’s unique hydration needs. Since then, Gatorade and New York based Smart Design, the product and service design consultancy, have collaborated through 8 phases of a highly iterative process to envision, develop, and optimize an ecosystem of new product and services known as Gatorade Gx. Each iteration revealed pivotal learnings Chief Growth Officers in nearly any field can benefit from. What follows is a synthesis of highlights based on interviews with key players on the Gatorade and Smart Design teams, and independent research.

Foundational Hypothesis

The basis for the new ecosystem was the hypothesis that each athlete is unique, with different rates of sweating and sweat content lost. If individual sweat profiles could be determined, physical and digital products and services could be built around them. Gatorade’s vision was two-fold:

1) Short-term: Utilize intuitive design, cutting-edge technology, and the latest in sports science from Gatorade’s Sports Science Institute to boost the Brazilian team’s World Cup performance.

2) Longer-term: Deliver personalized products and services at scale, democratizing lab-based sweat tests, metrics and personalization thousands of pros already rely on, so everyday athletes could also maximize their performance.

According to Xavi Cortadellas, Gatorade Head of Innovation and Design, “The Gx System evolves how Gatorade serves athletes, now offering intelligence to help them make choices about everything from fueling plans, to training, and recovery.”

Initiating an ambitious innovation program can be daunting, but according to Tucker Fort, Partner at Smart Design, “The most important thing is to start quickly with a hypothesis based on business assets and brand values and supported by broader macro trends. The hypothesis doesn’t need to be perfect, but it must envision a compelling future state and allow for shorter term experiments to build confidence. A strong hypothesis, such as “Every athlete is unique” is more than one good idea. It’s a theme or direction that can inspire many viable short and long-term solutions, even a whole eco-system.”

Key Elements of the Gx Ecosystem

Gx Sweat Patch & Sweat Profile

The Gx Sweat Patch is a disposable, low-cost, wearable diagnostic patch that measures the amount an athlete sweats (in volume) and the concentration of sodium in that sweat, creating a personalized sweat profile for recommendations.

Gx App and Supporting Algorithms

The Gx App is a free, native mobile app that leverages athlete profile information, sport specific training plans, environmental conditions, and proprietary algorithms to provide personalized daily recommendations for pre-hydration, in-activity, and recovery fueling.

Gx Pods and Gx Bottle

Gx Pods and the Gx Bottle provide convenient and sustainably-minded sports fueling. The Gx Bottle can be personalized with an athlete’s name, number, and/or team graphics at Gatorade.com. Gx Squeeze Bottle is the #1 best-selling item at the leading U.S. sporting goods retailer across all sales categories for the past 2 years. The pods and bottles have been a hit on social media, earning over 500 million views on TikTok, and doubling the female purchase rate. There is magic in watching the concentrated pods mix with water in the bottles and many female Gen Z and Gen Xers have made them a fashion statement, even matching nail polish to their pink and purple bottle colors. Purchase of Gatorade sports equipment, defined as non-consumables, has gone from 1/3 female, 2/3rds male, to 52% female and 48% male.

Smart Gx Bottle

The Smart Gx Bottles use sensors to track personal hydration throughout the day, and via LEDs communicate an athlete’s personalized hydration status based on personal recommendations and goals.

Gx Station and API

The Gx Station is a connected locker room kiosk that allows professional sports teams to track athlete weight, measure fluid loss, and make personalized recovery recommendations. It integrates with the Kinduct Athlete Management System and has been used by professional teams in the NFL, NBA, MLB, NHL, and Premier League Soccer.

Strategic Ecosystem Benefits

The Gx ecosystem provides many strategic, business-building opportunities that can:

• Further position Gatorade as a sports science leader, innovator, and brand used by professional athletes
• Create PepsiCo’s first direct-to-consumer, e-commerce business, paving the way for other PepsiCo brands
• Expand the Gatorade line to include:
• other consumable products (pods, powders, tablets, formulas)
• non-consumable products (customizable bottles, jugs, coolers, towels)
• services (apps with training, nutrition, and hydrating guidance)
• Communicate in new, direct, credible ways with consumers
• Expand the user base among different athlete cohorts: youth, high school, forever, 30-plus, endurance, marathon, ironman, competitive athletes, female teens, soccer moms, & thirsty kids
• Increase Gatorade’s buzz-worthy factor, making it cool, relevant, and not a commodity.
• Add value, increase purchase interest, and up-price for better margins on products like bottles
• Expand distribution of the broader product range in new channels like sporting goods (Dick’s), and new aisles of existing retailers like Target, Walmart, and Kroger

These benefits extend Gatorade’s brand equity into adjacent market segments. As Xavi Cortadellas shared, Gatorade expanded its:

• Competitive set and market segments from sports beverage to the broader sports performance and wellness segments
• Usage occasions increased from hydrating only during exercise, to optimizing sports performance more holistically on a 24/7 basis

The 5 Most Valuable Learnings From the Journey

1. Power of Pilots

Hypothesis Driven, Pilot Based Test & Learn Process

At 8 different stages in the development journey, the team checked in with consumers. They call them pilots rather than tests because the latter connote passing and failing. Since creating a new eco-system is so complex, it helps to slice the task into digestible bites and tackle one problem at a time. Often different teams worked on each problem, i.e., data collection, app user onboarding, sweat patch testing. Then the dots are connected into a cohesive solution, so all parts work together.

According to John Anderson, Executive Technology Director, Smart Design, “Pilots never go the way you want, but you always come out of them with invaluable insights. If you try to learn too much, you end up with noise, an inch deep and a mile wide. It’s crucial to know what you’re trying to learn and run the pilot with that in mind. The best learning happens in the field or at sports academies with real athletes, not in the lab. Every iteration should include a tight feedback loop where the concept is put into a pilot situation and observed, to inform the next concept iteration.”

Step one of the entire project was testing the sweat of each of the Brazil National team’s 23 players. It confirmed each athlete’s sweat rate and composition was different and set the ball rolling.

As Drew Palin, Senior Director of Marketing at Gatorade shared, “There were 20 different iterations just for onboarding the app and scanning the patch. Innovation comes down to constant iteration piloting and knowing it won’t be perfect right away, but that eventually you’ll reach a place you really feel good about. Inflection points can only reveal themselves if you test a lot of hypotheses. The combination of piloting, iteration, and having the design chops to be able to put different stimuli out there, enables the team to get the right learning, empathy, and insights.”

Examples of Gx pilot learning “happy accidents,” and process refinements included:

• The unexpectedly huge popularity of low-tech bottle personalization (names, colors, teams, numbers), as they became a statement of identity and creativity for athletes. The “ah ha” came when players put masking tape and their names on bottles with their unique formulas during COVID.
• What personalization means for each target varies. It turned out high school students care most about flavor variety, while professional athletes value carb and electrolyte formula customization more.
• In the pilot phase, anything users saw had to be as realistic as possible, but much of the back-end tech did not need to be perfect or fully featured.
• During app onboarding, high school athletes skipped past text heavy information screens that explained daily and practice modes. Enabling users to select personal color-coded lights for each mode, made onboarding more engaging and easily remembered.
• Conducting the pilots publicly generated lots of excitement among consumers and the scientific community. At the Super Bowl and NBA All-Star games, Gatorade took consumers through pro-style training sessions with versions of the Gx system still in development. As Eric Freese, Principal Scientist at the Gatorade Sports Science Institute shared, “the Institute took the unusual step of publishing their research results within the scientific community, in order to understand reactions of scientific peers and substantiate the science behind the system.”

2. Getting the Tech Right

Technical Challenges For Engineering, Science, and User Experience

Throughout its ambitious quest, Gatorade faced numerous challenges that required an integrated approach through a team of internal and external experts. The all-star development team spanned mechanical engineering, software development, data security, sports science, design, and microfluidics. The technical challenges for Gatorade were to:

• Sample an athlete’s sweat inexpensively, simply, and unobtrusively, and transfer the data to the cloud seamlessly and in real time. The patches had to be light-weight, wearable, and flexible, like Band-Aids.
• Make the patch readable when taken with the opposite hand from many angles, against a range of skin tones, under different light conditions, using optical recognition software.
• Create a connected, multi-platform digital experience and embed IoT devices and kiosk touchpoints with responsive web apps and SMS messaging.
• Take the familiar Gx Bottle, and “under the hood” seamlessly integrate sensors, microprocessors, LED indicators, batteries, wireless connectivity, and make it waterproof.
• Mock up prototypes using bleeding edge technology, quickly and well enough so they seemed to consumer testers like they were already in production.

3. Navigating Large Organizations

Generating Excitement and Managing Expectations Of A Company Around A Big, New Vision

To succeed with radical transformation in a large organization, Xavi Cortadellas is a proponent of the 5 concentric circles approach to bringing key stakeholders on board to believe in and support the vision. The 5 stakeholder groups include in sequential order:

1. The core team, at the center, who must demonstrate passion and knowledge about what they’re proposing.
2. A cross-functional team of internal and external stakeholders who will do the work
3. Business leadership who will support the endeavor with proper resources
4. The rest of the company to be excited about the vision and progress
5. Consumers. Informing them through activations, like those done at high schools and the Superbowl, creates excitement that can spread organically via social platforms.

As Xavi shared, “Instead of the core team working in an isolated lab, it’s important to let members of each circle in, to participate in the process, share the excitement, and be ambassadors for the idea. Allowing each circle to participate in the journey makes the project’s energy and excitement contagious.”

Communicating the Complex

Marketing Communication

Different targets value different features and need different marketing information and language/terminology. Explanations should be more educational for amateurs vs. pros who are used to getting what they’re going to eat and drink prescribed by trainers, coaches, and nutritionists. Consumers have different use cases, expectations, and base level knowledge.

Drew Palin explained that one of the biggest challenges they faced was taking complex sports science and distilling it in ways different athlete types can digest. Xavi Cortadellas shared that “If you introduce something that’s super complicated to use, everyday athletes will not engage or adopt it. Conversely, if it’s too simple for pro athletes, that probably won’t work either. For younger kids in middle school, the communication needs to be fun, playful, and cool. For high school kids, key motivators are the customization options, like team, colors, name and number, bottle design, or Pro Athlete collaboration bottles (Messi, Jayson Tatum). The Milliliter specific recommendations that pros need, would be overkill for amateurs.”

5. Measuring Success

Key Success Metrics

There are many ways to measure success of an initiative like Gx. Quantitative, and strategic metrics include:

• Brand image and “trust in Gatorade” as a science based athletic partner.
• First mover advantage on new personalized sports fuel products, services, and technology.
• News value and earned media across cohort communities.
• Repeat purchase of all Gx system elements.
• Sales per point of distribution in new retail outlets like Dick’s and Target.
• Reports from teams and individuals on performance improvements prior to and after adopting Gx, including anecdotal comments from athletes on social media.
• Social sharing of the customized bottle designs.
• E-commerce sales.
• Increase in, and the nature of direct interactions with target consumers.

What’s Next

What’s Could Be Next In Gatorade’s Future

Gatorade will never be content to rest on its laurels and there are competitors constantly trying to attack their dominance. In the future, one might imagine an even more friction-free, accessible, less invasive way to collect sweat profile data.

To take advantage of the momentum and maximize growth opportunities, the management of Gx was recently split into two separate units: Digital Ecosystems including Gatorade.com and the Gx App, and Athletic Equipment (non-consumable sweat patches, bottles, coolers).

Key Take-Aways For Chief Growth Officers, Marketers and R&D Teams

• Creating a new ecosystem that can revolutionize an established business involves a strategic vision based on trends, a real consumer problem for a wide audience, and new, ownable, superior technology and IP. All are essential.
• Developing a complex new ecosystem requires patience, slicing tasks into bite size chunks, and designing focused pilots to understand concept pinch points. Early on, it’s important to identify constraints that can affect consumer usage.
• Marketing communication needs to focus on features at the heart of what each target group wants, in language each understands.
• Exceptional cross-functional, partner agency, and supplier talent, collaboration, and mutual respect are key.
• Increasingly, new tech is coming into the world through fairly simple, highly visible devices (like the sweat patch), that leverage behind them vast systems of databases, algorithms, connectivity, and careful design, to provide sophisticated consumer benefits.
• Managing the 5 concentric circles of stakeholders is vital, not only to generate excitement and support, but also to keep expectations realistic.