37.5

To make the sale, this clothing company turned to tech

February 26, 2014: 11:49 AM ET

Cocona was making cutting-edge sports apparel, but its hippy-esque reputation held it back. A new, data-driven name -- 37.5 -- changed everything.

By Mary Catherine O'Connor

140226112413-adidas-terrex-ndosphere-jacket-with-37-5-cocona-tech-620xa

The target audience for Adidas' Terrex Ndosphere jacket, which uses 37.5 technology, isn't interested in coconut fibers.

FORTUNE -- Humans are basically sweat machines, it turns out.

"You might be sitting in an office right now, probably not doing much aerobic activity," Wesley Burgess, general manager of the yarn division of textile technology company 37.5, told this reporter -- who was, indeed, sitting in an office not doing much at all, aside from typing. "But you are sweating. And you would know that if you threw on a Hefty garbage bag, as a shirt, and wore that for 10 minutes. You'd be very uncomfortable."

In the early days of synthetic outerwear, most foul weather gear was made, essentially, of plastic bags. The rain stayed out, but your sweat stayed in. Then a laminate called Gore-Tex came along and changed the game, by allowing moisture generated inside the shell to vent out, despite a virtually waterproof veneer that repels rain and snow out. The market for apparel made with "waterproof-breathable" fabric -- which Gore-Tex is fiercely battling to retain, amid a growing field of competitors -- has grown to a billion dollars.

Now, a relative newbie in the "technical garment" world -- not just outer layers, but base layers, mid layers, and more recently even bedding and towels -- is shaking things up, armed with a technology that one-ups the incumbents and a rebranding campaign that traded a hippie-dippie name, Cocona, for a tech-first image and a new name, pronounced "thirty-seven five."

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That's 37.5 as in degrees Celsius, which the company says is the optimal core body temperature to maintain during exercise. It is also a reference to 37.5 percent relative humidity, which it, conveniently, also claims is the perfect amount of humidity for working out. Combined, these factors amount to a "microclimate" around our bodies that apparel made with the 37.5 technology is constantly working to maintain, says Burgess, because embedded inside the fibers are activated carbon particles that attract moisture and then expel it through an electrostatic reaction that vaporizes it. The goal is to keep the user dry and in a safe temperature range, and therefore comfortable, which in turn supports the athlete's performance.

"At 39.1 degrees [Celsius], your body shuts down, regardless of your level of training, motivation, et cetera," said Jeff Bowman, the company's CEO. "So you want that evaporation as close to the skin as possible. Plus, you won't get post-exercise chills."

The fabric technology -- which 37.5 has patented and licenses out to apparel makers that must use certified mills -- rests on two key elements: The properties of the activated carbon particles embedded in the yarn and a technique that encapsulates the particles to protect them during the manufacturing process. Without this coating, the molecular structure of the particles would be clogged up during the polymerization of the fibers. At the finishing stage, the coating on the particles is washed off, exposing the particles at the surface of the fabric.

Particle size is also important. Those used in the 37.5 process are at micron (that's one-millionth of a meter) scale, which means they have extremely large surface areas, all the better to absorb moisture the wearer generates and then dissipate it into the environment. Think of how long it might take a glass full of water to evaporate. Now, said Burgess, "imagine you took a cup of water and spread it out across a city block. It would evaporate much more quickly."

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Chemist Gregory Haggquist, who developed the technology and founded 37.5, stumbled upon the innovation accidentally. He had been working in R&D at Lexmark International, a company known best for its laser printers, developing a fabric to be used in photo processing. He found that certain types of activated carbon could not only reduce odors, his initial interest, but also attract and dissipate moisture impressively well. He left Lexmark and started working on manufacturing processes, using activated carbon derived from coconut shells. Thus, the name Cocona.

The company saw early success. In 2005, TIME magazine called Cannondale cycling apparel made with Cocona one of its "most amazing inventions of the year." But in subsequent years, outdoor apparel companies found that they had a hard time framing the technology in a way that attracted increasingly tech-focused consumers.

"People heard Cocona and thought it was all about Tommy Bahama on the beach drinking a piña colada," Haggquist said. When the branding agency he turned to for help suggested the name 37.5, based on the optimal microclimate concept, it was like a light turning on, he said.

More than 60 apparel brands including Adidas, Salomon, Under Armour (UA) and Trek already license 37.5's technology. Bauer, known for its hockey gear, is the first partner to begin licensing the company's technology after its rebrand, and is incorporating 37.5 technology into its products -- from base layers to training apparel to protective equipment. "Bauer has already exceeded their entire 2014 sales forecast by 20% after only the first month of the year," Bowman wrote in an e-mail. He added that he believes the rebrand is "absolutely a key to why we're seeing growth."

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"If you tell the right story, it starts to make sense. [Before the rebrand], you could ask 10 different people to describe the technology and you'd get 10 different responses," Haggquist said. "I don't know many rebrands that work, but this one sure did."

Why? It might have more to do with consumers' limited time and attention span than their science backgrounds, according to Ben Handel, an assistant professor of economics at the University of California, Berkeley who specializes in behavioral economics.

"If you have money to spare and are going to buy high-tech performance gear, you are typically busy and have to make many choices each day," he said. "As a result, you really can't be fully informed about all the things you're choosing and you might go with something that seems more technologically advanced" -- even if it's more expensive and even if you don't have intentions of comparing it to the performance to other products. In the case of 37.5, Handel observed, the use of the decimal point really amplifies a scientific pedigree.

B.J. Fogg, who directs Stanford's Behavior Design Lab, observed that the name and backstory of Cocona "suggests that it solves a problem for the environment, not the shopper." But 37.5 cleverly conveys "how this fabric solves a problem for me -- it keeps me at normal body temperature," he said. Plus, "outdoor sports enthusiasts are eager to augment their abilities by adding technology. The human plus machine meme harkens back to the Bionic Man -- better, faster stronger, all by adding technology to our fallible human bodies."

37.5's rebrand is just three months old, but the company has already received a warm reception by customers. "Prior to changing the brand name from Cocona to 37.5, our expectation was that we would lose at least 30% of business from 2013 to 2014," Bowman wrote in an e-mail. "Instead, we forecast growth for 2014 and are up over this time last year. Cocona's shipments through the first month of the year are 25% of the total yearly forecast." It's the kind of data the company had been looking for all along.

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