Walk into Clif Bar’s Berkeley headquarters, and you might think you’ve entered greenie-nonprofit world: multiple recycling stations, cruiser bikes kept for employees’ lunchtime use, and a fridge that serves as a pickup point for a local farm’s community-supported agriculture program. Vending machines peddle Amy’s Organic frozen meals and healthy snacks and drinks. A Coke machine provides the exception that proves the rule: Sustainability is a priority here.
Hard to believe this is the headquarters of a company with estimated revenues north of $150 million last year. But Clif Bar’s atypical in lots of ways. Owned by husband-and-wife team Gary Erickson and Kit Crawford, who serve as the 216-person company’s co-CEOs and its sole board members, it’s the only privately held company among the top 20 energy-bar brands. More significantly, it’s one of just 16 companies with an estimated $15 million or more in annual certified organic food sales that remain independent, according to Phil Howard, an assistant professor at Michigan State University who has studied the industry’s consolidation.
Big Food almost snatched Clif Bar once. In April 2000, after weeks of negotiation, Erickson walked away from a $120 million deal to sell the company he’d founded in 1992 to a major food conglomerate. (Rumors pegged Quaker as the suitor.) Everyone was telling him Clif Bar couldn’t compete unless he sold out: Just weeks earlier, Nestle USA had acquired No. 1 energy-bar maker Powerbar for around $400 million, and Kraft had digested Balance Bar for $268 million. “Erickson’s decision made absolutely no sense in strict economic terms,” says Howard. “Clif Bar’s resistance is unusual, and its values are key. Power Bar and Balance Bar didn’t have the same commitment to values.”
Clif Bar’s values are spelled out in the form of five “aspirations” plastered all over headquarters: to sustain its brands, business, people, community, and planet. But this quintuple bottom line isn’t just window (or rock-climbing wall) dressing. In 2001, long before “sustainable” became the buzzword du jour, Erickson hired a staff ecologist and launched a sustainability program for the company. All Clif Bar flavors were certified organic by 2003; other brands have varying levels of organic ingredients. In 2007, the company consumed 23 million pounds of organic ingredients. Through the Cool Commute Program, Clif Bar subsidizes eco-home improvements and bicycles, and pays $5,000 toward hybrid and biodiesel vehicle purchases. All the company’s own vehicles run on biodiesel. It pays employees to work out at the company gym and gives them paid time off, through its community service program known as 2080, to volunteer for organizations such as Habitat for Humanity and Meals on Wheels.
It can do all that and more because Erickson walked away from $60 million — his half of the proposed Quaker deal — to retain control, even though that meant mortgaging the company’s soul to pay his cofounder and then-CEO her half of the deal he’d dissed. Recently, I sat down with Erickson and Crawford to discuss why they chose to go their own way.
So many of your corporate peers sold out and keep doing so [see Howard’s charts]. Presumably some of them shared Clif Bar’s values. What’s the attraction, do you think?
Crawford: There are a million answers, but I think one of the simplest is money. You build a business up and then sell it to become rich, to go on to the next pursuit. My big question is, then what do you do? Because I think as humans, we all look for meaningful work.
Others, like Whole Foods Market, have gone public in order to get the capital to compete against the big guys, but they say they still are committed to their core values. If you were public, could you still focus on your five bottom lines?
Erickson: People ask us that question all the time, and I’m not convinced that you can in the way that we do it. If you don’t have to go public, then why do it? We have exponentially more freedom. The stuff we do here wouldn’t pass many public boards. For example, we started a women’s professional mountain bike team [Luna Chix]. It wasn’t cheap, and we don’t really get a whole lot of sponsorship money for it because we want to keep its integrity. I won’t tell you how much, but it costs us a lot. The board would be like, ‘You’re kidding!’ Lunafest [Clif Bar’s women-centric short-film festival] costs us several hundred thousand dollars a year. The programs we do here kind of don’t make conventional sense, but they’re working.
Is there something inherently antithetical about public corporations being sustainable? Why don’t more for-profit companies serve their other stakeholders?
Crawford: Almost all public companies started off privately. General Electric, Procter & Gamble. These were family-run businesses. That’s what we are. So when did it change? Is it about sharing it with other people, or is it about making money? You know, I don’t think corporate America is evil, or capitalism is evil — it can be a good thing, but people are people, and if you have the wrong people in leadership positions, that’s going to filter down through the company whether it’s private or public.
Sure. For example, the multinational commodity and livestock giant Cargill is privately held, family owned.
Crawford: Exactly. You can’t say that the public companies are the bad guys. It just depends how they’re run.
What are some of the areas where you feel like you need to improve, to become more sustainable?
Erickson: Well, we’re experimenting all the time, with everything from our employee culture benefits to ingredients and so on. It’s on all fronts: understanding our sourcing better, and packaging. We’ve come a long way on our packaging, but we still have some hurdles to get over. Our community service program keeps getting better — we try stuff, we learn. It’s a constant.
Right now, 70 percent of all your ingredients are organic. Are you aiming for 100 percent?
Erickson: Definitely. As organic farming continues to expand, the spectrum and quality of available organic ingredients continues to increase. We are always on the lookout for new suppliers and new high-quality ingredients that will meet both our extensive screening process and our year-round demand. Each supplier we work with goes through an extensive screening process for quality. Additionally, we have a supplier code of conduct that we share with all of our suppliers — a Clif code that speaks to our thoughts and values in regards to legal, social, and environmental responsibility.
You live in Napa on a small organic farm and now you’ve started the Clif Bar Family Winery, which buys grapes from sustainable growers and also helps those who want to transition to organic practices. Aren’t you busy enough being co-CEOs?
Crawford: Just like when we look back on the debt we got into [to buy out the former partner], if we knew then what we know now, we’d probably be way more freaked out. It’s the same with the winery. Innocently, we’re like, ‘Oh yeah! We’re up there, we love wine, let’s do this.’ Pretty soon we realized, ‘Wow, this is a big operation, and every state has different laws about alcohol. Maybe we should have been more paranoid.’ But we just jump in headfirst.
