Fresh Ingredients And Ideas: CLIF Bar & Company

Lessons from a snack company that became a leader in the organic, progressive food movement by defining success as more than a monetary bottom line.

 
 

Organic brown rice syrup. Soy rice crisps. Organic rolled and toasted oats. Chocolate chips. Organic cane syrup. Chicory extract. Date paste. Milled flaxseed. Lemon juice concentrate.

This could be good. Then again, it might be an acquired taste. Maybe it’s not something you crave nightly for dessert, but when you need refreshment and energy after a day of hiking, rock climbing, or mountain biking, this combination does more than hit the spot — it satisfies, sustains, and pushes you forward.

The natural, pronounceable foods listed above are just a selection of what’s included in a chocolate chip CLIF bar. But it’s a whole different set of ingredients that make CLIF Bar & Company a leader in the country’s organic, progressive food movement.

The Epiphany

CLIF Bar & Company CEO Gary Erickson knows exactly when his life’s interests and experiences aligned to inspire him to form a snack company. In 1990, the former baker and avowed outdoor enthusiast set out on a daylong, 175-mile bicycle ride. He packed several brands of energy bars, but each sample proved more disappointing than the last. Finally, Erickson came to a life-altering realization: “I can make a better bar than this.” After two years of tinkering with recipes in his mother’s kitchen, Erickson created a product that not only met the physical needs of a body involved in intense activity but also taste pretty darn good, too. In 1991, Erickson debuted his CLIF bar at the Interbike trade show.

clif-barErickson named the company after his father, Clifford, who Erickson describes as “my childhood hero and companion throughout the Sierra Nevada Mountains.” A friend drew the line art depiction of a rock climber dangling on the underside of a steep, craggy incline that would move from simple product label to eventual corporate logo. Outdoor athletes primarily contributed to CLIF’s first-year sales of $700,000. From there, word of mouth and a growing awareness of healthy food helped double sales each year for the next several years until in 1997 revenue surpassed $20 million. As of 2012, the company has achieved a 10-year compounded annual growth rate of 23%, according to Triple Pundit.

Credit Union Lesson: “I can make a better bar than this.” The product might change but the sentiment remains the same. It was a scrappy entrepreneur who identified a need that larger corporations were ignoring and launched CLIF Bar & Company. Likewise, the first credit union members formed financial cooperatives because the institutions of the day were unable or unwilling to meet the needs of a significant portion of the population. In both cases, rather than accepting a sub-par offering, somebody decided to do something. Credit unions are an entrepreneurial approach to financial services, and they need to make that clear to consumers frustrated by the offerings and practices of large, for-profit banks.

Success For Sale

Multinational conglomerate Quaker Oats came calling in 2000. The company’s portfolio already included LIFE & Cap’n Crunch breakfast cereals, Rice-A-Roni, and Gatorade, and an energy food like CLIF Bar was a natural fit. At the time, larger companies were absorbing health food startups left and right. Erickson initially agreed to a $120 million buyout, which would have made him a wealthy man.  

But the sale weighed heavy on Erickson. In explaining how he made his ultimate decision, Erickson describes a European biking trip he took in the Alps.  “I could either take the red roads, which were ugly highways, and get to my destination quicker or take the white roads, which were rustic, scenic paths. … In the end, I chose the white roads and saw some of the most beautiful sights on earth.”

Erickson opted not to sell. In 2012, he told the Chicago Maroon: “People said, ‘But you could have done so many things with that money.’ But we can do so much more with the power of our company, our brands, our people.”

Credit Union Lesson: Credit union boards and management do not make decisions to fatten their wallets. Erickson’s focus on what CLIF Bar & Company could do with its people and its brand reflects the cooperative belief that serving the people should be the top priority for major decisions. Although mergers can and do offer tremendous benefits to member-owners, it is critical that leaders make sure the benefits on the other side of the transaction line up with the organization’s founding principles.

Many credit unions have explored the option to go public — i.e., convert to bank — yet came to the decision that staying a credit union was the best choice. In exploring such conversion options, the board, management, and member-owners are exercising appropriate due diligence while staying true to their core.

7 CORE PRINCIPLES; 5 BOTTOM LINES

Cooperatives around the world generally operate according to seven principles that hearken back to the first "modern" cooperative, which was founded in  Rochdale, England, in 1844.  And as CLIF's five bottom lines illustrate, those principles still resonate nearly 170 years later in today's business landscape.

CORE PRINCIPLE BOTTOM LINES
1. Voluntary And Open Membership Sustain The People
2. Democratic Member Control Sustain The Brand
3. Members' Economic Participation Sustain The Business
4. Autonomy And Independence  
5. Education, Training, And Information  
6. Cooperation Among Cooperatives Sustain The Community
7. Concern For Community Sustain The Planet

Five Aspirations

Success has a million different definitions. CLIF Bar filters its definition of success through five basic aspirations that Erickson and his team developed to guide their growth and expansion.

The organization encourages its employees to consider the subject of each of its five bottom lines — business, brand, people, community, and planet — when approaching opportunities, making decisions, and solving problems. There is no emphasis on one versus another. The approach allows everyone to experience and benefit from the company’s development. Consumers enjoy new products like healthy lunchbox snacks for kids and free nutritional podcasts. The company explores new opportunities with a regional wine offering.  Employees, who own 20% of the company, build an enterprise that reflects their values, such as a commitment to health and fitness. The company and its employees develop long-term relationships with organic farmers and give back to struggling communities through food bank contributions, natural disaster relief efforts, and school donations. Each year the company’s annual report reviews and defines success using the five aspirations as the guiding principles.  

Credit Union Lesson:  Core values should be simple and consistent.  Everyone from the front-line employees to the longest-serving member-owner should understand and communicate them. Credit unions should measure progress and success every year using a scale everyone understands. For example, Wright-Patt Credit Union balances what’s best for its three stakeholders: Members, Employees, Institution. Some decisions benefit one stakeholder more than the other two, but at the end of the year all three understand how the individual successes of one benefits all.

 

 

 

Jan. 14, 2013


Comments

 
 
 
  • One of the more relevant case studies from creditunions.com. Nice job.
    Anonymous