Clif's Edge

CLIF BAR FOUNDER GARY ERICKSON STAYED AHEAD OF HIS COMPETITION BY NOT GOING PUBLIC AND USING GRASSROOTS MARKETING TECHNIQUES.

The year is 1990. Gary Erickson is nearing the end of a 175-mile cycling marathon. He's eaten five PowerBars to keep up his energy, and, frankly, he can't stand to eat the last one.

"Bike racers never complained about the taste of PowerBars," he says in his 2004 autobiography, Raising the Bar: Integrity and Passion in Life and Business. "We thought they were the bitter pills we needed to swallow to help us perform."

The day of the ride, Erickson - the co-owner of a bakery - thought, "I can make something better than this."

Flash forward 19 years. Scrumptious flavors like chocolate almond fudge, cranberry apple cherry and spiced pumpkin pie line the shelves of grocery, sporting goods and health food stores, thanks to the efforts of Erickson.

Before Erickson launched Clif Bars in 1992, he didn't know a lot about nutrition. After doing research and experimenting in the kitchen, he soon realized most bars were bad for a reason other than taste: highly processed ingredients. He started learning more about natural alternatives (rice syrup instead of sugar or corn syrup) and sourcing ingredients that weren't sprayed with pesticides, in an effort to create natural and organic bars.

Today, 70% of ingredients used in Clif Bars are organically grown; all are certified kosher; and none contain animal products, dairy, wheat or genetically modified ingredients. In addition, Clif Bars have 23 vitamins and minerals.

Two to three months after Clif Bar (named for Erickson's father, who introduced him to outdoor sports) launched, the products were being sold by 700 bike retailers (the bars originally targeted athletes, but have since evolved into a general healthy snack). In the first year, sales reached $700,000. In 1994, there were two employees. Today, there are 230.

Although the energy bars quickly gained devotees, Erickson knew they wouldn't sell just by word of mouth. He took to the road visiting sports events - many of which were attended by as few as 200 people - where he handed out samples and information. "Big companies won't compete at that level," Erickson says.

The company also began sponsoring up-and-coming athletes in order to get cost-effective endorsements. "We would rather sponsor someone who comes in second place and is humble, than an arrogant first-place winner," Erickson says. The company now sponsors more than 2,000 amateurs and pros in everything from surfing to skiing.

Clif Bars quickly became a hot item at health food stores, where Erickson says customers were used to sweets "that tasted like dirt." He started adding natural food events to his marketing repertoire, but in 1995 he decided he needed more help spreading the word. He recruited a friend to develop a guerrilla campaign that would generate buzz without spending a lot of money. Soon, Clif Bar & Company regional field marketing reps were hiring temporary teams to attend a wider variety of events. The team now supports about 500 events a year.

Women also emerged as a major customer base, but they wanted a nutrition bar "more geared to their lifestyle - lower in calories and with ingredients essential to women, such as calcium, iron and folic acid," Erickson says. When Luna launched in 1999, he expected it would bring in $1.5 million the first year with less than $200,000 in advertising.

The real number turned out to be $10 million - and could have been a lot more had the bakery not reached capacity. The current marketing program includes supporting the first professional women's mountain bike team, a traveling women's film festival and the Breast Cancer Fund, which aims to identify and eliminate environmental causes of breast cancer.

In April 2000 - after eight straight years of growth - Erickson contemplated selling his company to Quaker Oats for $120 million. Although sales the year before were $40 million, Erickson was worried about the new marketing muscle of his major competitors, PowerBar and Balance Bar, which had been bought by Nestlé and Kraft, respectively. But just before he signed on the dotted line, he said he wanted to walk around the block and think it over once more.

When he returned, he told the investment bankers that he couldn't sell because he was concerned that the new owner wouldn't adhere to the guidelines for healthy and environmentally-friendly ingredients that had built Clif Bar's fiercely loyal customer base. The bankers thought he was insane, and his partner demanded he buy her out.

Today, his decision doesn't look so crazy. The Berkeley, CA-based company - privately held by Erickson and his wife Kit Crawford (co-CEO since 2007) - has double-digit sales growth, with revenues of nearly $200 million. And a constant stream of new products, including mini-bars for kids, has successfully extended the brand.

The near-sale of his company taught Erickson a valuable lesson: to listen to his gut. "When I was about to walk away from Clif Bar, I had been relying on the logical part of my brain, the conventional wisdom… that said we couldn't survive without the help of a large food conglomerate," he says. "Once I started listening to the emotional side of my brain, I had more clarity and knew keeping the company private was the best decision for me, my family and Clif Bar."

Erickson advises other entrepreneurs who have a specific vision - for him, it's his dedication to natural ingredients and the environment - not to be tempted into going public if they don't have to. "The freedom you give up isn't worth it," he says.

With this autonomy, Erickson can work to improve the company as he see fits, mainly by expanding its product lines. The newest addition is a sugar-free, 88% organic, electrolyte-filled energy drink that Clif Bar touts as healthier than other sports drinks.

The day of that bike fateful ride in 1990, a sugar-free sports drink - let alone carrot cake or pear apple strudel Clif Bars - weren't even options for athletes like Erickson. And now, rather than suffer through awful-tasting bars on his rides, he can't decide which flavor to eat first.

CLIF NOTES

FOUNDER GARY ERICKSON EXPLAINS CLIF BAR'S FUNDAMENTAL PHILOSOPHY - AND IT'S ABOUT MORE THAN JUST MAKING TASTY ENERGY BARS.

On a bike ride in 1986 - before the marathon that sparked Clif Bar - Gary Erickson saw that the big roads on the map - marked in red - were the most direct, while white roads were the small, meandering ones. He realized then that the journey was as important as the goal, a philosophy that underlies Clif Bar.

"Companies on the red road listen to a lot of noise: the market, shareholders, the board, economic consultants, advisers and conventional wisdom. Clif Bar is a white road company," he says.

Central to this "white road" idea are what he calls the Five Aspirations, which provide "a holistic approach to the business that goes beyond profits," he says. The company seeks to sustain:

THE PLANET, by using recycled materials and partnering with organizations like Greenhouse Network and 1% For The Planet

THE COMMUNITY, by starting a climate program to help build wind turbines in local communities

THE EMPLOYEES, by providing wellness benefits like free nutritional counseling

THE BUSINESS, by growing slower and better

THE BRANDS, by making what people actually need without compromising quality