On Clif Bar and Mountain Climbing

Gary Erickson is the founder and co-owner of Clif Bar, a maker of energy snacks based in Berkeley, California. frog’s Director of Product Strategy, Adam Richardson, sat down with Gary to talk about the history of the company, how they stay competitive and innovative, and how they maintain their vision and values.

How did Clif Bar get started?

Clif Bar started vocationally: I was a cyclist, I raced bicycles, I owned a bakery, and I worked in the bike industry. And I wanted a better energy bar, for myself.

I had an “epiphany ride” which got me started on the whole idea. I’d set out with a friend on a ride that ended up being 175 miles in a day, which I wasn’t expecting, and I’d only packed six energy bars (Powerbar at the time). At the 125 mile mark I needed to eat. I was at the top of Mount Hamilton and I was out of energy, but I just couldn’t stomach another bar. So I rode down the mountain twenty miles, stopped at a 7-11, and bought some powdered donuts.

So Clif Bar really emerged out of this pain, as do many innovations.

In your book, Raising the Bar, you talk about two different styles of climbing, alpine climbing and “siege-style” expedition climbing. How are these an analogy for how you run Clif Bar as a business?

It’s a personal choice. The big difference is with alpine climbing you have a few buddies, you’re climbing on your own, you don’t have sherpas and porters helping you out. With siege-style climbing you have a more planned approach and a large support team, and your route is mapped out ahead of time.

With alpine climbing, you can be more spontaneous. You pretty much have a plan but not a lot of backup. This means you can change your route and choice of what you want to do quite spontaneously.

What I like about the lightweight approach is the pure unadulterated freedom. We all came into this world and at some point we get to make a personal choice about what we want to do with our lives.

There are some people out there who want to tell you how you should climb this mountain of business. Since my wife and I are the sole owners of Clif Bar, we can take the risks, we can screw it up, but it’s our choice. We have this freedom to do that. We’re not stupid, we’re going to listen to people, but in the end it’s our choice about how to do it. We can choose even what our return on investment is going to be, as opposed to if we were a public company, where we would be getting told what that return should be. These expectations affect everything: the company culture, what you’re going to do next. You live by quarterly numbers. We don’t. But that doesn’t mean we don’t want to make a profit.

It’s like Jim Collins says in Good to Great, money and profit are like blood and water. You don’t live for them but you can’t exist without them.

You’ve got to have passion for what you do. Staying private has allowed us to ignore the outside noise, ignore conventional wisdom.

In 2000, your two biggest competitors were bought by large food conglomerates. Powerbar was bought by Nestle, and Kraft bought Balance Bar. You were in talks to be acquired also. Yet you walked away from the deal and sent them home. Talk about what that was like and why you made that difficult choice.

At age 43, I had the choice to retire with $60 million wired into my account, and I literally made the decision at the last minute to walk away. It was like walking away from the altar; I just decided that Clif Bar was my thing and I wasn’t done yet.

The hard part was, I was 50% partner. There are probably some people who are reading this who are in partnerships themselves who don’t have a partnership agreement, and I just want to say that there will quite possibly be a day of reckoning. It just happened to some friends of mine who were partners: they had a difference of opinion about company direction, it blew up, they brought lawyers in, and now they’re not on speaking terms. This is was what happened with our partnership too. My partner, who had started Clif Bar with me, wanted to sell the company. I finally woke up and saw that this wasn’t about our partnership, but about what’s right for Clif Bar.

Today we are a much bigger - and better - company than we were back in 2000. We’re almost five times the size now. We’ve done that all with cash flow and debt. And we had to buy out my partner, which came to almost $75 million including interest, bank debt, mezzanine funding and so on. We put it all on the line, but it was worth it and we’re going to make it.

We still have our freedom. We own the company 100% and this has allowed us to do things we wouldn’t have done otherwise. For example, we have a big green initiative, we do community service, we’ve gone largely organic (70% of everything we make is organic), and we invest a lot in our employees.

We have three full-time trainers, a gym, yoga....

I saw a car being washed in the parking lot when I came in.

Yes, we have a car washing service, and a concierge service, and a wellness program.