Clif Bar - A Model Of Growth

Gary Erickson had a problem. He was an outdoor enthusiast in need of nourishment but stuck with a stale tasting Powerbar he could not bring himself to eat.

A seemingly simple problem, but one that becomes much larger for an entrepreneur. You either accept the mediocre product dominating the market or you get up and challenge Goliath with one of your own. Erickson, then the owner of a bakery, went to his mother's kitchen and created a great tasting energy bar for athlete's like himself. He turned his homemade creation into a nutritional powerhouse sold nationwide. The most amazing aspects of Clif Bar's ascent in the market is it's lack of outside funding, slow and organic growth dictated by the founder, and a rich pay day from Quaker that was refused.

As I have mentioned before, listening and selling directly to your customer is essential in discovering the best product. Erickson and his wife went to marathons, triathlons, and bike races talking to the very athlete's who needed their bar most. Great taste was the kicker but the functional value of the bar is what sold. Using little advertising, the company chose to grow organically with the founder keeping control throughout the process. Word of mouth is the most powerful form of marketing that exists and it can be very fast in certain circles. Athletes proved to be one of those circles.

There was a little luck involved in Clif Bar's success as the company started getting big just as a national demand wave started sweeping the country for nutritional foods and supplements. The company now found their product featured prominently in supermarkets as well as the small specialty stores to which they owed their start. Everything came to fruition through revenue. Erickson cut deals with his distributors for discounts in exchange for cash on delivery and was able to pay suppliers out of incoming revenue. It is because of this excellent money management that he found the coveted control.

When QUAKER came calling with a big buyout offer, temptation certainly struck but the offer was ultimately turned down. There seem to be two types of entrepreneurs. Some want to start a business to cash-out while others want to run the company as long as they are able. There is nothing wrong with either type it just comes down to a matter of personal preference. If the business is successful, money will be made in both scenarios. Ultimately, you are either OK with prolonged gratification or not.

Clif Bar is a rare example of this level of success but one that is as good a case study as any on small business growth into national brand. The expansion was slow, controlled, and done on revenue.