Clif Bar All-Aspirations Report 2014

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Welcome to the 2014 All Aspirations Annual Report The idea for Clif started on a 175-mile bike ride, and 22 years later the spirit of adventure remains core to our company's identity. True adventure is more than pushing your physical limits or getting out of your comfort zone—it expands your awareness of the world. In 2014, we invited Clif people to hike and cycle with us in two places that have been especially important to us for more than 30 years. In August we backpacked with 14 people in Yosemite’s High Country. Over eight days we hiked more than 40 miles and weathered hail, lightening, and an inquisitive bear. In October we cycled in Northern Italy’s Dolomites with 10 other employees, climbing more than 30,000 feet in nine days, with all the joy (and pain) that kind of adventure brings. In November, the two of us returned to the Langtang region of Nepal, where Gary first trekked 32 years ago. Journeying to these three locations proved, as always, to be life changing and life affirming. Challenging ourselves, helping one another, and working in small groups to reach our goals in such awe-inspiring landscapes reminds us of what’s important and allows us to recalibrate body, mind, and soul. How do we more deeply integrate the spirit of adventure into our company? Do we give ourselves the chance to be comfortable with discomfort? Reflect on what matters? Our journey so far has been full of adventure: Over the past 20 years, we turned down the option to sell our company and go public, transitioned to organic (we now make 17 brands with organic ingredients), launched the first all-women’s pro mountain biking team, committed to climate neutrality, adopted a Five Aspirations business model, built a LEED platinum headquarters with an on-site child care center, introduced the Clif Bar Family Foundation and Seed Matters, became family- and employee-owned, and continued to explore new ways to build a healthier, more just and sustainable food system. As we move into 2015, we’ll continue to embrace opportunities to get out of our comfort zone, develop new relationships, be informed by new perspectives, and build a life-affirming business.

Kit and Gary Owners and Chief Visionary Officers, Clif Bar & Company

Kit and Gary trekking in the Langtang region, Nepal.

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At Clif Bar & Company, we gauge our success on not one but five bottom lines. We have come to call them our Five Aspirations. Sustaining Our Business, Our Brands, Our People, Our Community, and the Planet.


Building a Sustainable Food System As a father to three young sons, I pay close attention to their development, activity level, and diet. Food is one of my greatest concerns—specifically, keeping toxic chemicals out of their cups and off their plates. Each year in the U.S., industrial agriculture sprays more than 1 billion pounds of pesticides. Cancer, Parkinson’s, reproductive issues, ADHD, asthma, autism, birth defects, and other issues have all been linked to pesticides. It’s clear that we need a better food system, one that’s built on health, soul, and purpose, not just profit and convenience. Pesticides don’t stay where they’re sprayed. They drift in the air, run into streams, leech into groundwater, and end up in our oceans, our food, and our bodies. Pesticides kill pests, but they also hurt the good guys—farmers, farmworkers, and farm communities as well as bees, birds, and beneficial insects. Ecosystems are complex, living structures and when you damage the cornerstones, the whole thing comes down. We need a new food system that’s self-supporting and restorative, one that can feed 9 billion people without degrading the planet. We need a food system based on organic farming. Organic agriculture supports cleaner air and water, biodiversity, and more nutritious foods. It does not allow the use of toxic persistent pesticides, synthetic fertilizers, GMOs, or sewage sludge. Unfortunately, today less than 1% of the world’s agriculture is certified organic. Clif Bar is going to increase that number. We started our organic journey 13 years ago when we purchased our first 2 million pounds of organic grains, nuts, and fruits. By the end of 2014, we’ve purchased more than half a billion pounds of organic ingredients. Clif Bar is collaborating with growers, producers, policy makers, educational institutions, and the public to build a healthy food system that works in partnership with nature. Through our Seed Matters program, we’re starting where farming starts: with seed. Organic plant breeding creates seed that produces more resilient crops with improved nutritional value while increasing yields. Now more than ever, business must serve as a catalyst for improving the world. Leaders must put their companies in service to things that matter. We hope you’ll join us.

Kevin Cleary CEO Clif Bar & Company

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Prohibits GMOs: Certified organic foods are grown, produced, and pro-

Multiple Benefits of Organic Food and Farming

cessed without the use of GMOs.

Avoids Toxic, Persistent Pesticides, and Synthetic Fertilizers: Organic farmers do not use toxic, persistent pesticides, synthetic fertilizers, artificial hormones, or sewage sludge. Instead of using synthetic chemicals, organic farmers use ecological practices like crop rotation to improve soil fertility and avoid pests and disease.

Supports Healthy Rural Communities: Organic farming reduces the exposure of farmers, farmworkers, and neighboring communities to toxic chemicals.

Protects Biodiversity: Organic agriculture enhances biodiversity, providing natural habitats for birds and beneficial insects, including pollinators. Biodiversity is essential to ecosystem health. Helps Fight Climate Change: Organic farming is a powerful tool in the fight against global warming. Organic farming reduces the use of fossil fuel energy and stores carbon in the soil instead of releasing it into the atmosphere. Scientists increasingly recognize soil carbon storage as a key part of the climate solution. And the USDA organic seal is the only third-party, regulated label enforced by law with public transparency in reporting noncompliance.

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Our

BUSINESS

Organic ingredients (million pounds)

BUILDING A RESILIENT COMPANY, INVESTING ƒor THE LONG TERM

100 90 80 70 60 50 40 30

Investing in Organic Our Increasing Use of Organic Ingredients

20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

97+ million pounds

In 2014, we bought more than 97 million pounds of organic ingredients, bringing our total purchase of organic to date to 522 million pounds. Investing in organic is investing in a more sustainable food future. Learn more from one of our organic oat farmers, Brian Krumm, at Farmers Speak at clifbar.com.

Five Aspirations business model

Running a company based on Five Aspirations—Sustaining Our Business, Our Brands, Our People, Our Community, and the Planet—is a challenging way to do business. It means balancing investments for the long term, creating brands with integrity, helping our employees thrive, empowering our communities, and conserving and restoring the resources we depend on. It requires that each of us be fully engaged every step of the way. 4


FAMILY- AND EMPLOYEE-OWNED

“oUR VISIoN HAS ALWaYS BEEN To Do BUSINEsS IN A DIFFERENT WAY” –Kit Crawford

In 2014, we launched a new adventure: designing a bakery from the ground up based on our Five Aspirations business model. We’re pleased to be building in Twin Falls, Idaho, a community that shares many of Clif Bar’s values. Our 275,000-square-foot, state-of-the-art facility will reflect our deep commitment to the planet by focusing on zero waste and energy efficiency. We’ll capture heat where it otherwise would be wasted and use it in the preparation of our energy bars. And unlike more conventional operations, ours will also make abundant use of natural light. We break ground in 2015.

BUSINESS 2014 by the NUMBERS

Growing a Bakery in Idaho

16% 522 10-year compounded annual growth rate

million pounds

organic purchased to date

35% of market share in the Health and Lifestyle Bar category 5


Our

BRANDS CREATING BRANDS WITH INTEGRITY, QUALITY, and AUTHENTICITY

A BUSINESS THAT’S BORN ON A BICYCLE IS BOUND FOR AN UNCONVENTIONAL JOURNEY The Next Generation of Sports Nutrition In 2014, we combined inspiration and ingredients to formulate a new level of nutrition for athletes. Informed by the home recipes of Team Clif Bar athletes, CLIF Organic Energy Food is made from USDA-certified organic, gluten-free ingredients such as sunflower seed butter (a vegan source of protein), bananas, sweet potatoes, and ginger. Nutrition comes from the ingredients themselves (nothing fortified). • Sweet recipes, intended for activities of one hour or more, contain quickly absorbed carbohydrates that rapidly deliver energy to muscles. • Savory flavors are made mostly of complex carbohydrates with some protein and fat (from sunflower seed butter or olive oil) and provide energy in a slower, more sustained way for activities lasting two hours or more. All flavors come in a resealable pouch (a category first for sports nutrition) and are free of partially hydrogenated oils, high fructose corn syrup, artificial flavors, and synthetic preservatives.

Food crafted for performance to feed body, mind, and spirit 6


CLIF Organic Trail Mix Bar Dark chocolate, pomegranate, raspberry… need we say more? Yes: CLIF’s Organic Trail Mix Bar is also certified organic. And it’s gluten free, made from fruits and nuts, and comes in seven inspired flavors.

More

NEW

Flavors

Did you know? All LUNA bars are now gluten free, addressing the real needs of real people:

BRANDS 2014 by the NUMBERS

“YES!! So awesome! Thanks so much LUNA for going gluten free! Now that’s a great gift if I’ve ever seen one.”

# among energy bars*1 CLIF Bar is

*According to the Harris Poll EquiTrend, which measures and compares the brand health of more than 1,500 brands in over 50 categories.

89%

of our product line is certified organic

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Our

BRANDS CREATING BRANDS WITH INTEGRITY, QUALITY, and AUTHENTICITY

LUNAFEST entered its 14th year, showing at 150+ venues and for the first time, on cable TV. The annual traveling festival of short films by, for, and about women offers female filmmakers a national platform for their work.

1,094 women’s nonprofit organizations have benefited from LUNAFEST®

100% of every dollar raised goes to local

nonprofits and the Breast Cancer Fund

950 films submitted this year

LUNA Cheers on Runners at Nike® Women’s Half Marathon In 2014, our ninth year of working the Nike Women’s Half Marathon, we offered “cheer” cards that friends and family could customdesign to encourage runners. This year, 15,000 ran in Washington D.C. and 25,000 in San Francisco. Thirty-nine Clif employees ran the San Francisco race and Clif’s Kris Klotzbach came in 10th out of 25,000!

Food crafted to feed and inspire the adventure in all of us 8


CLIF Builder’s Sponsors the Spartan Race CLIF Builder’s sponsors the Spartan Race, a series of obstacle races ranging in intensity from the Spartan Sprint (3+ miles and 15+ obstacles) to the Spartan Beast (12+ miles and 25+ obstacles), which are designed to get people physically active and inspired to challenge themselves.

NEW flavor

Jon Albon, a CLIF-sponsored athlete from the UK, won the 2014 Spartan Race World Championship in Vermont.

Clif’s own Meaghan Praznik completed the Spartan Race Ultra Beast in Killington, Vermont: 37 miles, 80+ obstacles, ~16,000 feet of elevation gain. Eighty percent didn’t finish, but Meaghan finished fourth.

How Many Ways Can We Meet the Moment?

Meet the Moment®—it’s our rallying cry to get out there, get moving, and celebrate inspiring moments along the way. In 2014, we printed 20 Adventure Challenges (“change your altitude, get your feet wet, start at sunset”) on more than 1 million CLIF Bar packages to remind all of us to discover new routes, journeys, and places. Every time someone shared their own adventure via #MeetTheMoment, CLIF donated $1 to one of seven nonprofits that are working to protect the places where we love to play.

e Max Riv

BRANDS 2014 by the NUMBERS

Chris Burkard

$82,122 $2.5M was donated to 7 nonprofits, thanks to 82,122 MEET THE MOMENT participants

raised to date by LUNAFEST for the Breast Cancer Fund and local women’s nonprofit organizations 9


Our

PEOPLE WORKING SIDE BY SIDE, ENCOURAGING EACH OTHER, OUR COMPANY is OUR PEOPLE

In September, we celebrated our 13th annual epiphany ride in honor of the 175-mile cycling adventure that inspired Gary to launch Clif Bar.

REDEFINING A “TYPICAL DAY IN THE OFFICE”— EVERY DAY

Adventures with Gary and Kit Ten lucky Clif people joined Kit and Gary in the Italian Dolomites to cycle some of their favorite routes. Over nine days, the group rode more than 320 miles, climbed more than 30,000 feet, overnighted in a castle, and threw a mini-dance party at the top of the 7,000-foot Passo Fedaia.

Fourteen Clif people hiked more than 40 miles in eight days in Yosemite’s High Country with Gary and Kit. Two groups started in Tuolumne Meadows (altitude 8,600 feet); climbed more than 10,000 feet; crossed multiple passes; survived rain, hail, thunder, lightning, and a curious bear; and hiked through canyons and past peaks that most Yosemite visitors never see.

“Clif is an extension of my life

and my values—I'm not checking those things in at the door every day and picking my life back up when I get off work.… We pick each other up when we're down or struggling and, similarly, we support each other's passions and interests and celebrate our individual and collective successes.” –Employee quote from 2014 “Great Place to Work®” survey. Clif Bar & Company ranked #12 in Fortune magazine's Best Workplaces issue.

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People Are Our Priority We exceeded our goal for internal hiring by filling 30% of open positions (23 positions) from within.

Clif’s White Road Academy helps employees discover and develop their strengths. Through our Peak Leadership training, Clif’s leaders are encouraged to grow as individuals who can run a different kind of company, one that’s “grounded in values, inspired by our vision, driven to succeed, and passionate about the success of our people.” –Kevin Cleary, CEO

After seven years with Clif Bar & Company, employees are offered a sabbatical—six paid weeks off. Clif’s National and State Parks Benefit Program reimburses employees for the cost of annual park passes in the U.S. and Canada.

Fifty-two new people joined the company in 2014 and turnover remained low at less than 3%.

At Clif, Our Culture Matters People cheer each other on through both good and trying times: The brand team held a dancea-thon to support a fellow team member and raise funds for the Leukemia & Lymphoma Society.

2 great Clif benefits = 1 excellent adventure On his sabbatical, John Lozano and his wife spent 21 days visiting the Craters of the Moon, Grand Teton, Devils Tower, Yellowstone, Glacier Park, Mount Rushmore, and more. What did he think? “It was like a second honeymoon. We got to know each other again. My wife Erica was beside herself with joy at the sound of rain pouring down on the tent as we camped at the lava beds of Craters of the Moon.”

Dogs still help us to stay loose.

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Clif kids attend Clif Base Camp, our on-site child care center.

PEOPLE 2014 by the NUMBERS

Clif people admired each other’s artwork at the annual employees’ art exhibit.

392 36 10,541 employees

(59.4% female, 25% minorities)

sabbaticals (29 first + 7 second)

training hours logged 11


Our

COMMUNITY PROMOTING HEALTHY, SUSTAINABLE COMMUNITIES, LOCAL and GLOBAL

CHANGE HAPPENS WHEN WE REALIZE THAT WHAT WE DO MAKES A DIFFERENCE How We Give Back with Time, Money, and Experience

Bringing business skills to Medic Mobile “Many years ago, I worked with the Peace Corps to improve health in rural Africa, and now through Clif’s volunteer program, I use my business experience to help Medic Mobile bring health care to similarly isolated communities. I feel so lucky!” –Amy Norris, Chief Legal Counsel

Clif people fun-raising

All hands on deck As part of our annual company-wide day of service, 264 Clif employees volunteered at Slide Ranch, a nonprofit that connects Bay Area children to sustainable farming, healthy eating, and environmental stewardship. Clif people built garden beds, cleared trails, laid new footbridges, and removed invasive species—what Executive Director Marika Bergsund described as three years' worth of work in one day.

Clif’s annual Big Dinner raised more than $35,000 for five nonprofit groups. The Big Dinner is one of numerous 2014 fundraising events organized by Clif employees that raised, collectively, more than $200,000 for some of our favorite organizations.

Choose to make an impact “Through the simple act of extending a hand, not just once in a while but as a regular part of life, we are changed as individuals and as a company.” –Kit Crawford 12


Amping Up Change GreenNotes gives musicians tools and funds to advocate for causes they care about. The Stone Foxes ask fans to bring healthy, nonperishable food (“not old stuff from your cupboard”) to their concerts, which the band later delivers to local shelters and food banks. Dessa advocates for local food and farming. SOJA promotes environmental action. Each band rallies its fans to get involved, building grassroots movements for positive change.

Growing Partnerships for Change $7.5M $7.0M

Donations Grow in 2014

$6.5M $6.0M $5.5M

Donated Value

In 2014 we marked our seventh year with In Good Company: Volunteers from 33 companies joined forces to support local nonprofits in West Oakland, Hopi, and the South Bronx on four different projects that focused on housing and urban farming.

$5.0M $4.5M $4.0M $3.5M $3.0M $2.5M $2.0M $1.5M

■ Product ■ Cash

$1.0M $.5M

COMMUNITY 2014 by the NUMBERS

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

11,585 $45M volunteer hours. 98% participation rate

cash & product donations in the past 11 years

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Our

PLANET

WORKING TO REDUCE OUR ECOLOGICAL FOOTPRINT

CONSERVING and RESTORING OUR NATURAL RESOURCES; GROWING A BUSINESS THAT WORKS IN HARMONY WITH the LAWS OF NATURE We love Yosemite! That’s why we’ve sponsored the Yosemite Facelift for the past seven years. This year, 1,600 volunteers, including Clif employees, built trails and rounded up more than 13,000 pounds of garbage.

Building a Greener Supply Chain

What's 50/50 by 2020?

In May the White House recognized Clif as a green power leader for our commitment to foster the use of renewable energy in our supply chain. We call our green power goal 50/50 by 2020— 50 of our key supply chain partners using at least 50% green power by 2020.

CLIF USES 100% RENEWABLE ENERGY AT OUR HQ (80% SOLAR + 20% WIND ENERGY CREDITS)

The words ecology and economics come from the same root, oikos, meaning house or home. Ecology is the knowledge of home—the world where we live. Economy refers to how we manage it. Clearly we’ve ignored the “eco” in economics far too long—and it’s time for a paradigm shift.

Cooling Our Commute With a little help from Clif Bar, employees have purchased (to date) 195 commuter bikes or bike trailers and 159 greener cars (fuel-efficient hybrid, electric, or biodiesel). New in 2014: two EV charging stations.

Think like a tree Let’s create a business that thinks like a tree. Trees run on 100% renewable energy, recycle all waste, and sustain and improve the places they grow. 14


Help Build™ Carbon Offsets Improve Lives and Protect the Enviroment

The Art of Zero Waste When we discovered our love of coffee was generating 160 disposable cups per week, Clif’s Cassie Cyphers inspired us to switch to reusable cups (and resident artist/HR guy Jeff Hantman brought the message to life by turning old cups, lids, sleeves, and straws into art).

This year, the school-owned wind turbine in Winchester, Indiana, began to generate clean renewable energy. It’s the 33rd wind project that’s now up and running thanks to Clif Bar, which provides essential, up-front funding to NativeEnergy’s Help Build program. Through the Clean Water Campaign, Clif helps fund the installation of Hydraid®’s water filters for people without access to clean drinking water in the Greater Accra Region of Ghana. Creating potable water without burning firewood means healthier people, cleaner air, and fewer CO2 emissions. Our 2014 offsets will provide clean water for more than 2,400 people for 10 years.

New offset program in 2014!

26,000 24,000 22,000 20,000

Tons CO2

18,000

Total CO2 Emissions & Carbon Offsets

16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000

Another Clif product proudly bearing the USDA organic seal.

0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

■ CO2 emissions generated by ground freight transport ■ CO2 emissions generated by office, bakeries, warehouses, and business travel ■ Carbon offsets

PLANET 2014 by the NUMBERS

To keep our carbon footprint climate neutral, we’ve been measuring and offsetting the CO2 emissions generated by energy use in our office, bakeries, warehouses, and business travel since 2003. In 2007 we also offset our historical climate footprint (dating back to 1992), and the following year we began to offset the impact of in-bound shipping.

75% 13 87% years

certified organic + certified sustainable ingredients

of climate neutral business operations

of waste at HQ was diverted from landfill through reuse, recycling, and composting 15


It all starts with seed The seed we sow impacts our food and our planet, for better or for worse Most of the seed used today leads to chemically dependent crops sprayed with toxic pesticides repeatedly throughout growth and harvest, and that leads to polluted air, water, and soil. Five agrichemical companies control the majority of seed.

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We can take back the seed


Seed Matters is an initiative of the Clif Bar Family Foundation The goals are to:

CONSERVE crop genetic diversity PROMOTE farmers’ roles and right as seed innovators and stewards REINVIGORATE public seed research and education Over the past four years we’ve: • Improved 17 crops—like wheat, quinoa, and tomatoes—to be better in the field and better on your table. • Donated more than $1.5M to organic seed research and education. • Awarded 13 graduate student fellowships in organic plant breeding. • Supported 120+ community seed projects. • Championed more than 400 farmers who have benefited from training in organic seed production.

Join us in 2015 as we launch our new campaign:

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At Clif Family Winery, our goal is to craft unique regional wines and food using practices that care for the earth and conserve biodiversity. In 2014, we introduced the Clif Family Bruschetteria food truck, which serves a seasonal menu of bruschetta and other Italian-inspired dishes using ingredients from the CCOF certified organic Clif Family Farm and other local and sustainable sources. The Clif Family Bruschetteria tours throughout Napa Valley, but it’s most at home just off the back patio of our Velo Vino tasting room in St. Helena, California—stop by soon for a fresh taste of Napa and a glass of Clif Family Wine! The inaugural release this year of our 2011 Cold Springs Estate single vineyard Cabernet Sauvignon was a celebrated event at Clif Family Winery. Our Cold Springs Estate Vineyard was our first vineyard to achieve CCOF certification.

Clif Bar Family Foundation supports innovative small and midsized groups working to strengthen our food system and our communities, enhance public health, and safeguard our environment and natural resources. In 2014, the foundation awarded more than $4.75 million to more than 400 pioneering organizations.

Time flies…hard to believe that four years ago we launched White Road Investments, our alternative investment firm that funds mission-driven companies! We’re now 13 companies strong including our most recent investment in Farmhouse Culture. Located in the center of a cabbage field in Santa Cruz, California, the company makes the freshest, best tasting organic kraut and fermented foods ever! We’re excited about 2015 and will continue to search for new partners.

Gary Erickson & Kit Crawford, Owners and Chief Visionary Officers | Kevin Cleary, Chief Executive Officer Thao Pham & Elysa Hammond, Co-editors | Mija Riedel, Managing Editor | John Marin, Senior Creative Director Hannah Bailey, Art Direction | Bill Ribar/Formative, Design | Sandy Biagi, Print Management Karen Drinkwater, Anne Hamersky, Photographers Special thanks to our contributors: Gregg Bagni, Ricardo Balazs, Peter Berridge, Jenny Berrien, Val Bisharat, Rich Boragno, Sarah Ciccarello, Kevin Cleary, Deven Clemens, Bryan Cole, Darcy Colwell, Doug Cornille, Jessica Ann Culnane, Cassie Cyphers, Dai Deh, Shannon DiDonato, Matthew Dillon, Michelle Ferguson, Jen Freitas, Linzi Gay, Jeff Hantman, Lauren Hatfield, Sue Hearn, Claire Jackson, Rachel Klipp, Chandler Kneer, Melissa Leebove, John Lozano, Yvonne Marron, Priscilla Martin, Dean Mayer, Mike McLaughlin, Jane Moore, Keith Neumann, Amy Norris, Margot Northover, Claudia Perkins, Monica Pomeranz, Chris Randall, Heather Salazar, Suzy Starke-German, Srilakshmi Susarla, Lashunda Tate, Cassandra Todd, Kate Torgersen, Alfred Torres, Keely Wachs, Melissa Wilson, Nancy Wright.

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