Mondelez International, the snack food conglomerate that owns brands such as Oreo, Ritz, Triscuit, Trident, Stride, and Chips Ahoy!… among many, many others… just announced it has reached a deal to add a new brand to its roster: Clif Bar.
Mondelez is buying Clif Bar (which also owns the Luna snack bar brand) for $2.9 billion.
A snack brand being acquired is perhaps not normally interesting-enough to warrant a Celebrity Net Worth story. However, Clif Bar's history and current ownership structure is a bit unique. Unlike most food brands that have been around for decades and finally sell-out for billions, Clif Bar was not owned by a dozen investors and venture capitalists. Clif Bar was small, family affair.
First off, the company's founder Gary Erickson worked with his mom, a master baker, to create the very first Clif Bars. Second, Gary named the company after his father Clifford, the man who encouraged him to follow his passions and appreciate the wilderness. And finally, at the time of the sale, Clif Bar was majority owned by just two people: Gary and Kit Crawford… his wife, and longtime co-CEO. Combined, Gary and Kit owned 80% of Clif Bar at the time of sale. The other 20% is owned by their employees.
A tale as old as time: Necessity was the mother of Clif Bar's invention.
Back in 1990, Gary Erickson was running a bakery in Emeryville, California called Kali's Sweets & Savories (the bakery was named after his grandmother). On the plus side, while operating Kali's, he met a woman named Kit who would eventually be his wife and business partner. He also loved baking, a passion he learned from his mother. On the downside, Gary hated running a struggling business.
The whole purpose of being his own boss and running the bakery was to provide a lifestyle where he could rock climb and go cycling whenever he chose. Instead he found himself tied to the bakery 24/7 trying to make the business work.
One morning, Gary and a friend managed to get away for what was supposed to be a 125-mile bike ride through the mountains. For nourishment, Gary brought along six energy bars.
Gary and his friend ended up riding 175 miles that day and along the way Gary ate five of the six energy bars. He was still starving after fifth, but couldn't stomach another "unappetizing, sticky, hard-to-digest bar."
He would later describe this moment as "the epiphany."
As he would learn roughly three decades later, that moment was actually a multi-billion dollar epiphany.
Mom Helps Out
Gary practically drove straight from his ride to his mom's house. His mom was the best baker he knew. Together they spent the next six months experimenting and perfecting. After thousands of failed attempts, they eventually landed on a bar that had just the right mix of nutritious ingredients and delicious taste. The final winning product was actually a remix of his mom's recipe for oatmeal + chocolate chip cookies.
Gary named their creation the "Clif Bar," in honor of his father Clifford who taught him how to enjoy and appreciate the wilderness AND always encouraged him to follow his passions in life.
After getting taste-test approval from friends, Gary went door-to-door to bike shops around the Bay Area to make the first sales.
Taking On A Partner
In the early days, Gary knew he needed and wanted a business partner. For that role, he really wanted to partner with his bakery employee (and secret crush) Kit Crawford. Unfortunately Kit was not available romantically or professionally, so Gary ended up partnering with a woman named Lisa Thomas, on professional terms only. They split the company 50-50.
In its first year of operations, Clif Bar generated $700,000 in revenue.
"I didn't start Clif Bar to make money or to fill holes in my life. I did it because I wanted to make a better energy bar for my friends and myself. We hit upon a perfect storm of sorts where, while we had strong sales in bike shops, the healthy and natural foods movement was emerging and was seeing incredible growth." – Gary Erickson
Turning Down Acquisition Offers
In 1999 Clif bar released a product geared specifically towards women, the Luna Bar.
By 2000, a little less than a decade after "the epiphany," Clif Bars were available to purchase at thousands of stores around the US and even globally. The company was generating north of $40 million in revenue.
In 2000, Quaker Oats came knocking with an acquisition offer. Quaker's offer was…
As Gary would explain years later, he was initially planning to accept the deal, especially because his partner Lisa was adamantly in favor of taking the money. But as the negotiations were winding down and the paperwork was being drawn up, Gary had another epiphany. One day while riding his bike around the area of his Emeryville factory, he thought about all the good his employees were doing for the community. For years Clif Bar empowered its employees to spend some of their time working on charity. It occurred to Gary that if the company sold, all that charity might stop. Furthermore, he believed Clif Bar could be a greater good for his employees as a private company as opposed to just one of hundreds of Quaker Oats business units.
After meditating on the offer for a bit, Gary decided to decline.
Lisa was not happy. Actually, she was dumbfounded and furious. She demanded to be bought out.
So Gary offered to buy her 50% share at Quaker's $120 million valuation. AKA, $60 million. An an amount he did not have. It took a decade to pay off her buyout. Gary ultimately paid Lisa $72 million with interest.
Kit Crawford Returns
By 2004, Kit Crawford's first marriage had ended. Gary reached out and they soon soon fell in love.
Not only did they fall in love and marry, but Kit also came aboard to be his co-CEO of Clif Bar. They ran the company together through 2020 when they finally allowed a new CEO to take the reigns.
Twenty two years after rejecting that $120 million offer, Gary and Kit finally agreed to sell Clif Bar to Mondelez for $2.9 billion. Former partner Lisa's 50% stake, which was bought-out for $72 million, is now officially worth $1.45 billion.
With the sale, after taxes the husband and wife team will be left with a combined net worth of roughly $2 billion, essentially doubling their previous paper net worths (which were based on earlier estimated valuations).
But Gary and Kit aren't actually the only people who will make money from the Mondelez sale. In 2010, Clif Bar launched an Employee Stock Ownership Plan that allowed their employees to earn equity. At the time of the sale, an estimated 20% of company shares were owned by employees. That's $580 million going to employees. According to some quick internet searching, there are around 1,000 employees of Clif Bar. It's impossible to know how many employees took advantage of the program and to what degree. Hopefully a lot and a lot.
A storybook ending all around!