More than two decades after turning down a $120 million offer from Quaker Oats, Gary Erickson and Kit Crawford, the majority owners of Clif Bar, have agreed to sell the energy bar company to snack giant Mondelez for $2.9 billion.
By Jemima McEvoy
Twenty-two years ago Gary Erickson and his then-business partner Lisa Thomas faced a difficult choice. Quaker Oats had proposed paying $120 million for their energy bar company, Clif Bar & Co., which was doing an impressive $40 million in annual sales after roughly doubling every year since its launch in 1992. Taking the deal meant its founders could each walk away with a pre-tax $60 million and be freed of the difficulties of building and running a business. Thomas wanted to walk away, but something told Erickson to turn the offer down. It wasn’t the right time.
“I was about to become a very rich man … but instead of feeling excited, I felt nauseated,” Erickson wrote in his 2004 book, Raising the Bar: Integrity and Passion in Life and Business: The Story of Clif Bar Inc. As he and Thomas were about to sign the papers on April 17, 2000, he made a split second decision. “I felt in my gut, ‘I’m not done.’”
So Erickson bought out Thomas’ stake for $62 million and held on. Wise move. On Tuesday, the snack giant Mondelez International, which owns Cadbury, Oreo, Ritz, Sour Patch Kids and more, announced it will pay at least $2.9 billion to buy Clif Bar, including its Luna and Clif Kids brands. The sellers will have a “performance driven earnout structure,” meaning the sum they receive can go up based on Clif Bar’s financial performance in 2025 and 2026, according to Tracey Noe, a vice president of communications at Mondelez.
The deal, which is expected to close in the third quarter of this year, means Erickson, aged 64, and his wife Kit Crawford, 63–who together own 80% of the company, (Clif Bar’s roughly 1,200 employees own the rest)–will walk away with approximately $1.53 billion in cash, according to Forbes’ estimations, bringing their combined net worth including real estate and other assets up to at least $1.6 billion. (Forbes’ calculation accounts for the couple’s expected payment of federal and state taxes on the sale, as well as income from estimated dividends paid to them over the years.) Crawford, who was one of Erickson’s earliest employees before their marriage in 1994, replaced Thomas as his business partner in the aftermath of the collapsed Quaker Oats deal. She ran the company with him as co-CEO intermittently in the following years before they both stepped down for good in 2020.
According to the announcement, Clif Bar will continue to operate out of its headquarters in Emeryville, California; its manufacturing will also remain in its facilities in Twin Falls, Idaho, and Indianapolis, Indiana. “Mondelez International is the right partner at the right time to support Clif in our next chapter of growth,” said Sally Grimes, who took over from Erickson and Crawford as CEO in 2020, in a statement. “Our purposes and culture are aligned.” Representatives for Clif Bar and its owners did not respond to Forbes’ requests for additional comment.
Even before the deal, Clif Bar’s strong performance—the company reportedly had revenues of $843 million in 2019—had made the company’s co-owners super rich: Crawford ranked No. 36 on Forbes’ 2022 list of America’s richest self-made women published earlier this month with an estimated net worth of $680 million. The deal will push up her individual net worth to at least $800 million, Forbes estimates. Outside of each holding a seat on Clif Bar’s board of directors, the pair run the Clif Family Winery in Napa Valley and the venture capital firm White Road Investments. They also own a slew of residential properties across California and Oregon worth an estimated $32 million.
“We wanted to be the main decision makers all the time.”
An avid adventurer, Erickson came up with the idea for Clif Bar in 1990 while on a 175-mile bike ride he calls “The Epiphany Ride.” He recalled in his book that he could only find one type of energy bar in stores at the time—those made by PowerBar, which was acquired by Nestlé in 2000 and then sold to Post Holdings in 2014 —so he and his friend each packed a few with them for the long journey and munched along the way. As the ride stretched on, he found he could no longer stomach the monotonous taste.
“I needed to eat my last PowerBar, yet I suddenly realized that I couldn’t choke it down. I just couldn’t put it in my mouth,” Erickson wrote in his book. That’s when it hit him: “I can make something better than this. Something that if you needed to eat six of them, you wouldn’t have to choke the last one down.”
Inspired, Erickson, who was working for a California-based bicycle seat manufacturer, began cooking up energy bar recipes with his mother in her kitchen. After six months he had “perfected” the Clif Bar–named after his father, Clifford–and began doling it out at bike races and running events. The company went on to do $700,000 in sales its first year in business, a figure that continued to grow rapidly through 2000, when Erickson toyed with selling the company. “We were riding an incredible wave,” he reflected in his book a few years later.
The entrepreneurs decided they didn’t want to be gobbled up by a bigger company and lose their ultimate vision for Clif Bar. In the following years the husband-and-wife team continued to expand Clif Bar with a focus on sustainability. In 2003, the company announced it would transition to using organic ingredients; it now says its bars are 70% organic. “It was clear that transitioning to organic ingredients was right for people, farm communities and the planet even if it would hit the traditional bottom line,” Erickson told Forbes in an interview in May 2020.
This pivot, along with Clif Bar’s expansion into new global markets and categories (Luna Bar and Clif Kids, launched in 1999 and 2004, are marketed specifically to women and children), helped keep Clif Bar competitive in the now highly crowded energy bar market. Put simply, Erickson would not struggle with a lack of options today: There are entire aisles in grocery stores now dedicated to energy bar brands, including RXBAR, Larabar and GoMacro. In February of last year, Clif Bar CEO Sally Grimes unveiled plans to double the company’s sales to $2 billion while increasing its positive global impact, dubbing it an upcoming business-wide “reset.”
Whether or not that will happen under Mondelez’s ownership, it may come as a surprise that Erickson and Crawford won’t be along for the ride. Since pulling out of the sale to Quaker Oats more than two decades ago, the couple have long insisted they won’t give up control of the company. In a 2018 interview with the business magazine Inc. Erickson and Crawford joked that their assistants and the chief financial officer weren’t even alerting them when other companies offered to acquire Clif Bar.
"Gary and I have always been very sure about our feelings, and our passion, and our love for the company,” Crawford told Inc. “We wanted to be the main decision makers at all time.”
But this time around, it seems, the timing—and the price—is right.
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