CLIF BAR & Co. Alana Sherman Amber Haddad Izzy Poulin Natalie Halabuk* *In charge of formatting/pulling together sections of paper Our group name is the Lean Green Fighting Machines. We all have an interest in the environment and how the consequences of human actions are now beginning to affect the business industry. In our case study we examine the business CLIF Bar and Company and the green initiatives they are taking on a strive to become an ever more natural and ecofriendly company. We decided to do CLIF Bar for our project because it is an already natural product that has been taking on initiatives over the last 13 years to become even more sustainable. We wanted to see for ourselves the strengths and weaknesses of this company since we eat their product. Learning about a company that you are familiar with can help to better your understanding of similar markets. Intro/Background/Context (Alana & Natalie): CLIF Bar and Company was founded by bicyclist enthusiast Gary Erickson. On a long, 175-mile day bike ride in 1990, Gary became tired of the same old boring PowerBars and decided he could create something better. Being a former baker, he went into his kitchen upon returning home to create an all-natural, organic energy bar recipe of his own. With the help of his family he perfected the bar and debuted it at a bike show in 1991. His bars, 3 flavors at that time, were a success and he ended up making over $700,000 that first year. By 1997 revenue had already exceeded $20 million and in 2006 CLIF Bar hauled in revenue of $150 million. In 2010 CLIF Bar and Company were offered $120 million to sell to Quaker Oats, which they turned down. CLIF Bar is a mid-sized company with about 400 employees. They call themselves a private, family and employee-owned company. It is co-owned by Gary Erickson and Kit Crawford, alongside their CEO Kevin Cleary. CLIF Bar is based out of Emeryville California; their product is sold all over the United States. The company departs from the traditional mission statement and follows what they call The Five Aspirations. They see themselves on a constant journey with room to improve in any area. The Five Aspirations start with sustaining their business by investing long-term and operating a resilient company. Through integrity, quality and authenticity they sustain their brand. They pride themselves on their employees by saying “our Company is our people” thus making it clear the importance of sustaining their people. Both locally and globally they strive to sustain their community through the promotion of health and sustainability. Last but not least, they recognize the importance of sustaining our planet by “growing a business that operates in harmony with natures laws” and by conserving and restoring resources. 2 Their original product is the chocolate chip flavored CLIF Bar, which is a wholesome, organic, and nutritious energy performance bar. The bars are made using organic ingredients including roasted soybeans, soy rice crisps, and soy flour. Each bar has the same basic ingredients but also includes its own unique ones to create a variety of flavors. Athletes are the main consumers of CLIF Bars because it is a product made to provide nutrition and energy; the product was originally sold in bike shops. Erickson stands mute on the company’s profits. He states too much talk about the bottom line would detract from CLIF Bar’s stated mission to serve loftier goals. CLIF Bar is a Sustainability Journey Stage 5 company due to the fact that they are a green business not because it makes them successful, but because they know it is the right thing to do. CLIF Bar is also currently striving toward zero waste which started when their office switched to recycled paper; they set up desk-side recycle bins and they discouraged disposable dishes, offering more planet-friendly options. Scope (Amber): We will be tracing the emissions, energy, and waste footprints related to the extraction, production, distribution, and waste stages of the life cycle assessment for one 2.4 oz. chocolate chip CLIF Bar produced in the Twin Falls, Idaho bakery and distributed to the University of Redlands Plaza in Redlands, California. Here it will be purchased and consumed by a member of the target demographic, which includes students approximately aged 18-26. This consumer will most likely be a student athlete, or a student living an active, healthy lifestyle, and engaging in activities such as cycling, running, or mountain climbing. 3 Flowchart (Natalie): 4 Product Life Cycle Assessment (Amber and Izzy): Extraction The top 3 ingredients used in a Chocolate Chip CLIF Bar are Organic Brown Rice Syrup, Barley Malt Extract, and Organic roasted soybeans. The environmental impact of these ingredients is as follows: Organic Brown Rice Syrup: Brown rice is a sustainable crop in that it goes through very little processing, just needing to be dried after harvesting. The green house gas emissions that result from harvesting this brown rice is approximately 1.6 kilograms of CO2 per unit mass. There was no data available showing how much brown rice syrup is used per Chocolate Chip CLIF Bar. Barley Malt: The process of producing barley malt creates .21 lbs of CO2 Soybeans: On average, soybeans farming uses 3590.05 MJ/ha of energy, this number is calculated by adding both material and energy inputs. When it comes to the packaging of CLIF Bars, they produce the wrapper and the caddy that the bar is transported and displayed in. The environmental impacts of these packaging items are as follows: Caddies: Made from 100% recycled paperboard, which uses approximately 31,500 kW of energy to make. Wrappers: CLIF Bar wrappers are made of flexible polypropylene plastic with a layer of aluminum in between. Polypropylene is 100% recyclable, it produces less solid waste and significantly less CO2 equivalents by weight than other polymer plastics with 3456 Kg CO2 eq/Tonne. Emissions from aluminum production numbers that have been reported for uncontrolled gases for smelters are: 20-80 (kg/t). An aluminum smelter produces 40-60 kg of mixed solid wastes per ton of product. Production The bar making process is as follows: first the main ingredients are mixed together with water using an industrial sized mixer. The mixture is baked and then laid on a table evenly and goes through a “cooling” machine process, where it is cooled. Next, the bar is taken out of the cooling machine and drizzled with chocolate. Finally, the bar sheets are cut and ready to be wrapped. Specifics on the emissions and energy use of chocolate chip CLIF Bars production were not available, but on average, manufacturing facilities use 95.1 kilowatt-hours (kWh) of electricity and 536,500 Btu of natural gas per square foot annually. Their smart solar array was the first installed in 5 North America that provides over 500 kWh and provides the majority of their electricity and 70% of their hot water. The breakdown of the distribution of energy use in a production facility is shown in the pie chart below. Distribution To transport a chocolate chip CLIF Bar from the bakery in Twin Falls Idaho, to the distribution center in Emeryville California, to its final destination of the Plaza shop at the University of Redlands, it will travel a total of approximately 1,098 miles. As fleet emissions for big rigs assume an average of 5.4 mpg, and the emissions factor is 22.2 lbs CO2 per gallon of diesel consumed, we can assume the total amount of CO2 emissions for this transportation to be approximately 4,514 lbs of CO2. CLIF Bar calculated total CO2 emissions generated by shipping from the bakeries to their customers for all products for a whole year to be approximately 3550 tons. As displayed in the pie chart below, ground freight transport is the most significant component in CLIF bar’s carbon footprint, followed by energy used to power the bakery and produce the CLIF bar. 6 Waste 75% of wrappers are up-cycled through CLIF Bar’s partnership with Terracycle to be made into other products and recycled products made by Terracycle can be sent back to them to be recycled again. Up-cycling through Terracycle uses less emissions than standard recycling procedures. While a pencil case made with Recycled HDPE plastic creates approximately 37 lbs of CO2 compared to 26 lbs. of CO2 when made with up-cycled candy wrappers. 7 SWOT Analysis (Amber & Izzy) Modified SWOT (Energy) Environmental Challenges Internal Weaknesses A lot of energy used to get products to where they need to go. Their programs can be costly. Strengths Product does not need to be refrigerated therefore saving energy. Solar panels on roof of their office. Cool Car Incentive Program: Helps employees buy electric, hybrid, or biodiesel car. Cool Commute Program: rewards employees who bike, walk, or take public transportation. Cool Home Program: annual funding to help employees make energy upgrades to their home. External Opportunities Their goal, “Think Like a Tree” is to bake their goods with clean, renewable energy at some point. Still have room to improve in their offices and ‘kitchens’ to help conserve energy. Positives Threats Other companies following the same energy goals as them and taking away their customers. Negatives Modified SWOT (Waste) Environmental Challenges Internal Weaknesses Strengths Waste created from the product is the Office use recycled paper and recycle bins. whole wrapper. It isn’t biodegradable Boxes that contain bars are made from and therefore ends up in our dumps. 100% recycled paperboard. Stopped using shrink-wrap on their caddies. External Opportunities Waste Management: Developing product packaging that is biodegradable to further environmental friendliness. Positives Threats Adding more waste to landfills. Negatives 8 Modified SWOT (Pollution) Environmental Challenges Internal Strengths CLIF Bar and Company is committed to sourcing ingredients that are organic and non-GMO, which puts much less pollutants into the environment. External Opportunities Air pollution: Investing in ECOTANKVAN can reduce huge amounts of carbon emissions as compared to the traditional tanker. Their goal, “Think Like a Tree” and to transport their product in a non-polluting way. (It’s their model for thinking sustainably.) Positives Weaknesses Sold all over the country, causing high CO2 emissions that depletes our ozone layer. Threats Climate change: Growth increases GHG. Negatives Stakeholder Map & Analysis (Alana & Natalie): I. Rulemakers & Watchdogs (Government) We encourage companies to take green initiatives through their regulations. CLIF Bar and Company have taken great strides through their use of solar panels to reduce their cost of electricity significantly. CLIF Bar is a company that is constantly monitoring and bettering their ecological footprint. We have regulations in place to ensure that food production companies make products that are safe for people to consume. The FDA is in charge of these particular regulations, some of which are Food Safety and Food Labeling. CLIF Bar is an FDA approved product, which means it follows all of the FDAs regulations. All their ingredients are from suppliers that don’t use pesticides per EPA regulations. We also have regulations on energy use and carbon emissions. (NGOs) Our mission at One Percent for the Planet is to create an alliance of business committed to creating and sustaining a healthy planet. We work to connect businesses with consumers and non-profits in order to empower all of us to strive for change. We 9 have more than 1,200 member companies around the world, one of which is a US based company CLIF Bar, which means that they along with our other member companies donate 1% of their sales per year to our cause. By joining us companies, like CLIF Bar, are able to be an engine for positive change and it's important that they stay in business to continue inspiring positive change. II. Idea Generators and Opinion Leaders (Media-positive) In our October issue of Fortune Magazine, JP Mangalindan wrote an article on the benefits of being an employee for such a caring and sustainable business as CLIF Bar. CLIF Bar and Company encourages all of its employees to live eco-friendly lifestyles. For instance, if employees buy hybrid cars, bike to work, take public transportation or install solar panels into their homes, they get reimbursed a set amount of money. It’s an important first step to reward an employee for being a good steward of the environment. This is an easy way to balance both the importance of the planet and the importance of its people; by doing so it is easy to then make a profit due to commitment and sustainability. We rank CLIF Bar and Company as the 9th best place to work. (Media-negative) One of our Huffington Post writers, Mikko Alanne, wrote a story in July of 2014 about CLIF Bar and the company's refusal to disclose the origins of the cocoa it uses in its bars. He discovered that for more than three years the Food Empowerment Project, which seeks to create a more just and sustainable world by recognizing the power of one’s food choices, have been waging a campaign against CLIF Bar due to their refusal to disclose the origin of its cocoa. The issue with CLIF Bar not releasing the information is the fact that more than 70% of the world's cocoa comes from farms in Western Africa that use child slave labor. While CLIF Bar is not the only company keeping silent on the issue of its cocoa supply origins, it is unique in that the company is a prominent socially responsible company, giving CLIF Bar the ability and more importantly the social responsibility to address the issue of child labor, especially since on the company's website in the Code of Conduct it states that "CLIF Bar does not condone the hiring of child labor under any circumstances." III. Business Partners and Competitors (Competitors- PowerBar) We have been the top competitor in the energy bar market alongside CLIF Bar for over ten years. We both strive to make bars packed with fiber, 10 vitamins, and protein for athletes and people on the go. However ours are far more superior because they are more affordable to the common athlete. We have many similarities with CLIF Bar, including being founded by athletes to fuel personal workouts, yet from there we each took off in very different directions. We were bought by Nestle and became the dominating force in the market by spreading our message of nutrition to consumers. Our goal as a company is to continue dominating the market while CLIF Bar remains focused on saving the planet and fails to compete at our standards. (Suppliers- Bascom Family Farms) We supply CLIF Bar and Company with maple syrup from our family-run business in New Hampshire. Being a company that is committed to sustainability, our partnership with CLIF Bar is important to us. As a national company its nice to know that they still support small family run businesses. Too many big business these days, have converted to large-scale suppliers and don’t support local or small business. It’s refreshing that CLIF Bar cares enough about its consumers and the planet to get their ingredients from respectable places. IV. Consumers & Community (Consumers- Alana Sherman) I have been a consumer of CLIF Bars since I was in middle school. Admittedly, my reason for purchasing them had nothing to do with their green business efforts since I knew nothing about it as a young teen. I consumed their product for two reasons, energy and great taste. However, as I got older and started to become aware of what I was purchasing, who I was purchasing from, and the impacts that those products I was purchasing had on the environment. I began to look into CLIF Bar and compared them to other energy bars. I found that they were the most environmentally aware company in their field and were really making strides to continue improving their efforts to be green. As an athlete and environmentally conscious person, CLIF Bar was the ideal energy bar company for me. (Community- Emeryville, CA) CLIF Bar and Company is a true, blue American company that knows where it’s from and never skimps on their duties to their community. In 2001 they launched their 2080 Program to encourage employees to volunteer and give back to their community. 2,080 is the average amount of hours worked for a full-time employee and the amount of hours CLIF Bar has vowed to donate to the community through time and hard work. Last year, with 98% employee participation, they surpassed their goal by over 7,000 hours! Furthermore at their annual company wide 11 2080 Project day, they have been able to restore mile-long trails, paint and landscape one of our local public schools and build us a community garden. CLIF Bar is a committed company that is dedicated to bettering our community and we are grateful for that commitment. V. Investor and Risk Assessors (Employees) Besides the perks that come with green transportation, we receive virtual points for doing green deeds that we then get to redeem, for instance at the onsite chiropractor. The company truly emphasizes the importance of health and wellness with things such as an all organic cafeteria with locally grown ingredients, an onsite gym that has both a rock climbing wall and classes offered weekly, as well as the option to work with the personal trainer twice a week. On top of that, management wants to ensure that we are always looking toward the future and to reward us for our hard work; every 7 years, we get a 6-week paid sabbatical. All of these elements make CLIF Bar and Co. a valued company to work at, one that employees such as myself can really commit to and feel important at. Employee turnover has stayed constant at a low 3% (2014, Fortune Magazine), proving that we are satisfied with our jobs at CLIF Bar and Co. (Shareholders- CEOs) Using an approach similar to that of the Triple Bottom Line, our vision for our company was designed to sustain the planet while simultaneously sustaining our business and attracting like-minded people to join us. Being privately owned, we would ultimately like to stay that way, which means not being able to compete on as large of a scale as our competitors. We have accepted this setback, and while we strive to expand in every way possible, we are committed to our principles. We want to ensure our consumers that they are our priority and will continue to put them and the environment first. An important way in which we are able to do all of this is by sustaining our employees and stakeholders. In 2010 we initiated an employee stock ownership program, giving 20% ownership of the company to our employees. 12 Business Recommendations: (Izzy) Our suggestion for the company is to create and use biodegradable materials for their products. Although their packing boxes are made with 100% recycled paper, we feel that they can do even more by creating wrappers and boxes that are 100% biodegradable. We are suggesting this because it will help the company diminish their environmental impact by creating a reduction in their waste. If the wrappers are biodegradable then they don’t have to worry as much about the end life cycle of their product. The only waste created by the product is the wrapper and packaging. Making the packaging biodegradable will decrease the amount of trash put into landfills. We feel it will improve their organization because it will not only bring more media attention, but also attract more consumers due to their new eco-friendly wrapper. If they follow through with this, it could even influence other companies to follow suit and increase their popularity in the market further. Implementation of this idea would greatly improve the CLIF Bar Company’s carbon footprint by reducing their waste production. This relates to the 7 Business Case Benefits because it: o Increases Revenue and Market Share: investing in this could cause a lot more media attention and bring in many more consumers. o Reduces Waste Expenses It also relates to the 4 quadrants by increasing revenue/market share and increasing brand. However it does not relate to reducing cost because there is the possibility that in order to create this special packaging, they will have to spend more money to manufacture them. This could cost them a bit more, but would help the planet in the long run, thus following their company’s vision. This recommendation was derived from looking at the Life Cycle Assessment as well as their SWOT analysis. One of CLIF Bars weaknesses was that the packaging is the only source of waste from the product. Since there are many companies that make health bars, there is a lot of competition in this market. Some of the major competitors include Power Bar, Kind Bar, Quest Bar, Perfect Foods Bar, ThinkThin, and Tiger’s Milk. The company is doing well, but if they really want to be “Thinking like a tree”, then they will have to implement ideas like creating biodegradable packaging. This would really increase their brand, increase revenues and market share, and decrease waste expenses. Following through with this could also influence many other health bar companies to do the same, which would really be a turning point in the food industry. If a lot more companies switched to biodegradable packaging, we 13 could greatly decrease how much waste is put into landfills long-term. We think this could be accomplished within the next few years. We already have the technology to make biodegradable products and some companies are already using them. (Alana) We recommend that CLIF Bar be more open about where they source their ingredients from. Although CLIF Bar discloses the sources of some of their ingredients, the company recently came under fire for not disclosing the source of their cocoa. The company is open about the source of their locally grown ingredients, but are not nearly as forthcoming about the source of the ingredients that cannot be found locally in the US. We are making this recommendation because it will help CLIF Bar build trust between consumers and the company. It will also reduce the company's risk because they would stop getting negative media attention for their lack of transparency. The company's brand will increase as well because by being more transparent and open with the public and their consumers, CLIF Bar will redefine their brand as being an honest and socially responsible company. This relates to the 7 Business Case Benefits & the 4 Case Benefits due to: Decrease Risk Increase Brand Increase Revenues CLIF Bar has already started heading towards being more transparent with the introduction of CLIF CORE Values for Sustainable Sourcing, which is a way to assess their sourcing program and to learn more about the farmers and food businesses that are part of their supply chain. The CORE Values provide goals for sustainable sourcing, which are: Connect - Trace our ingredients back to the producers that grow our food. Organic - Increase our purchase of organic, transitional, and certified sustainable ingredients. Restore - Support and encourage restorative practices that reduce environmental impacts, conserve natural resources, and protect biodiversity. Ethical - Source ingredients that are grown and processed using fair labor practices. These goals are a step in the right direction and we believe that if CLIF Bar follows through with this idea and implements our recommendation that the company will improve greatly because they will further the company’s already well known socially responsible business practices. 14 Conclusion Since 2001, CLIF Bar has shown that it is committed to operating a sustainable business. The company bases all its business decisions on its Five Aspirations; considering how these decisions could impact the environment, and ways to reduce or eliminate this impact. Their sustainability journey has included receiving USDA organic certification for its ingredients, collaborating with Rainforest Alliance for Cocoa Certification, joining BICEP to advocate for strong climate legislation, launching the Seed Matters program to protect and developing organic seeds, building six farmerowned wind turbines in the Midwest, and filling up all company vehicles with local, recycled biodiesel. CLIF Bar also encourages its employees to participate in its journey towards sustainability by implementing several initiatives such as the Cool Home and Cool Commute programs, which provides employees with up to $1000 annually to make eco-improvements to their homes, and rewards employees for walking, biking, carpooling and taking public transportation to work. CLIF Bar has also partnered with American Forests to plant trees to offset employee commutes. Through these initiatives CLIF bar has been able to reduce its impact on the environment, however we believe if they follow our recommendations of developing biodegradable packaging and being more open about where they source their ingredients, they will be able to continue their journey towards The Five Aspirations and reinforce their brand’s position as a sustainability leader in its market to give it a competitive advantage. 15 Bibliography https://aaahq.org/western/2008/RichBoragno.pdf http://blog.goinggreentoday.com/which-sweetener-is-most-sustainable/ http://www.bir.org/industry/paper/ http://www.carbonfund.org/how-we-calculate http://www.clifbar.com http://www.clifbar.com/article/project-2080 http://www.esource.com/BEA1/CEA/CEA-16 http://www.FoodIsPower.org http://fortune.com/2014/09/18/clif-bar-top-of-americas-workplaces/ http://www.forbes.com/forbes/2007/0312/081a.html https://www.google.com/maps/dir/Twin+Falls,+ID/Clif+Bar,+1451+66th+Street,+Emeryville,+CA+9 4608/University+of+Redlands,+1200+E+Colton+Ave,+Redlands,+CA+92373/@38.2228476,123.1324365,6z/data=!3m1!4b1!4m20!4m19!1m5!1m1!1s0x54aca3a4c5b26eaf:0x24cb77ec2cf8c1aa! 2m2!1d114.4608711!2d42.5629668!1m5!1m1!1s0x80857e5f37449279:0xe89bc9ceb0c9ce14!2m2!1d122.292439!2d37.847182!1m5!1m1!1s0x80db55f2cdd1b6e1:0xcf4d65075049a323!2m2!1d117.163181!2d34.062685!3e0 http://www.localharvest.org/squier-squash-donnelly-farms-M12054 http://news.bbc.co.uk/2/hi/africa/1311982.stm http://millikenchemical.com/why-polypropylene/ http://www.powerbar.com http://www.slideshare.net/conorharrington/clif-bar-advertising-campaign 16 http://www.sfgate.com/bayarea/article/The-Battle-of-the-Bars-Berkeley-s-PowerBar-and2620109.php http://www.terracycle.com/en-US/pages/why-send-garbage-to-terracycle.html http://thehealthreporter.tv/2009/08/20/clif-bar-v-powerbar/ https://www.zombiehunters.org/forum/viewtopic.php?f=93&t=105511 17