10 // NOVEMBER 2012 // OUTDOOR USA MAGAZINE

Cover Story:

Celebrating twenty years of organic growth and productsClif Bar Creates Value From Values

BY JOSEPH GOMEZfrom emeryville, ca

A converted valve factory provides open space, fresh air and passive solar for the 300+ employees in Emeryville

The sports nutrition market has seen explo-sive growth in the past decade, due to product innovation and the fact that active consumers are demanding more for their bodies than just snack foods. Selection has grown from bland bars to gels, fl uids, protein bars, energy bars, fancy powders, you name it. Research fi rm Global Industry Analysts, Inc., projects this global market to exceed $67.2 billion dollars by the year 2017.

Clif Bar has been responding to the demand for a more nutritious, better-tasting energy product since 1992 when its bars hit shelves for the fi rst time. Founders Gary Erickson and his wife, Kit Crafwford, have grown the com-pany from Gary's mom's kitchen to a state-of-the-art headquarters in Emeryville, CA next to the progressive town of Berkeley.

In the outdoor specialty channel, Clif Bar rep-resents nearly one third of the market, which is defi ned as all energy food and dehydrated foods (Leisure Trends Group). Also according to Leisure Trends, that market grew from 13.6 million in 2005 to 36 million in 2011—a 17 percent compound annual growth rate (CAGR).

Now with 14 different brands to its name, each distributed across multiple channels, the company continues to preserve its heritage as the leading sports nutrition provider in the out-door specialty space. Additionally, the brand has international reach, having expanded distribution to Canadian territories in 1993 and across the pond to the United Kingdom in 2007.

With this being said, the company's healthy share of a burgeoning market illustrates only one of fi ve ingredients in the Clif Bar family recipe.

5 BOTTOM LINES“At the Clif Bar's core are fi ve aspirations:

Business, Brand, Community, People, Planet,” explains President and COO Kevin Cleary. You can argue that Clif Bar has fi ve bottom lines; fi ve standards by which it not only delivers, but measures itself annually. And not just as a business—employees are assessed in these areas too. So much so, that bonus compensa-tion is determined based on results across all fi ve categories.

On the surface, it seems too good to be true, but the brand's reputation precedes it. There is a reason why Clif Bar products are in 9 percent of all homes nationwide, and Cleary argues, “based on taste alone we should be in 20-30 percent.” Outdoor USA fi gured the best way to get a taste of the brand was to go to Clif Bar's home in Emeryville, CA, where we could expe-rience fi rst hand a company whose growth is as organic as its products.

A REFURBISHED VALVE FACTORYThe Clif Bar headquarters has barely been

broken in—the company just relocated in 2010. The new HQ is a valve factory converted into open offi ce space with a few add-ons. These add-ons include an organic, locally sourced cafe; an auditorium for meetings, events and band practice (the company has an employee band—the Grove Valley Orches-tra—who recently won a battle of the bands competition; a secret R&D kitchen; an on-site nursery and kids' playground; and a fi tness center equipped with personal trainers and bouldering wall, which is essentially a big-ger playground for employees. As if this isn't enough, we also forgot to mention the mas-

sage/acupuncture parlor and hair studio.The high ceilings and factory window panes

house just over 300 employees, with the bulk of workers in collaborative spaces on the main fl oor, each organized by department. In fact, we don't recall seeing a single cubicle. Fancy wood-paneled meeting rooms and an outdoor atrium sit at the center of the building, while an array of reclaimed outdoor décor hang from the ceiling. The most impressive of which is the “bike comet”, a fl oating display of a bi-cycle's evolution from its most basic parts to fi nal construction; a metaphor perhaps?

All in all, the headquarters has a sort of zen to it, which is likely due to its biophilic design; the concept of bringing outdoor elements in-side—this explains all the plants.

WITH THE PLANET IN MINDClif Bar has been tracking carbon intensity

(Co2 emissions relative to production) and offsetting those emissions since 2003. Start-ing in 2007, carbon intensity has decreased due to improved effi ciencies, and in that same year, the company purchased enough offsets to balance its historical footprint dat-ing back to 1992.

On the home front, initiatives like company-wide composting and recycling are overseen by a full-time, in-house "ecologist." On the supply side, Clif Bar has eliminated all shrink wrap from secondary packaging, preventing 90,000 pounds of plastic waste from entering landfi lls each year. Additionally, the company invested close to a million dollars to earn a LEED certifi cation for one of its largest facto-ries, and many of its transport vehicles run on biodiesel.

The company is putting its money where its mouth is. Clif Bar donated another million dol-lars to fund organic seed research, and is cel-ebrating having purchased close to 250 million

pounds of organic ingredients, total. Also this year, after receiving criticism from consumers over sourcing cocoa from West Africa—where slave plantations are a serious human rights issue—Clif Bar responded with action. It com-mitted to sourcing 100 percent of cocoa ingre-dients from Rainforest Alliance Certifi ed farms, a fi rst for energy bar manufacturers.

The company's commitment to sustain-ability and the environment can clearly be seen at its headquarters as well. The building itself is LEED certifi ed with a roof-top solar array generating 100 percent of the power consumed in the offi ce. Solar thermal pan-els provide 70 percent of all hot water needs, while waterless urinals save water in places you wouldn't expect.

A lot of the building's accessories are re-claimed or recycled. For example, the large sound proofi ng panels that loom over offi ces are constructed from recycled denim. These are one of many examples of re-claimed

building accessories and decorations.

LITERALLY INVESTING IN PEOPLEThe company's sustainable reach goes be-

yond the Clif Bar home, and actually into the homes of employees, who are benefi ciaries of programs like the Cool Home and Cool Com-mute Program. Cool Home provides employ-ees with up to $1,000 annually to make eco-improvements to their homes, while the Cool Commute Program—according to Clif Bar—is the country's fi rst biodiesel and hybrid em-ployee incentive plan.

In addition to sustainability incentives, Clif Bar personnel enjoy a number of concierge services from on-site fi tness, massage and acupuncture to car detailing and hair cuts. Human Resources Manager Jennifer Freitas admits, “I haven't had my hair cut outside of Clif Bar in about ten years.” These services in addition to the various organic food options at the company cafe are subsidized; meaning Clif Bar offers them to employees at a discounted

Employees Own 20 % of Clif Bar

Clif Bar's Employee Stock Ownership Plan (ESOP) gives employees a stake in the company that can also function as a retirement plan. Plans as such are gaining traction in the outdoor industry so we spoke with Rich Boragno, Clif Bar CFO, about his company's ESOP.

What is the advantage of the ESOP over other alternatives?The advantage is you are rewarding employees with the potential

increase in the company's market value, which is good for the busi-ness as a whole because they have a stake in its success. We also get the fl exibility of private ownership, while providing a retirement plan.

How is the value of Clif Bar shares determined, if it's not up to the public market?

Every year a team of third party fi nancial experts valuate the com-pany shares based on a number of criteria, primarily on our discount-

ed cash fl ow. We then use a company-derived, equitable formula—based on a mixture of tenure and compensation—to allocate shares in the 20 percent pool designated to the ESOP program.

What are the risks?Sometimes when shareholders sell to an ESOP, the company will

take on too much bank debt to pay them out, and this can inhibit future business growth. Also, if the market value of the shares goes to zero, the return is zero.

Any advice to employers interested in ESOP plans?Yes, don't bite off more than you can chew, and surround yourself

with experienced fi nancial experts and legal staff. An ESOP can be a well-structured investment for the right company; you just have to be patient and do your research.

The HQ features reclaimed decor like the symbolic "bike comet"The founder, from a family of bakers, named the kitchen after his grandma Kali

OUTDOOR USA MAGAZINE // NOVEMBER 2012 // 11

[cover story]price.

President Kevin Cleary explains, “Our per-spective is that a passionate, positively en-gaged workforce isn't the byproduct of a dy-namic business, but the condition for creating it.” But Clif Bar employees aren't just positively engaged at their work; they are actually fi nan-cially invested.

Since 2010, the company has been imple-menting its Employee Stock Ownership Plan (ESOP). The aim of which is to provide employ-ees an additional retirement compensation benefi t, while giving them a longterm stake in the success of the company. In the case of Clif Bar, employees actually own 20 percent of pri-vate shares, while the founders, Gary Erickson and his wife Kit Crawford, own the remainder (see box).

SERVICE IS PART OF THE JOBCentral to the brand message is the com-

munity Clif Bar keeps. Back in 2001, the com-pany introduced Project 2080, an initiative that offi cially made community service part of the work day. Employees are not required, but strongly encouraged to volunteer at least 20 hours a year. We should also mention these twenty hours are on paid company time.

The name is taken from the initial goal when the program fi rst started, which was 2,080 hours. Today, employee volunteer hours far exceed that 20 hour minimum with the current goal set at 7,280 hours this year. Scott Whipps, Director of Retail, plans to log somewhere be-tween 80 to 100 hours on the company's in-ternal website, which is used to manage hours and plan future volunteer opportunities.

In addition to project 2080, where em-ployees are actually evaluated on participa-tion, there is the Clif Bar Family Foundation. The philanthropic organization, established in 2006 provides grants to grassroots organi-zations leading the way in sustainability and access to heathy foods in underprivileged communities. Finally, Clif Bar is a regular at like-minded events and has crafted its own keystone events as well, such as the 2 Mile Challenge and Luna Fest, for example.

The 2 Mile Challenge is a recent initiative urging commuters to hop on a bicycle or other human powered contraption for commutes under two miles. Participants can log car-less commuter miles on a webpage, and as the miles go up, support is provided to local non-profi ts by Clif Bar.

Luna Fest, now in its 12th year, was start-ed as a compilation of short fi lms by, for and about women to boost representation and raise awareness about female health issues. It is a sort of packaged event that anyone can host or sponsor—Clif Bar provides all the tools to interested parties. Last year, Luna Fest cele-brated its ten year partnership with the Breast Cancer Fund, having raised over $3.5 million for research and treatment.

TRUST TAKES TIMENow celebrating its 20th anniversary, Clif

Bar has executed with great success the vi-sion of its founders. The company has helped pioneer a business model that creates value from values. It is a trend we are seeing in-creasingly more from other businesses in the outdoor industry, which says even more about the outdoor consumer. The market itself is not only demanding corporate responsibility, but, in the case of Clif Bar, is responding to it.

The main take away from our visit with Clif Bar and its executive team is the company's position on business as being something more than a generator of profi t. President Kevin Cleary argues that a reputable track record beyond the traditional bottom line is inextrica-bly linked to success because of the trust it creates with the end-consumer. This ideology was present during Clif Bar's humble begin-nings; it exists today, and it is likely that the same reasoning will propel the next generation of Clif employees.

President Kevin Cleary on Business and TrustClif Bar hit shelves in 1992 and made its fi rst mil-

lion in sales nearly one year later. As this growth continued, it caught the eye of Quaker Oats in 2000, who offered to purchase the company for 120 million dollars. Founders, Gary Erickson and Kit Crawford, respectfully declined. They resolved that the fl exibil-ity and oversight rooted in private ownership would ultimately prove more valuable to Clif Bar's future than the prospect of public investment.

Today, the Founders dedicate most of their time to managing the Clif Bar Family Foundation and other philanthropic outlets. In their place, they have en-trusted a team of value-driven professionals—head-ed by President and COO Kevin Cleary—to manage the vision they sought to protect back in 2000. Kevin, a passionate biker and triathlete, joined the company in 2004 as VP of sales, ad-vancing into his current role as president in 2009.

Since joining, Kevin has helped the company grow from three brands to fourteen, while also expanding distribution of those brands both here in the U.S. and internationally in Canada and the UK. Today, under his leadership, Clif Bar enjoys a healthy one third of the sports nutrition market and has achieved more in the areas of sustainability, community service and employee support than the founders could have imagined.

Now celebrating Clif Bar's 20th anniversary, President Cleary an-ticipates an even brighter future. He perceives the company's suc-cess as resulting from “a greater holistic strategy;” a strategy that is genuinely founded on one solid premise: Good business is about building trust.

Outdoor USA Magazine, in an exclusive interview, spoke with Kevin about how the company manages growth and how the Five Aspira-tions—the fi ve bottom lines Clif Bar delivers against—build trust with the consumer, and therefore, are the foundation for good business.

Kevin, what brought you to Clif Bar?Well, I was managing multi-billion dollar companies. This was great

for my career, but I just felt like something was lacking. It was hard to put my fi nger on it at the time. Looking back, I wanted to have a broader impact than just trying to drive one fi nancial result. What brought me to Clif was a business model based on Five Aspirations: business, brand, people, planet, community. It was this concept that helped me better understand what I was looking for in a company. The opportunity was huge for me.

Initially, what areas did you see for potential growth?We have always been confi dent and extremely proud when it

comes to taste, so one area of growth was really just getting them into people's mouths. For us, that was a grassroots marketing strat-egy that directly reached the consumer at what we call the point of passion. Another area of growth was expanding our retail landscape to geographies where we didn't have a strong presence at the time, like the Southeast and Midwest.

Today, Clif Bar is a household name with a large market share.

Yes, we went from a 3 product line company when I started in 2004, to today, having over 14 different brands. I believe we are growing because the goal isn't to just sell more Clif Bars; it's to bring healthier options to people in motion and increase access to more nutritious foods. There is a difference, and to do that successfully, we have to make sure we grow at a steady rate.

How has the company managed this growth?Part of what we talk about as a company is how

to stay within our capacity. We always try to make sure we are growing at a rate that is sustainable and balanced. Sometimes you will see companies that

experience this rapid expansion and when the growth plateaus, they have become too big to manage. What we've seen at Clif Bar is very steady growth over a ten year period, and when I look out at the next 5-10 years, I anticipate that same growth.

How has the business model based on those Five Aspirations evolved?

When I came to Clif Bar, we had this innovative, value-based busi-ness model. We were doing great things in each individual area, but at the time, we just hadn't found a way to bring everything together into one comprehensive approach that infl uenced how we make deci-sions across the board. I used to have this mindset that you can be successful and still have these 5 values, but now it's different. Today, I wholeheartedly believe that in order to be successful, you have to do these 5 things. I think its actually been a big component of our competitive advantage.

!"#$%&$'()%*+$,$)-$."//"0$1%*-&$(*$(2)(*/(+-3What we hear consistently from consumers is they want to buy

from companies that they know, and they want to buy from compa-nies that they trust. When you have a business that's focused on just one bottom line—profi t or increasing shareholder value—it's hard to genuinely convey the message that the company is actually thinking about the consumer as something beyond a means to an end. While we aren't perfect and don't claim to be, I believe our growth is the result of our consumer trusting us.

But it seems there would be quite a bit of costs associated with '()%*+$2-1%)-4(.1-&$"5/&%2-$"6$74",$/8

Yes, but we don't think about them as costs. It's just the way we go to market. For example, we invest a lot in our people. Aside from a workplace that offers a gym with every class from aerobics to Zumba and paid time to actually participate in those activities, we provide sustainability benefi ts so employees can get a loan on a hybrid or bio-diesel vehicle. Those credits can cost up to $6,500 per loan. It's not cheap, but it's a change in ideology—the belief has to come fi rst. I read a recent study asking how many people were excited or en-gaged at work; 70 percent responded negatively. I know because I used to be one of them. People are what drive everything so why not invest in them, and the same goes for the rest of our aspirations. The whole package is how we go to market. I can't stress that enough.

From triathletes to climbers to cyclists, Clif Bar exists to serve the athleteOf the many subsidized concierge services, bouldering lessons are a favorite

Business: Organics account for nearly 70% of all ingredients we buy, and looking forward, we have set a company-wide goal to source 80% organic or certifi ed-sustainable ingredients by 2015.

Brand: We will continue to meet and engage with our enthusiasts face-to-face during their activities and at their points of passion. The goal is to ensure we stay focused on sampling and sharing our foods with new and existing consumers.

!Community: At the heart of Clif Bar’s community efforts is Project 2080. It's an employee-run program that makes it easy for staff to organize and participate in community volunteer efforts on company time. In 2012, the company aims to donate 7,280 hours to grassroots community organizations. We’ve set an annual goal to donate 10,000 hours by 2015.

People: We have assembled an assortment of benefi ts and services to help our employees stay healthy and live the life they want to live. We evaluate these benefi ts each year to ensure we are helping to inspire and assist our team in accomplishing their personal and life goals.

Planet: At our headquarters nearly 70% of waste is diverted from landfi lls through recycling and composting. Our goal is to reach 90% by 2015.

Clif Bar's President Sets Goals Across the Company's 5 Aspirations

12 // NOVEMBER 2012 // OUTDOOR USA MAGAZINE

[cover story]

The first distribution channel for Clif prod-ucts was actually trailheads, where Founder Gary Erickson would pass out his new bars until they finally hit sports retail shelves in 1992—roughly two years after the first prod-uct was conceived. Today, distribution is en-tirely more sophisticated with a much broader scope. However, the focus on the endurance athlete and the sports specialty store remains unchanged.

According to Leisure Trends data, Clif Bars—the flagship product—have a market-leading share of 46 percent in the sports spe-cialty channel. What this doesn't include are health clubs, gyms and grocery stores, which account for a significant portion of the brands' distribution.

To understand the bigger picture, we sat down with Scott Whipps, director of retail sales North America, who brought his more than twenty years of specialty sporting goods

sales experience to Clif Bar in 2005. Scott ex-plains that although the sports nutrition mar-ket is unique, selling Clif Bars is akin to selling sports equipment.

Can you share some key target markets for Clif Bar?

Run, outdoor and bike. At Clif Bar, we are all cyclists, runners, and climbers so technically we are the target consumer. Our job is to sell to retailers, but it can feel like we are selling to ourselves [laughs]. Ultimately, our focus in these markets is something more objective; it's what is best for the endurance athlete.

!"#$%&'%$"(%'&)*&+,#*,(%-.%'/-0$'%specialty for Clif Bar?

Sports specialty is going to be more impor-tant than what we generate in sales because it's the heritage of who we are—athletes un-derstand our value proposition better than the average consumer. We go to ten sports spe-cialty shows a year; it's like the bullseye on the

"Sports Specialty is the Bullseye"

Brand: Necessity is the Mother of Invention

target. We are talking about a dedicated team of four or five people who all they do is focus on that channel.

How has the company developed that channel?

We have probably ten to fifteen programs

focused strictly on that market including an annual dealer summit, where we bring in dealers from around the country to hear their feedback on how we are doing things. We also conduct regular promotions so retailers can hit key price points and be competitive with chains like Whole Foods or Trader Joe's.

Finally, how do you position Clif products in the distribution channels?

Sports nutrition is one of the few unifying categories in sports. Crampons are outdoor specialty products; tubes are bike store prod-ucts; running shoes are running specialty. Sports nutrition has now become part of the equipment of sport.

1*$(0('$&*)2%3-%"-4%$"(*%5-%6-7%5(+*(%89&.%Bar to the consumer?

We actually define our products as being essential equipment. If you look at the top ten things you never leave home without as an en-durance athlete, food is always one of them.

Tom, taste is subjective. How does your $(#:%'$#6%-;<(,$&=(%4&$"%>#=-0?

When we work on a new recipe, we always have set nutritional targets. We have an expert nutritionist on board who determines a nutritional profile for the end consumer, and that's where we start. In-stead of it being about what I like subjectively, we measure objective levels of ingredients. For example, if we measure a level 5 on sweetness, and we have determined the consum-er wants an 8, we can work to achieve that result.

How do outdoor activities factor into that taste equation?

What we've determined is quite interesting: taste is connected to the level of activity. So what your body craves before a 12-mile run, during, and after are three completely different recipes.

Can you think of an example?Take our Clif Blocks margarita flavor in the

chewables category. It's intentionally three times saltier than the other flavors. If we ate it now, we would be like “Whoa” that's a lot of salt. But during intense exercise, you need to replace those electrolytes so it tastes great.

@-7%#9'-%"#=(%,"-,-9#$(A>#=-0(5%,"(4'We have been experimenting with cocoa

because it is a good balance of sweet and bitter during ex-ercise. Up until now all of our flavors and our competitors' flavors have been fruit-based. We want to be the leader in this category and give retail-ers another reason to choose us, so we broke out the choc-olate mix.

How is sustainability incorporated into R&D?

First off, we purchase more than 40 million pounds of

organic ingredients a year, which represents about 70 percent of our total ingredients. Also, we have a group internally who works with suppliers to assess not only organic quality, but their farming practices and how workers are.

How about with packaging?Packaging is huge or us; our Litter Leash

is a great example. Many years ago when we first came out with energy gels, the packag-ing style in the marketplace included a pull tab that could be easily littered. As a solution, we developed a patented leash that allows the product to be opened without the extra trash—the mechanism actually turned out to be more efficient for athletes.

Chris, what does your role as brand Manger for Clif Shot entail?

Clif Shot is our brand of products squarely positioned for the performance athlete. Brand management here in-volves product development, financial management and the marketing and communica-tions piece.

Does your role intersect with Tom's on the product development side?

Yes, as a company we use organic ingredients whenever possible. It's something we are very serious about. I work with Tom and other product developers looking at the quality and cost of those ingredients and understand-ing how we can mitigate the latter costs for the Clif Shot brand; so forecasting, contract-ing volumes, changing suppliers, and in some cases even changing ingredients.

Do you work with athletes in this area too?Yes, athletes tend to think of food as a tool,

and it is, but they aren't going to ingest the calories they need unless the experience is enjoyable. It's not uncommon for us to do a flavor version #25. Also athletes and events are the primary focus of our marketing and communications strategy.

How has that focus evolved?Back when I started in 1998, a lot of it had

to do with just getting a logo on somebody; the moving bill-board concept [laughs]. Name recognition is important—no one is going to buy your prod-ucts unless they know you exist. Since the beginning, ath-letes have always been our best word of mouth generators. We started sponsoring grassroots athletes, and now we sponsor professional competitors like triathlete Chris McCormick and the Garmen Sharp team, a Tour

de France level cycling team.

This strategy still works today?We've found that the best way to commu-

nicate the value of Clif Shot is through athlete interactions. We teach them how to tell our story to the consumer. We want them to say, “here's the Clif Bar products I like; here's how to use them; and this is why I like them.” It goes back to a whole grassroots strategy where Gary, when he started Clif Bar, would go to trail heads and literally pass out Clif Bars. Our greatest influence is when we can get the product in the hands of our audience during the point of passion—when the consumer is enjoying the activity he/she loves.

The Clif Bar story goes something like this: In 1990, Founder Gary Erickson, on a 175-mile bike ride, decides he can't stom-ach another unappetizing energy bar. Today, he refers to this moment as the epiphany; the point at which he realized he could do it better himself. Erickson, inspired by a need for nutri-tious energy foods that taste good too, retreats to his mom's kitchen, where he spends the next six months perfecting the first Clif Bar recipe.

Twenty years later, the concept to production process stays true to its roots. However, instead of Gary working tirelessly through the night in his mom's kitchen, the company has an entire team—from nutritionists and certified food chemists to former athletes and pastry chefs—all working tirelessly in the top-secret Clif Bar kitchen located in the Emeryville, CA head-quarters.

Tom Richardson, Director of R&D, explains, “although we have formal procedures for developing new recipes, some-times we just have kitchen play days, where we see what we come up with. We do this on average about once a month.” Tom has been with Clif Bar since 1997, before the company actually had an official R&D team. He has helped Clif Bar grow

from one flagship product to fourteen different brands, which encompass specialty categories like the Luna Bar—designed for women's nutrition; the Kid Z bar—tailored to the nutritional needs of young kids; and the Protein Builder Bar—added pro-tein for fitness training.

FROM OATS AND GRANOLA TO GELS AND CHEWSOf the myriad of recipes Tom and his team have crafted

over the years, the outdoor specialty channel seems to have acquired a taste for the Clif Shot brand. While Clif Bar is the original performance product, Clif Shot is an alternative way to deliver those nutrients.

The brand as a whole provides a new breed of performance products with tastes specifically tailored to a more extreme end consumer. It is a trifecta comprised of an energy gel, which has been on the market since 1997; Clif Shot Bloks, an en-ergy packed “gummy bite” introduced in 2006; and the newest of the three, an organic electrolyte replacement drink that hit shelves in 2007.

Within the sports specialty channel, what is unique about gels, chews and energy drinks, is they revolve around one pri-

mary target: endurance athletes.

ENDURANCE MARKETINGThe endurance segment of the outdoor industry is being

explored more and more, especially in light of growing trends in trail running and obstacle races like the Spartan Races and Tough Mudder. Clif Bar is responding to the fact that outdoor athletes pushing their bodies to the edge are demanding prod-ucts specifically tailored to their caloric needs that can be digested quickly. If Clif Shot is the answer, then what is the branding strategy accompanying the product innovations?

We asked Chris Randall Brand Manager for Clif Shot, who made it abundantly clear that athletes are the brand's word of mouth generators—they are best positioned to tell the Clif Shot story. He also made it clear that although the tastes of contem-porary performance products seem untraditional in comparison to energy bars, the marketing strategy itself fits right in line with tradition. He says, “Our marketing has remained relatively grassroots through athlete interactions and events so I wouldn't say that strategy is overly innovative, but it is remarkably ef-fective.”

Tom Richardson // Director R&D Chris Randall // Brand Manager, Clif Shot

Retail Director Scott Whipps is a die-hard SF Giants fan

10 // OCTOBER 2012 // OUTDOOR USA MAGAZINE

Cover Story:

BY JOSEPH GOMEZfrom alameda, ca

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Steve Rendle enjoys the new office where he manages 8 of VF's most prized brands

On a tour of the new VF Corp campus, Out-door USA sat down with the Steve Rendle, vice president, VF Corporation and group president, Outdoor & Action Sports Americas who over-sees the operations of the eight brands within the VF outdoor and action sports coalition. Ev-ery morning he sifts through sales data cor-responding to brands worth several billion dol-lars annually. In light of the new campus and the growth of the coalition as a whole, Mr. Ren-dle shares with us how VF's backend prowess allows its individual brands to focus on their core products, customers and passions.

Steve, you have quite a lengthy title. Can

you tell us about it?

There's two pieces to what I do. The vice president, VF Corp. portion puts me into a lead-ership role with the operating committee of the larger VF corporation. Among many things, I provide guidance on how we think and act as a whole, so this includes things like acquisition opportunities and brand development.

What then is your role as Group President

of Outdoor Action Sports America?

My value in that corporate role is my con-nection to brands, specifically those in the outdoor and action sports industries. There are eleven brands globally that are grouped into this coalition, but three are headquartered in Europe. I oversee our operations in the Ameri-cas.

How did you come into this role?

My passion throughout my career has al-ways been to lead a brand. I led The North Face for seven years, and we typically look to grow from within. When I was offered the cor-porate role to oversee the coalition, I thought how could I turn down the opportunity to lead eight [laughs].

What is the idea behind the structuring of

the outdoor and action sports coalition as

a corporate group?

Historically, outdoor and action sports sat under different leadership. As we saw how to streamline reporting lines, the grouping was just an obvious next step because the indus-tries are very similar. They are activity based, and they really take on a lifestyle for their consumers. In many ways both are defined by athletes. A North Face athlete team and a Vans athlete team are driven by different sports, but the passions and motivations are the same.

Some action sports brands are struggling.

Why do you think that is?

It's a very cyclical market based on fluctuat-ing trends, and it's all about positioning. For us,

we have the number one skate brand in Vans and the number one surf sandal brand with Reef. Some of the competition may be strug-gling because they are a bit over-extended.

Why have your action sports brands grown

despite a slow market?

Let's look at Vans, for example. With Vans we have been very thoughtful about who the consumers is, where does that consumer shop and what permission points do we have to ex-tend beyond classics and skate shoes into the lifestyle portion of that line. We are extremely careful about how we position ourselves be-cause we understand the consequences. For example, with Reef we felt we were overex-tended a few years ago.

How was Reef over-extended in the past,

and how did you recover?

We pulled back, and focused on a single core product: sandals. We re-evaluated the concept behind the brand—Reef is about comfort, that Brazilian beach lifestyle. We used the sandals to convey that message and slowly extended from there into closed toed sandals. We also kept board shorts, hoodies and t-shirts because a lot of that is branded logo wear. The idea was to expand in concen-tric circles outside of Orange County to places like Florida. We also seized opportunities to grow internationally in Europe, Asia and Latin America.

Can we expect future acquisitions to the

VF outdoor and action sports coalition?

Yes. We have seen a lot of growth there, and we are very public about our desire to develop that space.

What do you look for in prospective

companies?

We like already successful brands with strong potential for international influence. We look at brand culture, people, what do they know about their product and their consumer. In any acquisition, you are acquiring people so it's very important that we maintain the integ-rity of the management team.

What makes VF a good acquisition

partner?

The strength of VF is our strong backend infrastructure. We provide the finance, sup-ply chain, HR and customer service structures so brands can easily plug into our corporate system and spend their time on product de-velopment and marketing. Everything that's consumer forward is what we want our brands to be thinking about. We on the coalition and corporate side spend our time enabling that success on the backend.

With so many brands, what is the report

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My favorite report is the weekly retail flash. It shows me sales data for our stores and web-sites and gives me an immediate sense of how each brands' products are selling across each channel. I can see sell-through data from both a category and dealer standpoint, and also a lot of divisions are able to report on the whole-sale channel as well.

We noticed you have a degree in

Kinesiology.

In college I tried business classes, and they bored me to death. My mentor pushed me to

follow my passions thinking that good things would come naturally. I was a competitive road cyclist, and I rode crew so I became passion-ate about understanding how the human body works.

How did you go from Kinesiology to a

corporate executive position?

I had options to pursue a medical degree or become an educator, but I wanted to do business. At the time, Gore was introducing a product requiring a physiological understand-ing. That performance fabric was my way into the outdoor industry.

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For the first half of 2012, Outdoor & Action Sports revenues grew 53 percent, with organic revenue growth of 13 percent (16 percent in constant dollars). The recent addition of the Timberland and Smartwool brands have contributed $239 million to revenues. Also, The North Face is the coalition's largest brand. Its global revenues in the second quarter in-creased 45 percent with the Americas, Europe and Asia regions each growing in excess of 15 percent in constant dollars.

Outdoor and Action Sports Brands: The North Face, Eastpak, Jansport, Kipling, Napapijri, Reef, Vans, Eagle Creek, Smart Wool, Timberland, Lucy

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The East San Francisco Bay breeze keeps the new campus cool in warm, sunny Alameda, California

OUTDOOR USA MAGAZINE // OCTOBER 2012 // 11

[cover story]

The New HQ Brings the Outside­InFrom the co­op garden to VF's secret lab, Outdoor USA takes you on a tour

“The old North Face office was chosen be-cause it was the cheapest place for us to be,” Todd Spaletto reminds a group of journalist in-vited for an exclusive tour of the brand new VF Corp Bay Area campus.

But things have changed for The North Face, significantly, from millions in revenues to bil-lions today. Similarly, fellow brands Lucy and Jansport—also previ-ously located in the San Francisco Bay Area—are on the rise contrib-uting to the 45 percent revenue increase in the second quarter for the VF outdoor and action sports coalition.

“Consolidating the three brands into one location just made sense culturally and from a brand message point of view,” explains Steve Rendle, president, VF Outdoor.

The new VF Outdoor Coalition Campus houses 470 plus employees in its 160,000 square ft of office space. Completely built from scratch, the campus is comprised of three office buildings, a fitness center, numerous outdoor workspaces and training areas and a community garden.

This is certainly an upgrade for The North Face who previously shared a modest ware-house space with Snapple Bottling Co. Rendle asks jokingly,“How can we expect our em-ployees to focus on their own brand, when we have trucks of other brands coming in and out all day long?”

Although he is joking, brand identity is a se-rious concern with any large corporate move, especially one that consolidates the headquar-ters of three rapidly growing brands: The North Face, Jansport and Lucy. “We want those brands to remain very distinct, to maintain their own culture; their own DNA, which is one of the risks of moving to a campus setting—homogenization,” says Rendle. “But we also wanted to create an environment that fosters interactivity and collaboration.”

It's a delicate balance, and VF has achieved that balance by investing in overlapping inter-ests. The idea behind the campus is to allow distinctive success to grow out of shared val-ues like collaboration, an active lifestyle and sustainability. In other words, VF has brought the outdoors “in,” providing all the essential components for success, so all that is left for brands to do is channel individual strengths into great products.

SHARING A SPINEA lengthy corridor, referred to as the spine,

connects the four campus buildings, and it's more than just a hallway. VF could have easily designed a campus with separate buildings, so why connect them?

It's symbolic. “The spine is a common thread that aligns everything on campus,” says Rendle. Furthermore, it was designed to accommodate future developments. The spine provides the option to build three additional 55,000 sq ft buildings that would more than double the current office size. Not only does VF see value in cohesion, but the corporation has left the door wide open for potential ac-quisitions.

NET ZERO ENERGYAdam Mott, head of sustainability at The

North Face, set the bar high. In fact, higher than anticipated. Given the energy intensive VF structures in place to justify ROI, board members were left scratching their heads when Mott proposed that the new campus be

100 percent energy neutral, relying entirely on renewable energy.

Earning a LEED certification is one thing, but 100 percent energy neutral is no easy feat. A combination of wind turbines, clever design and a powerful array of photovoltaics will turn Mott's idealism into reality. “With all these

components combined, we will soon be at 100 percent net zero electricity,” says Mott.

The solar parking structures which will take up nearly 85 percent of the campus and in-clude several electric car charging stations are key developments in achieving this goal. But

it is the clever, smaller features like the solar awnings that go a long way as well. These aw-nings are essentially a series of shelves above windows that serve two functions; one, they generate electricity; and two, they shade the interior keeping buildings cool in the summer time.

The question of net zero energy is not lim-ited to the source of power, but extends to the efficiency of use. The best example is with lighting. In addition to using mostly natural lighting, all lights are on movement sensors and use CFL's or T5 bulbs, which are far more efficient than halogens.

Also impressive is the building’s evapora-tive cooling system. The system brings in 100 percent fresh air with coolants and all other chemical components having been removed from the process. As if they weren't getting enough fresh air already, The North Face em-ployees will be excited to use operable win-dows for the first time, a luxury the old ware-house was without.

NET ZERO WASTE“We also have a goal to get to net zero

waste,” says Mott. One future development is a recycling center where employees can re-cycle just about anything from standard paper and plastics to electronics like cell phones and printer cartridges. Employees will be able to bring items from home and recycle them at work as well.

Mott shared that one of the biggest prob-lem areas the companies faced was that most of the products are packaged in plastic poly bags. As a solution, VF found a local company that recycles the bags and turns them into plastic lumber for outdoor furniture. “Any time we find a waste chain that we can’t strain or eliminate, we try and find a way to recycle it,” Mott explains.

Rendle responds, “Adam actually won't al-low us to have garbage cans at our worksta-tions! We have to get up and find a recycling bin for all those things you are tempted to conveniently toss away. It drives people a bit

“...as a group going to market against a set of competitors,

we are much more powerful.”

Wind turbines are one of many features contributing to the net zero energy plan94 percent of employees have a direct line of sight outdoors

Jenn Myron general merchandise manager: “We are a premium women's activewear brand. The thing that is important to us is gaining the insights from our customer and allowing her to choose how she wants to wear the product. If she wants to wear a yoga top when she's in the gym or a running bottom

when she's doing a cross-fit class, that's what we are for.”

Paula Kosmatka VP research design and develop-ment at Jansport: “Forty percent of 14-20 year olds own or have owned a Jansport backpack. Our driver is what you see on the backs of kids every school year—we sell over a million per year. Where the tra-ditional outdoor company would start with an outdoor product and market to youth, we get youth into the outdoors first.”

Todd Spaletto, President at The North Face: “Many people don't know this, but The North Face started as a retail store in the North Beach neighborhood of San Francisco. The Grateful Dead played at the opening night, and Hells Angels worked the door. With this in mind, the connecting point of where we are today and where we came from sits behind our slogan, ‘Never Stop Exploring’.”

12 // OCTOBER 2012 // OUTDOOR USA MAGAZINE

[cover story]crazy, but it’s working.”

OUTSIDE-INBringing the outside “in” was the main

theme in designing the campus. This is why 94 percent of employees have a direct line of sight outdoors from their desks—in the old building this was a privilege enjoyed only by upper management. This time around, the tables have turned with the mangers' offices located in the center of the buildings and the bulk of employees working around the perim-eter closest to the windows.

Bringing the outside “in” also means build-ing places to take work outside. Employees can choose from one of many outdoor work-spaces and meeting areas, each with WiFi coverage. Additionally, the campus provides a bouldering area and numerous waterfront hik-ing, biking and running trails. Weekly exercise is encouraged, which explains the construc-tion of the new 1000 square ft fitness center.

The VF fitness center is not only outfitted with new weight and exercise equipment, but includes separate rooms for a vast selection of weekly yoga, spin and aerobics classes. The classes feature a spectrum of intensity levels from midday meditation to more extreme ex-ercises like pilates boxing and “boot camp,” led by a hardcore trainer who resembles Mr. T.

“I think the key for us is if you work in an environment that fosters environmental re-sponsibility and an active lifestyle, it will transfer into your job,” says Rendle. “This is important because we make environmentally responsible products for an active lifestyle.”

HOME GROWNIn doing research for the design of the cam-

pus, VF found that one of the most important features employees demanded was a cafe with healthy food options. But VF did them one better. It built a cafe with all food locally sourced within 150 miles, in addition to subsi-dizing the cost of meals which include break-fast, lunch and dinner. In fact, some of the food won't even need to be subsidized because it will be sourced from the campus community garden.

The idea for a shared gardening space can be traced back to the acquisition of Timeber-land last year. “One thing that impressed us about Timberland was they have a large or-ganic garden in front of the headquarters,” says Rendle. “The whole thing is maintained by the employees. We all thought it was such a profound part of their culture, and it inspired us to make that happen here.”

Right now it's just a patch of clovers, but the VF garden will grow limes, lemons, herbs and seasonal vegetables, which will become ingredients for the adjacent cafe. However, the whole point is that the success of the garden depends on participation—it is a community project. So if the garden is to be a flourishing ecosystem of healthy produce or a desolate space where vegetables go to die, it is entirely up to employees. Naturally, VF is optimistic about the garden, so much so, that it has hired a company to pick up excess produce and dis-tribute it to local food banks.

Rendle says, “We subsidize food at the cafe with a meal costing roughly $6.50. I am confi-dent this cost will drop as we start producing our own food.”

VF'S TOP SECRET LABReminiscent of the esteemed Nike Kitchen,

VF unveils the laboratory for its advanced proj-ects team, an elite division of mad outdoor scientists. Performance qualities like tensile strength, abrasion resistance and waterproof-ness can now be examined in-house with spe-cially designed equipment. “Right now we are doing some testing with down versus synthet-ics,” says Rendle.

The Yurt Innovation Center is evidence of VF's research, design and development prow-ess, which is probably why the facility is off limits to guests. The lab's elusive rounded

shape and complete lack of outside visibility has all passersby wondering, “what the heck goes on in there?” And VF intends to keep it that way with a strict closed door policy.

“This is an area that is new for us that we are committed to,” explains Rendle. “We will resource it not only from our own brand and coalition funding but from VF Corp. funds as well. We are actually in the process of build-ing out two innovation centers, one in footwear and one in apparel.”

STRENGTH IN NUMBERSThe new campus was not a spontaneous

effort. It grew out of a lot of internal research as well as consumer research about brand purpose and function. Rendle explains, “These last 2 years, VF has really spent a lot of time defining our brands' DNA, our brand promise, and most importantly, determining what are the reasons to believe in the brand.”

The campus itself is a manifestation of the common characteristics consumers have to believe in Lucy, Jansport and The North Face. It is a culmination of the brand message, the lifestyle and values, but it's important to un-derstand that there is more than meets the

eye. The new campus illustrates a greater business strategy: the idea that the collective positioning of brands into a group or coalition in similar industries is more effective than en-couraging individual competition.

Rendle affirms this concept when he ex-plains, “The core of our business proposition is we want to succeed, and we have strategic processes to enable that. We go to market as a group of brands, certainly individually mo-tivated as far as a sales plan, but as a group going to market against a set of competitors, we are much more powerful.”

>> The New Campus At a Glance <<

The "Spine" is a long corridor connecting all four buildings, enabling collaboration between the brands

Solar awnings use solar cells to generate electricity--efficient design and creative features go a long way

Employees can charge their electric cars at work, bike, or take the ferry that travels to and from downtown SF

This commons area features outdoor workspaces and the community garden that will produce food for the cafe

Now a temporary parking lot, the area can be used to add three new buildings that would accommodate organic growth and future acquisitions

OUTDOOR USA MAGAZINE // DECEMBER 2012 // 15

Greenpeace argues that marketing claims don't refl ect the impact of outdoor clothing

How the industry can respond to consumer concerns about toxins in apparel

Greenpeace Finds PFCs in Outdoor Clothing

BY JOSEPH GOMEZ

[report]

Greenpeace, an international non-govern-mental organization for the environment, has released a critical report this past November examining the continued use of fl uorocarbon chemicals in outdoor clothing. It is part of the organization's ongoing “International Detox” campaign, which aims to “detoxify” all aspects of the fashion and clothing industries.

The report entitled, Chemistry for Any Weather, highlights the threat fl uorocarbon-based compounds pose to the environment and human health. It also tests a variety of outdoor apparel for the presence of perfl uori-nated compounds. Patagonia, The North Face, Marmot, and Mammut are among the thirteen brands whose clothing was included in the study. A total of fourteen different jackets and pants were tested—each sample contained perfl uorinated compounds (PFCs).

According to the organization, the purpose of the report is not to shame any one brand or product, but rather to challenge the outdoor industry—which prides itself on environmen-tal stewardship, health and well being—to prompt more stringent regulations for PFCs and other harmful toxins. It also urges textile manufacturers to replace hazardous produc-tion materials with safer alternatives that Greenpeace argues are equally as effective.

A BRIEF LESSON IN CHEMISTRYPFCs are entirely man-made compounds,

the molecules do not occur in nature. The terms PFOS (perfl uorooctanesulfonic acid), PFOA (perfl uorooctanoic acid), PFCA (perfl uo-rinated carboxylic acid), etc. refer to different fl uorocarbon molecular structures that fall into the broader family of PFCs. PFCs differ in the number of carbon atoms that make up their chemical backbone, which is why some com-panies claim they only use C6's (6 atoms) as opposed to C8's (8 atoms).

However, what all PFCs have in common is

that they are comprised of fl uorine atoms on a carbon chain. This is important because the carbon-fl uorine bond is unusually strong, so strong that it is not known to degrade by any natural process. The resiliency of these bonds is what gives fl uorocarbons the water/oil re-sistant properties that make them so useful for enhancing outdoor clothing.

USEFUL BUT HARMFUL?Greenpeace holds that PFCs are hazardous

to the environment because they are so stable, and thus, could persist indefi nitely. The report mentions that the compounds can accumulate in our bodies and those of animals by enter-ing the blood stream from sources such as drinking water, food and dust. The report also claims that PFCs are endocrine disruptors, which can adversely affect the reproductive system, damage the immune system and lead to increased incidences of cancer.

Additionally, Greenpeace is suggesting that what we don't know about some PFCs is of equal concern. While compounds like PFOS and PFOA have been extensively researched, there are many derivatives about which we know very little. For example, there has been much speculation about whether a C6 PFOA structure is as potentially harmful as a C8.

PUT TO THE TESTGreenpeace purchased 14 items of outdoor

clothing from 13 brands. These included four jackets, one pair of pants for children and eight women's jackets. A 20x20 cm fabric sample was cut from the back of each clothing piece and sent to two independent labs for testing.

The fi rst lab tested for a list of perfl ourinated and polyfl uorinated compounds such as PFOA, PFOS and PFCA. These are commonly used to construct waterproof, breathable membranes in outdoor clothing. Additionally, the lab tested for fl uorotelomer alcohols (FTOHs) and acry-lates (FTAs). These latter compounds are typi-cally used as surface treatments to enhance the water/oil resistance of fabrics; they can be

converted to PFCs through oxidation. Finally, the second lab searched for other hazardous chemicals such as plasticizers, toxic surfac-tants and carcinogenic amines.

THE RESULTS ARE INBecause there are currently no regulations

for PFOA, Greenpeace used the European Union (EU) limit for PFOS—1 microgram per meter squared (1/µg2)—as a comparison value. Levels of PFOA exceeding the EU value were found in fi ve of fourteen samples, in jackets made by Jack Wolfskin, Patagonia, The North Face, and Kaikkialla and the child's pants from Marmot. The lowest concentra-tions were found in jackets made by Mountain Equipment, Vaude and Zimtstern (see chart).

The highest sums of PFCAs were found again in jackets made by Kaikkialla and Patagonia with the lowest concentrations in samples from Mountian Equipment, Seven Summits and Zimtstern. Furthermore, FTOHs and FTAs were found in 8 of 14 samples with the highest con-centrations in jackets made by Mammut and Vaude and still signifi cantly high sums found in samples from Kaikkialla and Patagonia.

As far as the second lab's fi ndings, the most alarming discovery was with plasticizers, which are commonly used to soften stiff plas-tics in textile manufacturing. The report claims these compounds can damage the immune system and reproductive system with children being at a higher risk. The Northland child's poncho contained the highest concentration, 5,700 mg/kg—nearly fi ve times the EU per-missible limit of 1000 mg/kg.

Aside from plasticizers, most other toxins were found in low to medium concentrations that meet current regulations.

SO HOW CAN THE INDUSTRY RESPOND?The report fi ndings have provoked con-

cerns among consumers and members of the industry. In fact, many brands included in the study, and even some who were not, have released offi cial responses to address the is-

sue. So what should outdoor specialty retailers respond to customer concerns? And how can outdoor industry brands move forward?

REFER TO THE ENVIRONMENTAL PROTECTION AGENCY (EPA)

The EPA chemical control division has been investigating PFC and fl uorotelomer com-pounds since the late 1990's, and there are several EPA stewardship programs currently in effect. Although the EPA does validate some of the health claims made in the Greenpeace report, the agency maintains that the routine use of consumer products does not pose a concern. Outdoor retail customers can be re-assured that there are no steps the EPA rec-ommends to reduce exposures to PFCs.

INFORM CONSUMERSIt is important for stores to inform consum-

ers on the issues at hand. Fact sheets, in-store references and general discourse can help the market itself infl uence the degree and scope to which these compounds are regulated.

CONSIDER HOW BRANDS HAVE RESPONDED

Transparency and cooperation build trust. For example, Nikwax has published an FAQ page on its website describing the different PFC compounds, how to assess divergent marketing claims and where to fi nd informa-tion on the latest research. Similarly, Jack Wolfskin, whose apparel contained signifi cant concentrations of PFCs in the report, released an offi cial response supporting the goals of the Greenpeace initiative. The brand also set a goal to make the water-repellent fi nish on its jackets PFOA-free by 2014.

SEIZE THE OPPORTUNITYConsumers rely on knowledgeable sales

staff to provide the latest information on out-door products. Ultimately, the Greenpeace re-port fi ndings present an opportunity for stores to engage customers about the values of the outdoor industry and the performance of out-door clothing.

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28 // OCTOBER 2012 // OUTDOOR USA MAGAZINE

[launch]

BY JOSEPH GOMEZ

Will the new industry­exclusive tool clean up global supply chains?

Sustainable Apparel Coalition Launches Index

A recent conference held in Hamburg, Germany engages European and international brands

Responding to an industry need for in-creased transparency and collaboration in cleaning up the supply chain, the Sustainable Apparel Coalition (SAC) has assembled a high-ly influential group of companies who account for more than a third of the global market share in the apparel and footwear industries—an impressive accomplishment seeing as the new nonprofit trade association was founded in 2011.

THE PROBLEMAccording to the American Apparel and

Footwear Association, Americans spent rough-ly $340 billion on clothing and shoes last year. 99 percent of that clothing and 98 percent of that footwear is sold in the U.S., but is pro-duced in factories abroad. Because there are so many multinational links in the production chain of a single garment and the fact that most companies don't own their means of production, it is nearly impossible to trace the sustainable impact of a single product or, more importantly, the total impact of the nearly 20.5 billion garments and 2.3 billion pairs of shoes produced annually.

THE SOLUTIONUnder a new accountability and information

sharing platform, the Sustainable Apparel Co-alition intends to lead an apparel industry—and eventually a footwear industry—that pro-duces no unnecessary environmental harm. To this end, the coalition has just released its preliminary version of the Higg Index; a self-assessment tool measuring the impact of the supply chain. The name is appropriately derived from the search for the Higgs boson particle. SAC Executive Director Jason Kibbey explains that the Higg Index embodies “our search for the particles of sustainability.”

Intrigued by the recent development of the index and the pure size of the organization's elite membership including brands like—Pa-tagonia, Gap, Levi's and Walmart?—Outdoor USA discussed with Kibbey what an industry-facing, green index means for the footwear and apparel industries. We also gained some insights into what future improvements to the index may yield.

ODD COUPLE. BOLD MOVE.The SAC has a unique history sprouting

from an unlikely duo: Patagonia and Walmart. Walmart, heavily criticized for its large envi-ronmental impact, voracious land consumption and lofty green claims reached out to Patago-nia, who is widely regarded as a paradigm for corporate responsibility. After much delibera-tion, the odd couple propositioned key stake-holders in the apparel and footwear industries, requesting their cooperation in establishing a unifying measurement for sustainability prac-tices. An excerpt from the bold invitation reads:

“Standardization will enable us to maximize sustainability benefits for all buyers without investing in multiple technologies and certi-fication processes, and ultimately empower

consumers to trust claims regarding sustain-ably sourced apparel. As an industry, we will benefit from the unique opportunity to shape policy and create standards for measuring sustainability before government inevitably imposes one.”

The letter was signed by John Fleming, then Walmart's chief merchandising officer, and Pa-tagonia Founder Yvon Chouinard.

FASTER THAN THE SPEED OF LIGHTLess than three years later, the Sustainable

Apparel Coalition was born, and the release of the Higg Index this August soon followed—a powerful response in such a short period of time, but how? With some added expertise from Bluesky Consulting Group and a board of directors consisting of industry veterans from Adidas, Nike, Patagonia, the OIA, REI, Gore and Walmart to name a few; the coalition seemed destined for success from the get-go. Not to mention, receiving valuable input from univer-sities and interest groups like the Environmen-tal Defense Fund probably expedited things.

However, the single most critical strategy in developing the Higg Index so quickly was building upon previously existing indexes, specifically the OIA's Eco Index and the Nike Environmental Design Tool.

THE NEW, NEW INDEXThe OIA Eco Index was born from the re-

lease of Timberland's Green Index in 2006, which inspired conversation about an industry wide eco-initiative. Over the course of several years, discourse developed into action when the OIA, in collaboration with the European Outdoor Group and project facilitator Zero Waste Alliance finally launched the Eco Index framework at the 2010 OutDoor Show in Ger-many. Backed by a number of participating outdoor brands, the index was one of the first comprehensive attempts at standardizing and measuring sustainable practices.

Simultaneously, Nike had just released its Environmental Design Tool, a building block for evaluating the waste, energy, water and toxic chemicals that go into manufacturing processes and materials. Drawing from the bigger picture of the apparel lifecycle, the Higg Index owes its ingenuity to its Nike and OIA

predecessors.

HIGG INDEX 1.0The first generation Higg Index is an indi-

cator based tool for apparel that allows sup-ply chain stakeholders to conduct categorical self-assessments of environmental perfor-mance at the brand, product and facility lev-els. The analysis spans key energy intensive and often wasteful processes like packaging, industrial manufacturing, transportation, use and end of life.

To understand what the index is, it's impor-tant to understand what it's not. Despite the SAC having several large retailers as mem-bers, the Higg Index does not assess retail activities. It examines only supply chain pro-cesses. Also, the index is not metric based; it doesn't measure quantitative data or set numerical benchmarks--yet. Instead, it asks practice-based, qualitative questions, and the answers to those questions dictate a user's score. Moreover, those scores and the index itself are not visible to the public.

For now, the index is purely industry-facing. Consumers should not expect to see a score or tag attached to products any time soon. It is solely a tool for internal visibility within the coalition—nothing less, nothing more. In fact, the SAC does not intend to use the Higg Index

to set or enforce industry-wide standards. “We aren't trying to enforce rules or regula-

tions,” says Kibbey. “We have created an ob-jective tool for the industry, and the value is in awareness. We want to enable companies so they can identify areas where improvements can be made in the supply chain.”

HIGG INDEX 2.0Future improvements to the index are in the

works. The scope of the next generation will likely be expanded to incorporate footwear some time in Fall 2012, with the possibility of bridging other categories like equipment and hardgoods much later down the road. Addi-tionally, the SAC hopes to integrate quantita-tive data into the scoring process as well as add a component that will assess social and labor impact areas. Members of the coalition can also look forward to standard and certifi-cation equivalencies making use of the index much easier.

Finally, there is talk of a consumer-facing score, but “this is a long way off,” Kibbey ex-plains. “Yes, we see the value in a consumer rating for products, and we are working to-ward this, but the main issue now is reliability. We cannot communicate this data to consum-ers until we can be absolutely certain that it is credible.”

WHY INDUSTRY FACING?If the end is a cleaner supply chain, then

the question is by what means—what is the most effective way to achieve this? Through the actions of the SAC, we can see that the organization has determined that this process should be participatory not authoritative. So the question then becomes, how do you drive participation?

For the SAC, you create a platform of self-analysis and information exchange that is risk free. It is risk-free because companies are not penalized for their scores nor is the informa-tion public to consumers, so it cannot hurt them in that way. The SAC merely provides the tools for improvement, any pressure to meet benchmarks comes either internally or perhaps from other members of the coalition, but the expectation is solely to apply the Higg Index. The idea is that awareness will drive progress, or at least, according to the SAC, this is the best place to start.

LOOKING FORWARDSome may argue that sustainable progress

shouldn't be left solely to an exclusive group of industry stakeholders, but rather that we should let the market decide. It's an interesting conflict, especially since the Higg Index may unveil some very powerful information about who is green and what shade.

For now, it's too early to gauge the actual impact of the Higg Index. However, if the index is successful, it is likely that there will be a de-mand for increased visibility. We are excited to see how the role of the coalition and its mem-bers evolves based on that impact over time. At the very least, we can be reassured that the SAC has taken a leap in the right direction.

Americans Spend More on Clothes Than Booze!The Apparel and Footwear Industry is large...so how large is its impact on the environment?

Apparel and Footwear$340 billion

Alcoholic Beverages$270 billion

New Cars$175 billion

Soft Drinks$130 billion

Fruits and Veggies$100 billion

Fast Food$75 billion

Video Games$20 billion

Bottled Water$10 billion

Executive Director Jason Kibbey

6 // JANUARY 2013 // OUTDOOR USA MAGAZINE

Editorial

m e d i a

USA

PublisherRaimondo Forlin // rai@odrmag.com

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EditorJoseph Gomez // josephg@odrmag.com

EditorPhi Le // phil@odrmag.com

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Contributing WritersMario Orlando, Benedetto Sironi

Art DirectorChad Eschman // chade@odrmag.com

Graphic DesignerHunter Cowdery // hunterc@odrmag.com

Production ManagerYajun Wang // yajunw@odrmag.com

Advertising SalesMike Martin // mikem@odrmag.com

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The world didn't end before winter and Ullr—ski culture's proclaimed God of Snow—has been gen-erous, so far, after punishing the North American ski industry last season. With the snow gods currently at bay, it seems that a fresh year and fresh snow have introduced some interesting market dynamics in the snowsports category—we are seeing a clash of the Titans.

Companies like Black Diamond, K2 and Scott Sports have made several conquests this year expanding into territories typically unexplored by a single brand. For example, technical equip-ment manufacturer Black Diamond has not only expanded its hardgoods offering in acquiring POC (helmets, body armor, safety, etc.) and PIEPS (ava-lanche beacons, probes and more) but has also as-sumed the added risk of launching its fi rst apparel line, a bold move.

Similarly, K2 has boosted its arsenal with a new boot line (see article on page 37) and expanded collections for goggles, helmets and touring gear, while also recently snagging snow safety gear pro-vider, Backcountry Access (BCA). And everyone felt the thunder when Scott swallowed Garmont's ski boot line, allowing the company to offer a full spec-trum of snowsports equipment and apparel.

Backcountry specialty has certainly grown in popularity; exploration is “cool” just as the half-pipe was “cool” at the dawn of the action sports craze. It also seems that the arena for industry alignment has been taken off-piste, but the shift represents something greater.

What we are seeing is companies expanding their product offerings to fi ll entire categories—a one-brand solution to rule them all.

On one hand you have players like The North Face and Patagonia who have built strong legacies in spe-cializing almost entirely in technical apparel, a piece of the puzzle. On the other hand, you have other large brands crossing over and rounding out their catalogues with a full span of hardgoods and appar-el. If the consumer is likely to buy across one brand for an activity, as opposed to mixing and matching, what is the consequence and can this change the in-store landscape? After all, many brands incentiv-ize retailers to buy in multiple segments.

Additionally, how will brands like The North Face and Patagonia—who seem immune to fl uctuating sales trends—stay relevant as traditional equip-ment-focused businesses gain more prowess? Keep in mind, The North Face is in the midst of a 3-year plan to reach $3 billion in annual revenue

and Patagonia is reaching a transition period as its founders age. So, just for fun, wouldn't it be ironic if the stars aligned and Black Diamond one day ac-quired Patagonia?

Historically, the question is interesting consider-ing Black Diamond started under Patagonia's wing when the assets of bankrupt Chouinard Equipment were purchased in 1989. Prior, Patagonia Founder Yvon Chouinard had established a category-wide solution for outdoor gear, but the equipment portion surrendered to market forces only to be later re-vived by Black Diamond CEO Peter Metcalf. Legend has it apparel and hardgoods were partitioned, and two separate kingdoms surfaced.

The difference between kingdom and empire is relevance, just ask Google or Apple. The Economist recently described the tech industry as a Middle Earth full of single-branded platforms serving vast tech solutions. Are we seeing a similar shift in the outdoor industry?

What if Black Diamond Acquired Patagonia?

One Brand to Rule Them All

Outdoor USA Magazine welcomes letters from our readers. Have a comment or opinion? An idea for a story? We want to hear about it. Here’s how to reach us:

>>> editors@odrmag.com

>>> Outdoor USA Magazine 1444 Franklin St. Santa Clara, CA 95050

We Want Your Letters!

An illustration of the Norse God Ullr, proclaimed by skiers as the God of Snow, although most historians do not support this

16 // DECEMBER 2012 // OUTDOOR USA MAGAZINE

[focus shop]

BY JOSEPH GOMEZ

Personality and Perseverance are behind the Northwest retailers legacy and success

The Wildernest Adapts to New Trends

!""!""!""#$%&'"#$($)*$)+*""!""!""!

Address of Headquarters: 310 Winslow Way E. Bainbridge Island, WA 98110

Number of Stores: 1 Phone Number: 206-780-8527

Website: wildernestoutdoorstore.com Store Hours: Mon-Sun 10-7

Owner: Steve & Kerry Sutorius

Date of Establishment: April 2003

Number of Employees: 7

Average Store Parking Availability:

Sports Covered: Camping, backpacking, snowshoeing, mountaineering/climbing, lifestyle

Store Square Footage: 4,200 sq. ft.

Average Square Footage for Individual Departments: Apparel - 50%, Equipment - 30%, Accessories - 15%, Footwear - 15%

Leading Apparel Brands: The North Face, Arc'teryx, Patagonia, Ibex

Leading Footwear Brands: Olukai, Oboz, Asolo

Leading Gear/Equipment Brands: Osprey, Black Diamond, Cascade Designs, The North Face

Rentals: Snowshoes, Mountaineering, ARFC's, Tents

Traditionally a technical store, the Wildernest is including new trends in apparel

Bainbridge Island, Washington is just a short ferry ride away from the urban city-folk in Se-attle, but don't confuse them. Steve Sutorious and his wife Kerry, owners of the Wildernest Outdoor Store, have been providing a core outdoor solution for the active island commu-nity—just over 23,000 people—since 2006. Their store isn't a high-fashion, urban boutique you might fi nd in Seattle; although, both Kerry and Steve are seeing outdoor trends moving in that direction.

Bainbridge Island sits west of Seattle on the Puget Sound, a large bay with numerous channels that fl ow into glacial valleys. Aside from the numerous trails and beaches on the island itself, Bainbridge is a convenient stop heading west from the city toward Olympic National Park, which features over 900,000 acres of temperate rainforests, alpine terrain and pacifi c coastline.

“When people get off the Seattle Ferry, we are the fi rst stop,” says Steve. “If they are plan-ning a trip or need some gear, they come to us. Kerry and I have guided hundreds of trips in the Olympic backcountry. One of my staff has been a gear tester for years, and he's done all the major trails in the Olympic and even more in the Cascades. We aren't the ‘green vest’ kind of guys you see at the big chains.”

Although the store has always steered away from green vests, it hasn't always been the fi rst stop off the Seattle Ferry. The Wilder-nest's roots are actually in Port Townsend, WA, a small bay town of about 10,000 people just an hour drive north of Bainbridge Island. Years before owning the store, Steve and Kerry fi rst met at a wilderness therapy facility in Mon-tana, where Steve worked as a guide and Kerry as a therapist. In 2000, they relocated to

Port Townsend when an opportunity presented itself to work at a similar wilderness program in the area.

“We had gotten tired of eight months of winter. It was time for something new.”

And something new is exactly what they discovered. Nothing could have prepared them for the outdoor specialty roller coaster they would ride for the coming years. Today, Kerry says. “Coming from someone who had literally zero retail experience in the past and was in a really hardcore therapy profession for so long, running a store was a diffi cult transition. But seven years down the road, I love it; there is no other industry I would want to be a part of.”

IT ALL BEGAN IN PORT TOWNSENDThe Wildernest was originally a small con-

signment shop above a bar on the main street in Port Townsend. In 2002, a friend of Steve's had purchased the whole operation including the inventory for a whopping $4,000.

“The fi rst time I walked in the store I was like whoa this place is awesome, if you ever want to sell it let me know.”

Roughly a year after the store had been transformed from consignment to outdoor

specialty, Steve and his wife became legal partners in the business.

“For almost three years I helped run and buy for that store on top of my other job,” he says.

In 2006, the opportunity for ownership pre-sented itself, and the two offi cially took over the Wildernest Outdoor Store. The decision was essentially a 180-degree career change for Kerry and Steve. They had gone from working the sales fl oor part-time and han-dling a portion of buying and customer ser-vice to managing everything. Steve explains, “In the start it was ridiculous. I had a 40-hour a week job, and I'd do 20 hours at the store part-time. Then in 2006, when we took over, I fl ip-fl opped. I was doing 40 hours a week at the store and 20 as a guide. We defi nitely paid our dues.”

Despite the long hours, the hard work quickly paid off, and it appeared that the store would have a bright, prosperous future in Port Townshend. However, things aren't always as they appear.

In 2008, a mutual friend who had been a longtime Wildernest customer mentioned he was moving his bike shop on Bainbridge Island elsewhere and his store was up for grabs. Ker-ry and Steve quickly fell in love with the loca-tion and decided to take a chance on a second store. Little did they know the decision would come during what Steve refers to as, “the worst possible timing ever.” Literally a few months after the grand opening, the economy

tanked and a looming recession moved in. But what's interesting is the new Bainbridge store unexpectedly carried the Port Townsend store through the recession.

ISN'T THAT IRONICIf the Wildernest owners had not taken the

risk in opening a second store, they may not be in business today. Steve explains, “The irony is if we had known the economy was going to struggle as it did, we would have never opened another store, but it would have been a huge mistake. On day one, the Bainbridge store doubled our sales, which saved us during those fragile years."

With access to a larger population—roughly 25,000 people versus 10,000 in Port Townsend—and the fact that this population lives on an island, the Wildernest Bainbridge location was an unforeseen lifesaver. Unfor-tunately, the same could not be said for the original store. As the recession progressed and sales dropped in Port Townsend, Kerry and Steve decided to put the business up for sale, but there were no takers. After two years of hanging on, the owners decided to pull the plug in April of this year. They had shared ten years of living in the area and doing business there as well—both describe it as a bitter-sweet ending.

“It was extremely tough to put all that work into a space and realize, this just isn't cut-ting it. It took me probably two years to get to that point,” says Steve. “My wife who is a

The owners require all apparel pieces to be zipped/buttoned-up on wooden hangers

When building displays the team creates seasonal stories using a variety of decorOwners Steve and Kerry met at a youth wilderness program in Montana

OUTDOOR USA MAGAZINE // DECEMBER 2012 // 17

[focus shop]

The Buyer’s Perspective

little more pragmatic was just like let's move on. We defi nitely had different levels of attach-ment.”

Liquidating the Port Townsend store was actually for the better because the owners could then focus their attention on the fl ourish-ing Bainbridge store. Also, the liquidating pro-cess itself didn't turn out so bad. The two were able to transfer about $5,000 of merchandise to the new store and maintain margins of 20-30 percent during the liquidation sale.

PERSONALITY AND A KEGERATORToday, the Wildernest draws its strengths

from a simple message: “shop locally, ex-plore globally.” The store's target customer is essentially any active person looking to get outdoors, whether that's taking the dog on some trails or climbing Mt. Rainier. With 4,200 square ft. and a “family” of four full-time staff, most of whom have been with the store since it opened, the Wildernest has built something Steve and Kerry say you can't fi nd anywhere else.

The Pacifi c Northwest is home to a lot of big names in the outdoor industry, and specialty stores in the area are sometimes forced to compete with that infl uence. For example, a customer recently came into the store with a 30 percent off coupon from Outdoor Research wondering if the Wildernest would accept the discount. Steve told the customer, “If you re-ally want to keep your business dollars local, we'll just give you 20 percent off of any Out-door Research product, and you can keep the coupon.”

The store would rather make a customer happy and save that person money than fi ght over a coupon. In fact, Steve says it doesn't bother him that his vendors compete with him at times because “we believe we can offer something invaluable: personality.”

It's a similar approach with e-commerce. Where many stores feel threatened, the Wil-dernest doesn't exist for that type of consumer.

“We provide local knowledge; experience with the product; the opportunity to chat face-to-face with a team of qualifi ed staff. I have a kegerator in my offi ce so if it's 5pm, we're go-ing to pour a beer and talk about the outdoors. Try fi nding that online!” says Steve.

THE WILDERNEST SCHOOL FOR MERCHANDISING WIZARDRY

Personality isn't all the store does well. Merchandising is also one of the magic in-gredients. In fact, Steve refers to his staff as “merchandising wizards.”

“One of the best examples is with how we

dress mannequins,” says Stephanie Deupree, who has been a sort of Wildernest jack-of-all-trades since the Bainbridge store opened. “We tell a story with practical combinations of different brands. So we will have mannequins with a wool base layer and another with a syn-thetic and then a fl eece mid-layer and a down jacket. We want to show people how layering systems can work together.”

Additionally, the store aims for perfection in presentation. Both Steve and Kerry mentioned some stores in the area that they defi ne as “virtually un-shoppable.” At the Wildernest, the displays are primarily crafted in-house and always with a story in mind. For example, the team recently decorated a wall to illustrate a winter-themed hike through the woods that co-incides with a wool apparel line. Additionally, all shelf items face the customer, and every piece of apparel on the fl oor is on a wooden hanger.

“Steve is crazy about wooden hangers,” says Stephanie.

Another way the store brings brand stories to life is to be more interactive. The Wilder-nest holds parties focused around a certain brand or product line. The staff provide food and drinks, build brand-specifi c displays and usually offer some kind of incentive for cus-tomers who attend. Recently the team held an Ibex party, where the brand's sales rep came in and chatted with customers.

Stephanie explains, “We do notice a spike in sales and more traffi c for the brand after a party. But the knowledge customers get from this kind of interaction is just as valuable. They

get to feel special because we pro-vide access to a representative of the brand who can answer ques-tions and tell the brand story from the source.”

Interactive marketing programs as such have proven to be very ef-fective for the store. By engaging the community directly in this way, the Wildernest expands its infl u-

ence. The store's blossoming yoga category is a good example. Today, yoga is a growing space in the store with “Prana accounting for over 80 percent of the pieces,” Stephanie tells us. But it wasn't always that way; the growth was a result of a grassroots marketing effort that directly engaged a targeted audience.

“We grew the category by reaching out to

local studios and teachers,” says Stephanie. We provided them with discounts and incen-tives to purchase our yoga brands and asked them to spread the voice. From there, things developed quickly.”

In other words, the Wildernest store was able to build both a strong yoga collection and constituency by infl uencing the “infl uencers” in the community.

A HIGH-FASHION FUTURE? MAYBESteve and Kerry expressed that the biggest

challenge facing the Wildernest today is simply what to do next. With so many opportunities in the local community, the question is how does the store continue to stay relevant in the mind of the consumer. Fortunately, a recent sales trend is casting light on some potential ideas. According to the two owners, the com-bination of casual, urban styles with perfor-mance materials is really taking off. So much so, that they are contemplating opening a new, boutique-like store devoted to this emerging category.

Steve says, “I've seen a lot of dollars spent on these kind of products, especially in our women's department. Companies like Horny Toad and Prana are creating new opportunities

for us with things like dresses, yoga-wear and all sorts of lifestyle apparel.”

The opportunity is evidence that if Steve and Kerry have learned anything from the Wilder-nest legacy, it's the importance of adaptabil-ity. “Things change,” says Steve. “Who would have thought we would ever sell dresses? Five years ago I would have said no way. Now we have like ten different dresses in the store—crazy. But I still want to sell equipment so who knows what will happen.”

The same speculation could have been said about the Bainbridge location. What's impor-tant is the two owners have managed to adapt their store in the wake of a struggling market; they've adapted their inventory to encompass new trends; and they've done all this while maintaining a core outdoor focus.

No matter what the future holds for the Wil-dernest Outdoor Store, it is guaranteed that Kerry, Steve and the rest of the team will be having fun.

“I stopped losing sleep over the store years ago,” says Steve. We don't take ourselves too seriously, and our customers love that about us. Sometimes people just come in to hang out and chat. That's what it's all about.”

The Buyer’s Perspective

Kerry, where did you get your buying experience?Right here at the Wildernest. I'm still learning [laughs]. I

was a chemical dependency counselor for twelve years at a wilderness treatment center, where I met Steve. I've been a buyer for the store for about seven years now.

What categories do you focus on as a buyer?Well, Steve and I make such a good team because he excels

at things I don't and vice versa. Gear is Steve's territory; apparel and accessories are my thing. I've spent a lot of time in the backcountry so I have a basic understanding of gear, but I feel more in my element with apparel.

What is your buying strategy?Honestly, I think of our average customer as me. I literally buy items I would wear

or pieces I feel like other people should wear. I'm not afraid to take risks or think outside the box either. Sometimes it works and sometimes it doesn't.

Do you have examples of “out of the box” purchases?One of the things I took a risk on that I'm kind of over is Vibram Five Fingers. We

started carrying them toward the end of the all the buzz, like two years ago. The sales have really decreased in the last year. I feel the trend itself is kind of dying out. Other brands can better achieve the minimalist style without that design. We also felt we could use the real-estate in our store for something else.

Are there any brands you took a chance on that are performing well?Icebreaker. We sell a lot of Ibex wool-based apparel because we have a store-

in-store arrangement, but I really see a future for Icebreaker. It's more athletically cut, where Ibex tends to be more casual. To me they are two completely different animals. I don't think as a store we've fully chased that active lifestyle category.

Does your store attend any buying events?The WWSRA (Western Winter Sports Rep Association) regional shows are

awesome.

Are you getting ready for the Outdoor Retailer winter market?Currently, we don't plan to go. We've gotten to the point where OR is way too big

and unnecessarily expensive. We would go and spend so much time in chaos just running around. We like the intimacy of the regional shows, they cost less and we don't have to travel.

Finally, can you pick one sales rep that really stands out?I'm not kidding when I say, I love them all. But if I had to pick one, I would say Erin

Eugster with Prana. She's amazing. I love the people we work with.

Kerry Sutorius

Wool is one of the Wildernest's biggest categories, it has a store-in-store partnership with Ibex

The POS system is tucked away in the back to maintain the "no pressure" retail experience

“we believe we canoffer something invaluable:

personality”

The store makes sure to cross-merchandise footwear with apparel and accessories The "merchandising wizards" have been with the Bainbridge store since it opened

22 // NOVEMBER 2012 // OUTDOOR USA MAGAZINE

[article]

[test drive]

BY JOSEPH GOMEZ

The Patriot on unpaved terrain on a foggy day off the coast of Northern California

The car­like SUV is caught between a rock and a hard place but saves gallons per mile

2012 Jeep Patriot is “Trail Rated”

Designed primarily for urban driving and the occasional off-road excursion, the Jeep Patriot is a solid and affordable crossover option with light trail capabilities. In fact compared to most SUV's priced above $25,000, the Patriot is ar-guably the most affordable off-road option in its class. However, reviews are mixed.

The Patriot's main critique is somewhat of an existential crisis. In attempting to fi ll the needs of a standard suburban-style crossover while living up to the Jeep branded off-road heritage, many drivers contend that the small SUV doesn't perform either role suffi ciently—despite the decent gas mileage and “trail rated” badge.

Also, with the compact crossover segment being one of the most competitive territories in the market, the Patriot's biggest obstacle is likely the quality of its competition. Reviewers fi nd that in many areas the outdoor oriented vehicle is simply outclassed by slightly pricier alternatives like the Subaru Forester, Honda CRV and Chevy Equinox.

On the other hand, the Patriot has been praised for its handling, gas mileage, safety, trail performance and simple cabin features. After all, most Jeep lovers aren't after fancy bells and whistles, and many reviews claim that, for its price, the Patriot is a nice contribu-tion to the Jeep lineup.

To evaluate these claims, Outdoor USA took the 2012 Patriot on a 148 mile excursion through the Northern California hills across winding roads and steep dirt trails. We then ventured up the coast with a few stops at re-mote beaches to catch some waves, fi nally ending in downtown San Francisco where we navigated narrow streets, bumper to bumper traffi c and tight parking spaces.

THE TOTAL PACKAGEAlthough the Patriot is available in Sport,

Latitude and Limited models, we tested the au-tomatic 4DR, 4WD, “trail-rated” Latitude mod-el—the medium priced option of the three. The Jeep Patriot Latitude 4x4 has a base MSRP of $22,780 (includes dealer preparation).

However, without added packages the car loses a lot of its outdoor utility, especially in regards to safety. Added features include sup-plemental side airbags, hill descent control, a more capable 4x4 drivetrain, all terrain tires, tow hooks, roof crossbars, an automatic CVT transmission and bluetooth voice command just to name a few. Outfi tted with the total package, the price approaches $25,000 and comes with some enticing warranty cover-age. Given the competition, this is an attractive price point.

PERFORMANCEFor a Jeep, the Patriot has respectable fuel

economy and has been praised for this by many review sites. With the model we tested, drivers should expect around 20mpg in the city and 23mpg on the highway with an estimat-ed annual fuel cost of about $2,642. Our trip through the woods, up the coast and across

the city validated these numbers—we calcu-lated about 22 mpg on varying terrain while engaging 4WD occasionally when hitting the trail.

The basic model runs on a 2.0-liter four cyl-inder engine, while the “trail-rated” model is outfi tted with a 2.4 liter four cylinder engine, measured at 172 hp and 165 lb-ft of torque. The added power and the lower gear ratio from the upgraded 4x4 drivetrain package will get you from 0-60mph in about 8.5 seconds, which is signifi cantly better than the standard option, but still nothing to brag about.

Manual drivers will be pleased that a 5-speed transmission comes standard while the automatic CVT is an upgrade. The fi ne-tuned, signifi cantly quieter CVT is the biggest update for this year's model.

ON THE ROADWhere we found the Patriot to struggle, and

many reviewers would agree, is with highway performance. We cannot speak to the perfor-mance of the 5-speed, but we did experience a slight lagging or rubber band affect associated with the newly improved CVT. It is important to note that this was a very minor complaint that would certainly elude the average driver.

This year, the new CVT was redesigned to be quieter, smoother and more responsive. We would agree that cabin noise from the engine is minimal, the ride is smooth (for a Jeep) but the responsiveness when accelerat-ing could be improved, especially considering the performance of other Jeep models like the reviewer-praised Cherokee and the Wrangler with its new Pentastar V-6 engine. However, the smaller engine allows for better fuel econ-omy so it is a good compromise for city-goers who hit the trails on weekends.

TRAIL RATEDJeep would like consumers to think the

Patriot is the fuel-effi cient alternative to tradi-tional off-road models. Despite the “trail rated” badge, the small 4WD SUV is not a true off-road vehicle. However, it is capable in a trail set-ting. First, it is important to understand what is behind the “trail rating” badge. The trail rating

indicates that the vehicle has passed certain factory tests assessing traction, ground clear-ance, hill climb, water fording, etc. But the ac-tual trail performance is predominantly a result of the drivetrain options.

Drivers have two options: standard Freedom Drive I and the Freedom Drive II package. The latter has a lower fi nal drive gear ratio and in-cludes traction control software. With the auto-matic CVT, 4WD is engaged electronically with a small lever in the cockpit, a technology that is common in vehicles of this class. We tested the drivetrain on rocky trails and a few steep inclines, but nothing extreme. The car handled well, felt stable and was able to climb steadily (60-65 degree grade).

Based on our experience and professional reviews, the Patriot's off-road performance is considered on par with the competition, if not better. However, it is no contest to the Wrangler or Cherokee, which would leave the Patriot's smaller engine feeling out of breath. With this in mind, we don't see the Patriot as a good op-tion for deep snow, mud or rock crawling, but it could perform well on snow covered roads, mild to steep terrain and treks through the ru-ral countryside. Just in case you do get stuck, there is a tow hook!

PRACTICAL INTERIORAlthough there are some fancy upgrades

like leather interior and a touch screen media center, for instance, the best way to describe the Patriot's entrails is barebones, which out-door enthusiasts will likely appreciate. In our experience, the inside is practical, accessible and rugged.

The large, simple displays—typical of clas-sic Jeep design—make up the car's cock pit, and a hard plastic lining covers the side pan-els. We didn't spend much time playing with the technical gadgetry like bluetooth voice command, the satellite radio option, smart phone compatibility, and a whole list of other features embedded in the new media center. We were more concerned with how well the car covered the basics, and we were pleased given the car's price. Tall, wide rearview mir-rors with auto-dimming, a 12 volt auxiliary outlet, entrance/exit lighting and a removable/rechargeable LED fl ashlight built into the back lighting fi xture offer some unexpected utility and character.

CARRYING CAPACITYThe vehicle fi ts two comfortably in the front

with three somewhat scrunched in the back. Despite having considerably less volume than the RAV-4 and CR-V (about 10 cubic feet less), storage capacity isn't bad. The combination of headroom and square space proves useful for bulky items. Experienced packing profession-als and fans of Tetris will enjoy the trunk shape.

The 60/40-split rear seats fold down with ease making the Patriot fi ne for a two or three person trip to the beach with some gear. You could bring along a several hiking packs/ac-cessories, a cooler and longer items like surf-boards, but your SUP board or kayak would defi nitely have to be tied down to the roof.

It would be more than a squeeze, however, if you were trying to cram the whole family plus gear on a week long ski vacation. This is where the adjustable roof rack and trailer hitch options come in handy. We should mention as well that the car's shape and size make it easy to park in narrow, confi ning spaces typical of big cities.

CONCLUSIONDecent gas mileage, drivability, practical in-

terior and trail reliability make the 2012 Jeep Patriot a reasonable and affordable option for drivers seeking a small car-like SUV that will be taken off-road occasionally. In this regard, the Jeep stands out among its competition less in performance and more with its lower price tag. On the other hand, drivers looking for a suburban crossover with added luxury, cargo space and the reassurance of AWD or even 4WD will have their basic needs met with the Patriot, but may be better satisfi ed with a less outdoorsy vehicle.

In response to the Patriot paradox—wheth-er the compact 4WD vehicle is a crossover or off-road type, the answer is neither. It is a unique compromise within the Jeep tradition that won't break the bank.

Base MSRP: $22,780Total Package MSRP: $25,235Warranty: 5-year or 100,000 mile Powertrain limited Warranty / 3-year or 36,000-mile Basic Limited WarrantyEngine: 2.4 liter 4-cylinder *trail-rated modelTransmission: Automatic CVT or 5-speed manualDrivetrain: Freedom Drive II package—Electronically operated 4WD with low gear ratio and traction control softwareCargo Space: 23 cubic feet behind 60/40-split rear seating/ 53.5 cubic feet with both sections folded downOutdoor Features: “trail-rated” badge, roof rack, trailer hitch, tow hook, integrated LED fl ashlight, auto-dim mirrors, rugged interiorCompetition: Subaru Forester, Honda CRV, GMC Terrain, Chevy Equinox, Ford Escape

>>>> Specs at a Glance <<<

Factory tests of various parameters give the Patriot its "trail rated" badge