David Versus: “I think RxBar had a great story and a great team,” Peter Rahal said of his first act. “But this time I’m going to avoid some mistakes.”
Alexander Karnyukhin writes for Forbes
Peter Rahal’s new David bar was designed for the Ozempic generation. Portrait of a hungry entrepreneur.
by Simone Melvin forbes staff
SSitting at a table at Balthazar’s in downtown Manhattan, Peter Rahal shoves smoked salmon into his plate and ignores the sound of toasts nearby. The 38-year-old co-founder of nutrition bar brand RxBar is always thinking about protein, and not just for his own health. Rahal had dreamed of building a new bar since the day he and co-founder Jared Smith sold RxBar to Kellogg Co. for $600 million in 2017. Rahal launched David in September and made that dream a reality – or so he calls it. This is the last protein bar. ”
Rahal, who made $300 million (pre-tax) from a 50% share of the RxBar sale, led David’s $10 million seed round earlier this year with a $6 million investment. David’s, named after Michelangelo’s 16th century masterpiece, claims to be the most protein-rich bar in existence and has been partnered with renowned physician and health podcaster Peter Attia (who is also a minority investor). Supported by Andrew Huberman. With 28 grams of protein and just 150 calories, this compact snack is currently available in four flavors and is available exclusively direct-to-consumer for $3.25 each.
“I’ve been in the nutrition bar world for 20 years, from Atkins to keto to paleo to fasting to carnivore and all the other changes,” Rahal says, still ignoring the toasts. “But there are two things that consistently drive this category: muscle gain and fat loss. So the question is, how do you design a product that does those two things? did.”
Rahal took the opportunity to establish a new bar in October 2022, shortly after his five-year non-compete agreement with Kellogg ended. He spent a year developing David with co-founder Zach Ranen, 27, under the guidance of Attia, the company’s chief scientific officer. Rahal’s current David product contains milk protein isolate, collagen and whey protein, held together with allulose and polydextrose. It’s a big departure from RxBar, which promoted easy-to-pronounce ingredients like egg whites, dates, and almonds.
“I think RxBar had a great story and a great team, but I think we can avoid some mistakes this time,” Rahal says. “I didn’t know what I was doing then, and I don’t know what I’m doing now, but I certainly know what I’m doing.” do not have to do. ”
Rahal started RxBar in 2013 with his childhood friend Smith in his parents’ kitchen. At the time, they were both in their mid-20s. Born into a family of entrepreneurs in the food industry, Rahal was always conscious of the importance of quality ingredients and health. And, as an avid consumer of protein bars, he realized at the time that there were none on the market that were made solely from “clean” or whole foods.
They started the company with a personal investment of $10,000 and began selling directly to consumers at CrossFit gyms. The company turned a profit in its first year with total revenue of $2 million, which grew to $6.5 million by the following year.
Alexander Karnyukhin writes for Forbes
In 2015, RxBar underwent a rebrand that transformed the company. Rahal and Smith moved the product’s short ingredient list to the front of the package in large font, followed by the last ingredient: “No BS.” By the fourth year, the company was generating $161 million in revenue. Then Kellogg Company made an offer of $600 million.
The sale comes at the beginning of a wave of health bar acquisitions. Simply Good Foods acquired protein-based snack company Quest for $1 billion in 2019, and Mars acquired the maker of Kind bars in 2020 for $5 billion.
Rahal, who was among the young founders who sold their nutrition bar business to a large conglomerate, says his original plan was not to sell RxBar. However, he and Smith decided to enter into a deal to expand the company and secure financial freedom. Smith left within a few months of the sale, but Rahal remained with the company until May 2018. During that time, RxBar moved to a larger building in Chicago and more than doubled its workforce to 200 employees (although it later laid off 40 people).
After leaving the brand and moving to Miami in 2018, Rahal began planning his next venture. “Leaving RxBar was difficult because it was my life,” he admits. “When I left the company, the organization was gone.”
He began investing in other companies in the food space, starting with prebiotic soda brand Olipop, which he founded in 2018 and is now valued at $200 million. Rahal said he has since invested about $50 million in about 100 different businesses, including instant oatmeal brand Mash and healthy popcorn company Lesser Evil. Rahal says his investment strategy includes looking for novel products that stand out from the market, combined with founders who are “willing to die before the company fails.” He says he is.
His second act now resembles the early days of RxBar. David hit the ground running and moved to New York in 2023 to build his business. “We had to start from scratch with David,” says Rahal. “It was just me and my co-founder [Ranen] using a computer. ”
But there’s a reason other companies don’t develop products like David’s. One factor is cost. High-grade proteins such as collagen and binding products such as allulose are expensive. At $3.25 per David’s bar, it’s 16 to 35 percent more expensive than competing brands like Quest and Barbels, which sell similar products online for $2.79 and $2.40, respectively.
Additionally, developing products with unique nutritional profiles takes significant time, money, and resources. According to Maya French, a Forbes 30 Under 30 alumnus and co-founder of plant-based protein drink Coir, many new founders in the field aim to launch their brands as quickly as possible. That means taking ideas to outside developers who can speed up product manufacturing. .
“These founders often don’t have a lot of money to actually do the research or the right scientific partners to create what they want,” French says. “And like any scientific experiment, it takes years.”
“Protein isn’t just for bodybuilders; it’s essential for everyone, and the market can only help move that narrative forward,” Rahal says of David.
With access to capital and nutrition experts, Rahal is well placed. David’s sold more than 1 million bars in its first six weeks on the market, generating at least $3.3 million in sales, Rahal said. And he’s betting that high-protein diets aren’t a new fad.
The snack bar industry is growing — retail sales in the domestic market are now about $10 billion, up $2 billion from 2019, said Jim Salera, a Stevens analyst specializing in packaged foods. We estimate that protein is used in existing products—but that definition is becoming blurred as more companies start using protein. Mars, the world’s largest candy conglomerate, began adding protein to its Snickers bars in 2023, two years before General Mills developed protein bars in its popular cereal brands Cinnamon Toast Crunch and Golden Graham. Although Kind Bars never promoted itself as a protein-based snack, the company rode the wave before being acquired and released its first protein-advanced bar line in 2018.
It’s no coincidence that interest in protein is on the rise, with more than 15 million people in the U.S. taking Ozempic or Wigovy, according to a study by the San Francisco-based nonprofit health care foundation KFF. For those taking Ozempic for weight management, it is important to consume enough protein to maintain muscle while losing fat. Sarella says consumers using GLP-1 drugs have the greatest growth opportunity.
“If you are prescribed this medication in the future, your insurance may require you to see a dietitian or enroll in a nutrition plan,” he continued. “That would definitely include some type of protein supplement or these products that add protein to your diet.”
All of this bodes well for Rahal’s bet on a protein-powered future.
“Protein isn’t just for bodybuilders, it’s essential for everyone, and the market can only help move that narrative forward,” he says. “There’s a wave to surf, and weight loss drugs are a huge wave. So we’re not spending our energy educating anyone, the market is.”
Rahal is considering expanding into retail stores by mid-2025, but the company is still a startup and doesn’t have a clear outlook. For now, David’s company’s Instagram page is anchored by a video ad of a woman playing a violin in an empty auditorium, along with a shot of David’s shiny gold wrapping paper and a caption that reads, “Marble made by nature. , “David Made by Man,” are strung together between several lines of text. ”
“This is supposed to be art,” Rahal says, acknowledging the ad. “When you look at the meaning of David’s sculpture, it’s the idea of carving something perfect. And when you look at the brand, you want it to symbolize something and inspire you to like good art. I don’t think anyone epitomizes that more than David.”
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