Even After A $600M Exit, Peter Rahal Isn't Satisfied. The Truth Is, He May Never Be.

0:10Hello friends, I'm Ray Latif and you're listening to the number one podcast for anyone building a business in food or beverage, Taste Radio. This episode features an interview with Peter Rahal, the co-founder of Protein Bar Platforms, RxBar, and David. How do you top a$600 million exit? If you're Peter Rahal, you aim for one that's four times bigger. Anything less, he says, would be a failure. Peter is one of the co-founders of RxBar, the platform brand of clean ingredient protein snacks that just four years after its debut was acquired by Kellogg for the aforementioned nine-figure sum. Earlier this year, Peter launched David, which is positioned as, a rigorously perfected protein bar.

1:00Each bar contains 28 grams of protein, 150 calories, and zero grams of sugar, and is described as containing the most protein per calorie of any brand in the bar category. The products are sold direct to consumer for$15 for a four-pack of each flavor, which include blueberry pie, chocolate chip cookie dough, double fudge brownie, and cake batter. In August, the company announced a$10 million seed funding round led by Peter, and also included Valor Siren Ventures, along with longevity expert and best-selling author, Peter Adia, and Stanford neuroscientist and podcast host, Andrew Huberman. In the following interview, which is framed as a series of true or false questions, Peter reflects on the business strategy and decisions that helped RxBars scale rapidly, including the impact of investing in high-quality package design and customer service.

1:55He also explains why entrepreneurs need to be obsessed and create accessible and affordable products, what he means when he says that happiness is irrelevant.

2:09Hey folks, it's Ray with Taste Radio. Right now, I'm supremely honored to be sitting down with Peter Rahal. Peter, great to see you. Great to see you, Ray. Thanks for having me. Yeah, thanks for joining me. Living in the great city of Chicago still? No, I'm actually living in the great city of New York. New York City. Okay, so why'd you make the move? I thought Chicago was where you were born and bred. Yeah, I moved to, once I was done with RX Bar, I moved to Miami to sort of reset. And then the location of where I was going to live next was based on where was the best place to build my next business.

2:45And I landed on New York. You know, Peter, the first time, and I think the last time I saw you, the first time I met you and the last time I saw you was at Nosh Live in New York City in 2018. and we were a few months removed from the sale of RX Bar to Kellogg. I found you to be, and I hope this doesn't come across the wrong way, I found you to be a bit more introverted than I expected. Maybe I was misreading it. I know you were just coming off stage at Nosh Live. I'm definitely very introverted. I don't really want to be famous or anything. So I never wanted the wine light. I wanted to build a great business, great brand, focus on the fundamentals and success as an outcome of that.

3:24so probably when you met me like like our number was public so I probably was a little shock with the amount of attention I was getting I'd never started entrepreneurship for it I you know wanted to be successful but yeah it was sort of like part of the territory I didn't really expect and yeah it just doesn't sound not motivated by it but it's like part of the territory and I actually don't think I'm good at being sort of the face or charismatic so I don't I don't really spend my time doing that, to be honest. People want to hear from the CEO, so it's part of the territory. But yeah, it's not part of my motivation, I guess, was the gist.

4:02Do you feel like you're kind of being forced into it now, given that there's so much hype and interest around David? A little bit, yeah. Yeah, I kind of have to. But yeah, it's just part of the territory. Before we hopped in the mics, I've done this once in the past, and it worked pretty well, framing a conversation using a series of true or false questions. And as I mentioned, all the success that you've had since 2013. So I think we kind of talked about this already, but I'll ask it anyway. True or false, you've become comfortable with success. true i think i'm blessed that i don't care what people think but then i deeply do at the same time so like i really want people to respect me but like in generally i don't care what people think which it's a bit of a paradox but as an entrepreneur it's really important because if you really are preoccupied with being viewed as successful or being viewed a certain way I think it influences your decisions and influences how you think and operate in a very unhealthy way And is it something learned or is it something experienced versus something that?

5:18You were expecting or versus not expecting I think I was born this way to be honest And then as you go through the journey You get more conditioned to it because you know, you're just going to get criticisms You're going to get everyone's gonna have an opinion. So you just can't have those bother you And you can't please everybody So I was born this way, but then certainly going through the journey as an entrepreneur, you have no choice, I think. Fair enough. RX Bar, quite a successful brand. I think a lot of folks might say, well, RX Bar was the right brand at the right place at the right time.

5:56That's why it worked. True or false? Is that the reason it worked? Partially. I would say false because in 2013, 14, and 15, there actually was a ton of competitors that were the same sort of product type, like an egg white based protein bar that was, you know, dates and egg whites, like same sort of concept. And none of them passed a million in sales. None of them really got beyond their little city. And I remember, you know, Jared and I, we always see these people like these copycats emerge. And so it was really a combination of like right timing, but also like a ton of good decisions, a ton of will, like it wasn't an accident, right?

6:37Like, and actually RXBAR should have been a smaller business if it wasn't for the team we had and the decisions we made. We were like one of the few brands across CrossFit into mainstream, where one of the few brands that really like transcended paleo into just a clean label movement. So I'd say like a partial true and false. Took a lot of hard work. You've talked about the value of hard work quite a bit. True or false, hard work means working all the time. Yeah, I think so. Yeah, true. Yeah. It has to consume you, right? So it's maybe not necessarily like execution, like always on email, but you have to be obsessed and work intellectually and emotionally thinking about it all the time.

7:23Like David, for example, it's like, oh, it's the only thing on my plan, really. So yes, true. Only thing on your plate, except your impending nuptials.

7:34We'll leave it at that. Related to working all the time, if you're working all the time, you can't really take a vacation. I had come across an article in which you had said, you still don't need a fucking vacation. True or false, vacations are not part of your purview. Yeah, they're not. The weekend is a vacation, really, when you think about it. So like, I don't have any motivation to go anywhere right now. And the thing is like a vacation, at least at this stage of where I'm at, like it actually causes more stress. Why is that? Well, cause I, I gotta be present. Like I'm going to be checking my email.

8:12I'm going to be stressed that I'm not in the office or not present. So it defeats the purpose. Like, I think there's a right time for vacation or, you know, really just making, making the weekends. Those are important. I mean, all of this depends on where you're at or like your business life cycle or your personal life cycle. So like RxBar was very intense and I was a very committed leader. So like it never made sense. And even after RxBar, like I tried to vacation, but it just doesn't do it. I don't know. It's about motivation, really. Like I just not motivated by like chilling by the pool or like, I don't know.

8:48I just like output. So, yeah, well, you know, it's like I think it's about family, too. Like I didn't I don't have a family. So I think now that I have a son, like, I think it's maybe a better time, but I don't know. Basically, like vacation is overrated. Fair enough. I mean, I think at a certain point, you've had enough vacation. I've been on vacation for, well, the last few years, I really haven't been on like a vacation where I'm just completely not working. But I guess like after four or five days, the question is like, why do you need more? Maybe that's just a thing that you and I feel and other people are listening to this and being like, those guys are just absolutely out of their minds.

9:28And honestly, it's like each individual is their own. I think there's a good rationale for time away and a sabbatical of some sort to each their own. I just know like I'm not like trying to escape. Yeah. There's a great social media series that follows small businesses, specifically small restaurants. And the interviewer is always talking to the owners about the history of the business and what makes them special or unique or differentiated. And I was really amazed by this one owner of a sandwich shop. I forget. I think it's in, I want to say it's in Cincinnati. And he had taken a vacation for the first time in nine years.

10:13So they did a virtual interview. Typically, he does the interviews on site at the restaurant, but he did a virtual interview. And he was even thinking about leaving his vacation and coming back just for this interview. And the guy was like, no, no, no, just please enjoy yourself. But one of the things he had said in the conversation that really struck me is that he had been taught and he lives this, that a leader always eats last. Would you agree with that? True or false? A leader always eats last. Yeah, I would agree with the idea. And it's basically like a servant leadership. I think it's the most effective leadership style.

10:49Did you say servant leadership? Yeah. I've never heard that term before. What does it mean? It's basically you eat last. Like your job is to serve the people and protect them. Like good leaders serve each other. They're protective. They break down barriers. It's really like bottoms up, not top down. They micromanage, meaning they get in the weeds. They help solve problems. Then they get out of the way. And they're very present, right? So they're here to help. So that's always been like my natural sort of leadership style. and yeah so that philosophy is just leaders eat last like good leaders eat last yeah so i would agree just to follow up on that you said you micromanage or you had when you were with rx bar is that still something you do and will do with david yeah i think it's like like micromanagement has a sort of um negative sort of association but too much micromanagement is a problem like it is important for any leader to get into the details if it's called for so if there's a problem you need to like go in dive in and actually understand the details what's important is getting out like once it's done is not just staying there it's like you got a good leader's got to flex between micromanagement and macro management right you can't stay too much at the macro and you can't stay too much of the micro you got to like really understand when to go back and forth between those two things when is the problem too small though i mean how do you know you know based on how impactful it is i think in general there's like a hundred ways to do something so so you have to have a good sense of how important it actually is so anything with product with people with brand service customers like if there's a serious problem like that that's worthy of micromanagement But yeah, I think as leaders, you got to use good judgment.

12:45And it doesn't mean you're like a bully coming in and sort of pushing, but it's just making sure that the right things get the appropriate attention. One of the most right things you ever did was to rebrand and repackage RX Bar. I recall in, it was the Winter Fancy Food Show in San Francisco, I think it was 2014, January of 2014. And I'd seen the old packaging for Arxbar and I saw the new one and I was just like, this is incredible. This is the best packaging I've ever seen in my life. It's just, it just stands out. It's very clear. It communicates so many things with a limited amount of information.

13:26So true or false, great packaging is the best form of marketing. True. Because in our business, the packaging is like, it's the presentation and the communication of your offering. And you always want your packaging to do all the work for you. So yeah, it's the pinnacle in good marketing, I would say. RX Bar and David, however, have very, very different packaging. One is very clear about the ingredients. The other is very clear about the most important ingredients, or at least the most important attributes of the bar. David calls out 28 grams of protein, 150 calories, and zero grams of sugar? Yeah.

14:11So nutrition is generally pretty complicated. I think that we're all individual humans. We all have different needs. We all have different stomachs, different goals, different beliefs. And so what happens in the sort of abstract definition, like what is healthy, what is good for me? You get these sort of hacks that people will develop or that would get popular. And one hack is just like kaleo, for example. So the hack is basically, if my ancestors didn't eat it, it's not good for me. And that's just a shortcut to really define what is good. And then I think there's certainly some truth to it, but obviously it's more complicated than that.

14:55And so you see this with like seed oils too, like seed oils are bad. And it's just this binary thing. And it's like, it's probably a good hack because consuming too much oil in general, like the energy density, it causes for overconsumption of calories, which is a problem, right? So you get these hacks that help you, like paleo helps you eat whole real foods that is generally good, eat a balanced diet. And then C-dose helps you not overconsume calories. It's generally good. They're good hacks, but I think my point is like to just blanket ingredients or blanket certain things, is it good or bad based on those hacks?

15:36Is it not a sophisticated approach, really? You know, and I think with Building David, we don't want to be, we don't want to succumb to those sort of hacks that ultimately move with, that have become like, basically they're trendy, right? Like they come and go. And that's a very vulnerable position for our brand to be around. And I saw that in our hacks bar, it was like our early adopters were moving to keto and they had totally abandoned us. And it's like, we just spent all this time building this position and now the world's changed and we can't change. So with that lesson, I was like, all right, well, we have to base things that have real durability that are based on evidence that we know are true.

16:20And that's why it's like the macronutrients, right? Like those are really, really important. Like we know calories matter. We know protein matters. We know sugar needs to be under control or spiking your blood. blood sugar is not a positive thing generally so because they know as i call myself an early adopter of nutrition i was always very confused as i was following my journey was like all right you know like two years ago it was like eat fish now fish causes mercury like don't eat fish and it's like eat six small meals a day now starve yourself dairy good dairy bad and it's like there's no source of truth.

16:58And so I just found it so difficult as a consumer to like understand. And, you know, you think about all the brands in our space, like there's these windows of opportunity of real demand and they build brands around those things and they get great growth. Then those things move. And it's just from a business perspective, it's just not a prudent thing to do. What you're saying makes a ton of sense, you know, that trying to build a brand around a trend, a fad or diet typically never works and may work for a limited amount of time. And then you got to figure something else out. But one of the most genius aspects of RxBar to me was that you were able to acquire someone's trust relatively easily because you were very clear about the ingredients on the front of pack.

17:49Again, it's a little different with David in that, And if someone wants to know the ingredients, they got to turn the package around, lift up the flap and, you know, find out what's one thing, what's the other thing. Maybe you'll have to Google a couple of things just to know what you're eating. And it makes me wonder, how are you going to acquire a consumer's trust when they don't necessarily know some of the ingredients, especially because people are looking at that nutrition facts label a lot more closely than they had in the past. So true or false, to acquire a consumer, you must first acquire their trust.

18:23True. Yeah, for sure. So it's like in the protein bar space or like, I just say, what is healthy? There's sort of like a continuum. There's the left and there's the right. The left basically says your ingredients matter more than anything. And then the right space is basically like, no, nutritional facts are more important than your ingredients. so those are like the two philosophies when you think about a processed food like a highly processed food like any snack bar a better position is one where your nutritional facts are everything because it's sort of an oxymoron to have a processed food with clean like the paleo position right it's like paleo people are eating egg boiled eggs and nuts right like that's what they should be eating but to answer your question yeah trust is everything that's I think for not just consumers, but for every stakeholder in the business.

19:18Yeah. And I think how you treat consumers tells a lot about how they're able to trust you. So that communication is a really important aspect of building that trust. And customer service, however, is and can be quite expensive. It can be quite time consuming. but true or false, the investment in customer service will always pay off. True. Unequivocally. I like business fundamentals. And I think one of our strategies and my personal strategy is like a satisfied customer is the best business strategy. I'm going to write that down. It's so good because it's true. It's like, if you just turns out, if you just make customers happy, even ones that are upset with you it all works out and a lot of entrepreneurs make a huge mistake of just looking at customer service and call it consumer service as like an expensive burden or line item that's inefficient i think they're making a grave mistake and it might seem daunting but you want to scale the unscalable as some say and you can tell a lot of consumer brands have shitty customer service because when we respond, they're sort of shocked.

20:33It's actually an uncompetitive market when you think about like in America, people's customer service experience with other brands. I don't think it's that good. It's offshored or no management, bad bots trained on bad SOPs. So back to the fundamental thing. It's like you want to set as a customer is the best business strategy. And then we are in the consumer goods business. So like two things you better do right is like serve the consumer and make great goods for them. Yeah. And make them accessible. I think there's something to be said about David as a great product for people who may not have access to nutrition or better nutrition and convenient nutrition.

21:20It's hard though. It's hard to make good food accessible and affordable, unfortunately, for a lot of different reasons. But true or false, your goal should always be to make accessible, affordable food. True. I think the market's too competitive anyway. You have to. How do you mean? There's just too many options for people. So if you don't make it accessible, you're going to lose. And if you don't make it affordable, someone else is going to take your place. So I think that nature of the market will actually force you to do that. So true. But what happens when your ingredients are expensive? I would think that what I'm seeing in David is not inexpensive.

22:01It's very expensive. But we still, we're going to try to get it everywhere and have as competitive pricing as we can afford. And it's like actually the way consumers look at price and the protein bar category and protein in general, even with meals, is really a calculator on how much protein I'm getting. So like protein by dollar is a sort of subconscious, like that communicates value. So from that perspective, we're probably the most competitive option, most affordable option, actually. Based on this price per gram of protein. Yeah, for sure. Quick break. If this episode has you thinking about what's next in food and beverage, explore BevNet and Nosh Insider, our subscription platform with deeper insights from the BevNet team.

22:46Visit tasteradio.com slash insider to learn more. You know, I think about your journey, Peter, and, you know, as I'm doing my research and doing some background work, I keep thinking of a name, and that name is Mike Rapoli. I'm pretty sure you're familiar with Mike. Mike Rapoli is the co-founder of Vitamin Water, the co-founder of Body Armor. He's a pretty well-known figure in the beverage industry, one of the most successful beverage entrepreneurs of all time. And I sat down with him a while back and I think I asked him when he was getting into body armor, you know, why are you doing this again?

23:22Because you had already made quite a bit of money with vitamin water. You're quite successful. You're bought and sold Pirate's Booty. You got horses. You know, you're set. Don't worry about this. Like, why are you getting back to this crazy business? I think what he tried to articulate and what he did articulate is that the excitement, the goal of being the best at something was driving him. And he was obsessed with this idea of knocking Gatorade off its perch with body armor, creating a sports drink brand that wouldn't settle for bronze, as he said, that was going for gold, nothing less. And I see a lot of the same Rapolian kind of attributes of David in that you have said, you know, our goal is to become the number one protein bar in America.

24:09That's a very lofty and ambitious goal and one that might make you pull every strand of hair out of your head. But true or false? I mean, you've got to have number one as your target if you want to be successful. True. Yeah, for sure. it's competitive. You got to want to win. So yeah, true. Of late, I've heard a lot of investors talk about the idea of building a 20, 30, $50 million brand and it being something that is achievable and something that should be targeted versus trying to be the category leader or be distributed in all 50 states. I mean, you know, why is it so important to be the best?

24:55if david isn't four times the size of rx bar it's a failure my view it's about winning it's about moving things forward making customers happy bringing innovation to market like winning is fun you know why else would you do it you don't do things for second place winning is fun and i love winning i love the competition and a lot of people might say well entrepreneurship isn't about the end result it's about the journey but you know the end result is what you're chasing right but does it make you happy? Winning? Yeah, winning makes me happy, for sure. Okay. I'll ask this question. Again, I think I might know the answer, but true or false, entrepreneurship is about finding happiness?

25:38No. Just false. Okay. False, yeah. Happiness is irrelevant. Happiness is irrelevant. Okay. You're the second person I've spoken with this year who has said something similar to that, or at least, you know, has the same kind of mindset when it comes to happiness. It was Jay Shetty, who is the well-known self-help expert and the co-founder of a sparkling tea brand name called Juni, J-U-N-I. And he said, happiness is overrated. Now you can listen to the interview to hear him expound on that, but it sounds like you're of a similar mindset. Yeah. It's irrelevant for entrepreneurship. I don't really care about it.

26:18But don't you want to be happy when you're doing what you're doing? I would, I would say it should be fun. I think you should have a sense of humor at work. Like it should be fun, but the, through the journey, I think happiness is relevant, like serving and winning and achieving goals. I guess, yeah, that outcome could make you happy, but it could also make you, I don't know. I just don't think of it as an emotion that I, I apply to entrepreneurship. You know, it's actually quite the opposite. Like your expectation should be it's like misery. Oh, dear. Well, it's like a better expectation because it's hard.

26:53There's failure. There's stress. There's rejection. There's tough conversations. It's emotional. There's trade-offs, like intellectually stressful or demanding. So if you want to be happy, like there's other things you can do to make you happy. Yeah. Okay. That's fair. That's fair. Four times. You want David to be four times the size of RxBar. Otherwise, it's going to be a failure. There is a business strategy. There is a plan, I'm sure. But how far out do you have to think about getting to that end goal? Like the market's pretty defined, right? So I think some of the work we're doing at David is that I'm excited to and we're looking to do is to expand the actual addressable market.

27:37So I mean, I look out six years, seven years at a time. and I think we're really focused on growing the market too, not just sort of taking share. And so we're trying to bring, because you'll talk to customers and they'll be like, oh, I'm not a protein bar person or you'll hear that quite a bit. And we heard this at RX Bar too, but we're hearing that a lot. And they're like, we're not a protein bar consumer, but I love this product. I love David. And that's to me is the ultimate sign of that you're creating value and doing something right. So we're really focused on like consumer surplus and expanding the market, like brewing the category.

28:13It certainly seems like you are when you are comparing on your website, David, to other protein bars. You're also comparing David to boiled cod, which is kind of eye-opening to see. I assume that means you're trying to convert folks who would look at boiled cod as a good source of protein and saying, hey, you know, instead of eating this bland fish, you can have our tasty blueberry pie protein bar. If you look at the competition just as the category or your peers in the category, I think it's a bit too narrow sometimes because you have to look at how are consumers shopping? How are they thinking?

28:51What are they eating? There's a world where we're actually competing with a banana. We're competing with RTD shakes, protein shakes. We look at it pretty broadly. So Americans in the future are going to be demanding and getting more protein than they are today. And so I'm just in a good position to help people achieve that. Peter, I am so happy that we've had this opportunity. Thank you so much for taking time. I just have one more true or false question. Again, RxBar, just a remarkable success. Four years,$600 million exit. But there's more to be done, clearly, with David. A term or a sentence I've seen associated with the brand is, finish your masterpiece.