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Masters of Scale
$300m in year two. The controversy came free, with David Protein’s Peter Rahal
00:20:43
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- [00:01]
A
The very best founders I know are brilliant at building systems. They connect teams, they remove bottlenecks, and they eliminate single points of failure. And yet, when it comes to their own wealth, most are running a disconnected stack. A tax accountant here, an estate attorney there, a wealth manager who doesn't talk to either one of them. Creative planning was built to fix exactly that. One integrated team of tax professionals, estate planners, investment specialists, all coordinated by a dedicated wealth manager who sees your full financial picture and keeps every piece working together. Proactive, tax, efficiency, estate strategy, investments, all under one roof. Creative planning where wealth works together. Learn more@creativeplanning.com Masters of scale hey, folks, Jeff Berman here. Exciting news. Applications are now open for the Masters of Scale Summit. It's happening October 20th through October 22nd in San Francisco. And it is a really special event. Please join our curated community of founders, innovators, and leaders shaping the future. Expect ideas that challenge your assumptions and and connections that move your business and maybe even your life forward. It's an experience that can change literally everything. Apply now@mastersofscale.com apply 26. That's mastersofscale.com apply 26.
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B
Anything that's really innovative and new in our culture, in the world, gets misunderstood. Americans have realized that protein's the most important macronutrient. It's the most expensive, it's the hardest to get. It doesn't always taste good. So what do people want from a protein bar? Really? You want a protein delivery system?
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C
Are there any ways that, like controversy like this is good for a new brand?
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B
All things equal, you'd rather have people talking about you than not.
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C
That's Peter Rahal, founder and CEO of protein bar company David, one of the hottest new consumer products of the last two years. I first met Peter when he was running RX bars, which he sold to Kellogg for $600 million. I wanted to talk with him now, not only because of David's phenomenal success out of the gate, but because the company has thrived despite a series of controversies, from multiple lawsuits to an awkward connection to Jeffrey Epstein. Peter talks to me about how innovation can create obstacles, but also opportunity. We delve into food science, social media, marketing, and his rather contentious assertion that protein itself is masculine. There's a lot unconventional about Peter's approach, so let's get to it. I'm Bob Safian, and this is Rapid Response Foreign I'm Bob Safian. I'm here with Peter Rahal, CEO of David, the popular protein bar. Peter, welcome to the show.
- [03:19]
B
Great to Be here.
- [03:20]
C
David has had a tremendous run since launching in 2024. It's on track for more than $300 million in revenue in just your second full year. I will say that I didn't immediately associate the brand with you. You didn't call it Peter or Rahal. Why? David,
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B
our namesake is Michelangelo's masterpiece. This sculpture of David, the chisel is this, like, really crude tool. It's a nail. It's what Michelangelo's used. But when you apply discipline and intelligence to it and you can create a masterpiece and you can create something beautiful, the values of the brand and what we stand for is around discipline and education or intelligence and then beauty.
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C
With David, it's part of a new wave of bars with high protein, low fat. Few of them, though, pack the combination that David does. The package says 28 grams of protein, 150 calories, no sugar, which sounds impossible, and I guess it would be without the sort of special ingredient called epg. If I understand it right, EPG is a kind of fat that's hard for the human body to absorb.
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B
Yeah. So it's a hard fat. So it's a high mill point fat, and it's a modified triglyceride. Your body has an enzyme called lipase that breaks off the fatty acids from the glycerol backbone, and that's where all the energy gets released. And so if you prevent lipase from doing that, your body can't digest it. That's really a biohack. So your mouth views it as fat, but then your body isn't able to break it down. And because it's a 104, Melt Point is a hard fat, similar to beef tallow or palm oil. It goes through your body in a solid state.
- [05:25]
C
As I recall, there was a product back in the 1990s with some similar attributes, Olestra, but it wasn't well tolerated. People came away with cramps and whatnot. So is EPG like an olestra? Dissociative, ascendant?
- [05:39]
B
It's the same idea, but different. It's not the same mechanism. The fundamental problem with that technology was it was liquid at 95 degrees. So at body temperature it was liquid. So the tolerance is much lower. The 90s, there was like four of these attempts at this technology coming off of sort of successful innovation around sugar substitutes and high intensity sweeteners. The industry looked to sort of reduce calories, and fat is obviously the most dense on energy or calories. There's like a race to do this. Olestra was first and basically totally blew up the market. But because of the sort of debacle of Olestra, it just left there.
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C
Everybody just ran away from it.
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B
Everyone ran away from it. The one that was actually the best at innovation just got forgotten.
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C
Were you already planning to do another protein bar to do, David, before you knew about epg, or was EPG like, oh, this enables me to do something that means, oh, I'll go back into this business?
- [06:50]
B
No, no, it was more. I was designing a protein bar from first principles. So what do people want from a protein bar? They want the most protein, least amount of calories, and obviously great taste and texture and price and some other factors, but really, you want a protein delivery system. And then there's fat. Like, you need fat for mouthfeel for texture, but with fat, you really don't want any calories. And so in that search, realized this EPG was unequivocally the best fat to use. And so in that pursuit of, like, the best fat system, it was pretty, like, crystal clear that EPG was like the one you want in a protein bar.
- [07:35]
C
You wanted it enough that last year you. You bought the company that manufactures it, Epigee, that. That. That owns the patent. You were then sued by competitors for blocking their access to it for terminating contracts. That suit was dismissed. But were you sort of thinking from the beginning that you might want to use all the EPG yourself for?
- [07:55]
B
David, when we started to get traction, our demand was going to consume all the capacity that Apogee could make. And if you're on the epigee side, it's really hard to scale an ingredient company because you have this chicken or the egg problem. You want people to adopt your ingredient. There's not enough supply to service the demand. There's not enough demand to justify the creation of more supply. And so the Apogee team was like, they basically. They came to me like, we have a crazy idea. And I was like, let's. Let's hear it. Let's merge. And you guys take it over. Because, uh, you. You really kind of need to vertically integrate these. These businesses. So it wasn't just a straight acquisition. They, they. They're on the cap table today.
- [08:44]
C
I can imagine that when you then, like, get lawsuits from competitors saying, oh, you, you know, you did this to screw us. It's gotta be like, no, no, no, they came to me.
- [08:53]
B
Yeah, they came to me.
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C
And.
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B
And they would have been screwed even if the deal didn't happen, because there was no supply. And we had a supply agreement that gave us the right to all the Invent.
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C
You face some, some other controversy in, in the short, intense rise you've had. I mean, there was a class action lawsuit challenging your labeling, you know, which was also withdrawn. But it was kind of claiming that there was more fat and more calories than listed because of the way, you know, you calculate epg. And like.
- [09:26]
B
Well, it was actually. It wasn't that. It was actually. They just didn't know about epg. And I mean, I think the thing is, anything that's really innovative and new in our culture, in the world, gets misunderstood.
- [09:42]
C
So you think of these as sort of well meaning concerns as opposed to like a stunt by competitors to try to sort of slow you down.
- [09:50]
B
It's just like part of the territory of innovation.
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C
Are there any ways that, like, controversy, like this is good for a new brand? Like, the more, you know, more people know you, the better?
- [10:02]
B
Yeah, I think, like, over time, it's a net positive. It's bringing attention to something innovative. It's teaching people, it's educating. In a way, all things equal, you'd rather have people talking about you than not.
- [10:14]
C
I have one more bumpy moment I have to ask about. Your chief science officer and initial investor was the author and wellness guru, Dr. Peter Attia. He stepped down after sort of previous communications with Jeffrey Epstein surfaced in court documents. How did you and Peter connect and how did you personally react when you heard about this Epstein connection?
- [10:38]
B
Yeah, so I met Peter through a friend. Peter was America's doctor. He was the voice of nutrition and really influential. I wanted someone to guide us on the science. And so we agreed to have him as the chief science officer. And then I think it was like February. I wake up Saturday morning, check X Epstein files released, and Peter's in it. And then I was like, oh, like, of course he's. He's like probably the best private practicing doctor in America. I'm not surprised he, like, had patients in that world, whatever. And then I was like, oh, people are going after him. He's the doctor. Like, you can't be hanging out with Epstein. And then I was like, oh, this is bad. And then, you know, Peter came to the conclusion like, hey, listen, I need to take a step back from my responsibilities, focus on my family, most importantly, and focus on my practice as a company. We stand with the victims. And it's all obviously frustrating that the DOJ isn't doing anything for the victims of all this. And it's quite gross. So, yeah, we stand with the victims and, um, respect Peter. But yeah, we had to go separate ways.
- [11:55]
C
David's in 16,000, some retailers now. But you started selling via TikTok shop. I'm. I'm curious. It's tough to address challenges on social media platforms in general for a lot of brands, for a lot of people. How, how did you approach that kind of challenge, whether with the lawsuits or a TIA or other detractors? Like, is there a philosophy you have about the way you communicate on social media?
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B
Yeah, the population consumes different media and like, the generations consume different media. And that's the tricky part. And so boomers are watching tv, maybe on Facebook. Millennials are primarily on Instagram and Gen Z's on TikTok and Gen Alpha. So you have to address all those sort of information routes. I think the most important thing is speed and directness. If you don't have a platform and audience, you just get lost. So thankfully I have, like, a good reputation and if I post something on X, people, people will listen to it and it gets exposed. So that's really helpful. But on TikTok, which is interesting, a strategy is like, yes, we can say something, but if it's not entertaining, it doesn't get picked up.
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C
Sometimes detractors can be entertaining and that just sort of goes on its own and you kind of, you know, you gotta just let it go.
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B
Remember, like, in the 90s, people, like, tried good news, but it didn't work. Like, good news doesn't work. Rage works. Fear, like, bad news works. And so there's this weird incentive for content creators to just, like, make negative or bad news because that's what gets engagement. Like a positive review doesn't go viral.
- [13:41]
C
I just want to pause here to acknowledge the calm Peter is exhibiting when describing the range of controversies he's had to navigate with David. I'm sure he's not always so even keeled, but it's hard to imagine the David business gathering the momentum it has without steadiness and resilience. So what's Peter's plan for keeping the momentum going? We'll talk about that and more after the break. Stay with us. Hey, listeners. Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely. From Ford CEO to NASA's administrator to the lessons from the Devil Wears Prada, it takes about 10 seconds to find. Just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to See you there.
- [14:49]
D
Each story you hear on Planet Money starts with a what happens if we refund tariffs? Why are groceries so expensive? At npr, we stand for your right to be curious because the forces shaping our world can be hard to see. Follow NPR's Planet Money wherever you get your podcasts and start seeing how the economy really works.
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C
Humans will never be more intelligent than AI.
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B
There's going to be two types of companies. Those are great at AI and those that went out of business because they weren't.
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D
How do we build a future that is human centered? I'm Rana El Khalyubi, and on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur and investor, I know what it takes to build AI that works for everyone. Every week I sit down with the pioneers shaping our future and we, we take you behind the scenes of the AI that's transforming our lives. Find Pioneers of AI wherever you tune in.
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C
Before the break, Peter Rahal talked about the incredible success of protein bar David in the face of a series of obstacles. Now he talks about plans to keep the momentum going, plus why he believes protein is masculine, an assertion that makes me a bit uneasy. As you'll hear in real time. Let's jump back in. I saw that you just released another new product, this sort of high protein ice cream, which sold out very quickly. Is that the next market or are you really like. No, we're David's Bars. We have a little ice cream, but we're focused on the bars.
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B
Yeah, what we're seeing with ice cream is I think that would be equal to the bar business. Traditional ice cream is full cream and sugar. With our product, we're actually, it allows you to kind of eat it without the consequences of getting into a caloric surplus.
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C
And is EPG the secret ingredient or whatever, the special thing that allows that in ice cream in the similar way that it does with the bars?
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B
I would say the combination of it's basically like epg, which gives you the texture and then it's whey protein isolate, which is a version of milk, and then it's allulose, which is a rare sugar. So, so you can think of it as like a really a high tech ice cream. There's a version of sugar, there's a version of cream, and there's a version of milk. With bars, you see people like, they kind of complain about texture, they complain about nutrition. And so we're able to deliver a product with the, the protein of a meal and the calories of a snack. And then the ice cream situation is like, you know, it's like, I love ice cream, but it's 1400 calories a pint and like 40 grams of sugar. So to offer something that's a fourth of the calories with some protein, it's like a, it's a really valuable offering.
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C
Do you worry at all that protein is like the, the fashional macronutrient of the moment, but it, it might fade? I mean, consumers do tend to move around to the next thing. So how do you sort of future proof the business?
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B
If protein started to slow down in popularity, that would not be a bad thing for us because there's a supply issues on protein because you're growing so fast.
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C
Like it, it's just hard to keep up with it.
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B
I mean, it's more. Americans have realized that protein's the most important macronutrient, it's the most expensive, it's the hardest to get. It doesn't always taste good. What you're seeing over the past two years, and it's driven by GLP1s, it's driven by general education, is that, oh, protein's really valuable. The key kind of cornerstone to a really balanced diet. And the RDA recommendation of 50 grams is not for optimizing or thriving. It's just like to survive. We're betting the company that it's the most important macronutrient. The evidence is overwhelming that it is. Are too many people entering it and putting protein in places that don't exist, shouldn't exist? Probably. And are people gonna be exhausted by that? Probably. And are there a lot of companies that are doing it that probably won' be here in two years, probably in 10 years. Is protein going to be more popular than it is today? I, I think it's going to be equal to or greater than it is today. It's not like a diet Trend.
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C
You mentioned GLP1s. How does that fit into this? I mean, for some folks, it's an alternate way to address, you know, their intake.
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B
I think it's a enormous breakthrough that will change nutrition culture forever. Nutrition no longer becomes the main intervention. And so I don't think you're going to see these wild swing in popular diets that move back and forth. I think you're going to see just people take GLP1s and if you're taking a GLP1, the recommendation is ensure you get enough protein and fiber to offset the potential downsides of muscle atrophy, which, which is the main risk with it. I don't See that changing for the foreseeable future.
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C
And I was curious, the, the name David, did you worry at all about it appealing less to women?
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B
No. Men will not consume feminine things. They just don't. Women will consume masculine things if they're aesthetic or beautiful. And if anything, it's cool for women to consume masculine things if they're aesthetic, but the inverse does not happen. You would never have a pink protein bar. You'd be like, that's not for me. But if you were to have a protein bar that was masculine but yet had good design or aesthetic, you would consume that and also your wife would too.
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C
And when you look at who the customers are, for David, that has been borne out that it's balanced.
- [21:04]
B
No, it's actually 60, 40, female to male.
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C
So you, you picked the male name so that you could appeal to the man because you could have made it pink.
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B
It's not about appealing to men. It's about like you, it's about, it's about not turning off men, really. You know, we don't have gender and language in English like other languages. But if you were to give a gender to a protein bar, it would be a man.
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C
Because
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B
it's masculine.
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C
I mean, because protein isn't just masculine. Like, well, like women have protein, plenty of protein in, you know.
- [21:51]
B
Yeah, of course, but I'm not, it's not about, it's not about if something could be masculine and, and like masculine, feminine can live in both genders. It's just about the energy of it. It's, it's a, it's a strong, it's a. Has masculine traits. And so therefore if you're going to give it a gender, you're giving a man a masculine thing.
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C
So you're two years into this adventure. What's at stake for David right now?
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B
I mean, everything's important right now in our life cycle. What's at stake is just coming to market and getting the distribution and bringing on the right retail partners.
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C
Hmm. Well, thanks for sitting down to have the chat.
- [22:38]
B
Thanks, Bob.
- [22:41]
C
Peter left me uncharacteristically speechless at the end of our conversation. David's growth has been extraordinary, especially in the face of lawsuits and controversy. And so maybe his analysis of consumers is spot on. Something about his framing of a molecule like protein as masculine, though, strikes me as reductive and inappropriate, echoing the problematic realms of the so called manosphere. But hey, Peter says the controversy is a net positive, so maybe he's unconcerned about it. And I suppose he could be deliberately stirring the pot. We'll see what TikTok has to say about it all. I'm Bob Safian. Thanks for listening.
- [23:27]
E
It's not just that companies become too big to fail and we bail them out.
- [23:30]
B
Although that's happening.
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E
It's not just they become too big to jail, but they become too big to care. These companies, they eliminated the competition. They and their advisors. You know, the economists who said monopolies are good and efficient, they're today just absolved of all responsibility. Shopping really hard doesn't solve monopolies. We warned them at the time. They did it anyway. The policy environment is what created this.
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C
To hear why the Internet keeps getting worse, check out episode 1280 of the Jordan Harbinger Show. Rapid Response is a Wait. What? Original I'm Bob Safian. Our executive producer is Eve Trow, our senior producer is Alex Morris, and our associate producer is Masha Makutonina. Mixing and mastering by Aaron Bastinelli and Brian Pugh. Our theme music is by Ryan Holiday. Our head of podcasts is Lital Molad. For more, visit rapidresponseshow.com.
- [24:35]
E
The Wired newsroom is known for award winning reporting on how technology shapes our world. On WIRED's Uncanny Valley, we take that curiosity even further. Each week, journalists from Wired break down the biggest stories in tech while speaking directly with the people building, challenging and reshaping the future. Is the AI boom sustainable? How do you protect your privacy in an age of constant surveillance? Uncanny Valley tackles the questions driving today's tech debates and lighting up your group chats. Listen to new episodes every Thursday. Wherever you get your podcasts.