Transcript

$300m in year two. The controversy came free, with David Protein’s Peter Rahal

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1:39 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. Are there any ways that like controversy like this Is good for a new brand? All things equal, you'd rather have people talking about you than not.

2:09 That's Peter Rayhal, 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 Пітер'з апроч, so

2:56 Let's get to it. I'm Bob Safian, and this is rapid response I'm Bob Safian. I'm here with Peter Rayhal, CEO of David, the popular protein bar. Uh, Peter, welcome to the show.

3:13 Great to be here. David has had a tremendous run since launching in twenty twenty four. It's on track for more than three hundred million dollars 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 Ray Hall. Why why David? Um Our namesake

3:36 is uh Michelangelo's masterpiece. This sculpture of David, the chisel is this like really crude tool. It's all it's a nail. It's what Michelangelo's used. Um But when you apply discipline

3:51 And intelligence to it. And you can create a masterpiece and you can create something beautiful. The values of the brand and and what we stand for is around discipline, education, or intelligence. And then beauty. with David it's part of a a new wave of bars with

4:09 High protein, low fat. Um few of them though pack the combination that that David does the package says twenty eight 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.

4:34 Yeah, so it's a a a hard fat, so it's a high mill point fat. Um Um and it's a modified triglyceride. Your body has an enzyme called lipase that Yeah. breaks off the fatty acids from the cholesterol backbone.

4:49 And That's where all the energy gets released. And so If you s prevent Light pace. From doing that.

4:59 Your body can't digest it. It's a really a like a bio hack. Um so your mouth reviews it as fat. But then your body isn't able to break it down. And and because it's a one oh four Melpoint's a hard fat similar to like

5:14 Beef tallow or palm oil. It goes through your body uh in a solid state. As I recall, there was a product back in the nineteen nineties with some similar attributes, Alestra, but it it wasn't well tolerated. It gave people came away with cramps and and whatnot. So is EPG like an Alestra descendant? It's the same like idea, but different it's not the same mech mechanism. The fundamental problem with Uh that technology was It was um

5:44 liquid at ninety five degrees. So Uh And at body temperature it was liquid. So the tolerance is much lower. In the nineties there was like four of these attempts at this t technology Uh coming off of sort of success successful

6:00 Innovation around sugar substitutes and and high intensity sweeteners. Um the industry mo look to s sort of reduce calories and fat is obviously the most Um dense on energy and our calories. There's like a race to do this. Umestra is first and and basically

6:17 Totally blew up the market. But because of the Sort of. debacle of Lustra. Everybody just ran away from it. Everyone ran away from it. The one that's actually the best at innovation.

6:30 Just got forgotten. 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. No um no. It was more

6:47 I was designing a protein bar f like 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. Really you want a protein delivery system. And then there's fat. Like you need fat.

7:05 Um For mouthfeel, for texture. But with fat, you really don't want any calories. And so In that search. Uh

7:15 Realized this E P G was unequivocally the best. fat to use. And so in that pursuit of like the best fat system. Um it was pretty like crystal clear that EPG was like the one you want in a protein bar. you wanted it enough that l last year you you bought the company that manufactures it epige 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

7:44 It d were you sort of thinking from the beginning that you might want e Use all the EPG yourself for David? When we started to get traction Our demand was gonna consume all the capacity. um that you can make

7:58 And if you you're on the epige 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

8:15 The creation of more supply. Um and so The epig team was like they basically came to me like we have a crazy idea. And I was like, let's let's let's hear it. Let's merge or and you guys take it over because

8:30 Um, you you really kinda need to vertically integrate these these businesses. So it wasn't just a straight acquisition. They're on the cap table today. 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. Yeah, they came to me and and they would have been screwed even if the deal didn't happen. 'Cause there's no supply and we had a supply agreement.

8:55 That w gave us the right to all the inventory that was available. 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

9:11 claiming that there was more fat and more calories than listed because of the way e you know you calculate E P G and And like it wasn't that it was actually they just didn't know about EPG. Um And

9:27 I mean and I think the thing is like Anything that's really innovative and new In our culture, in the world. Gets misunderstood. 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.

9:45 It's just like part of the territory of Innovation. Are there any ways that like controversy like this Is good for a new brand. Like The more you know, the more people know you, the better.

9:57 Yeah, I think like over time it's a net positive. It's um It's bringing attention to something innovative. It's uh teaching people, it's educating in a way. All things equal, you'd rather have people talking about you than not. 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 Atia. He stepped down after sort of previous communications with Jeffrey Epstein surfaced in court documents. How did you and Peter connect and and how did you personally react when you heard about this Epstein connection? Yeah. So I I met Peter through a friend. Yeah, P Peter was like America's doctor. Like he was the voice of nutrition and really influential. I wanted someone to guide us on

10:41 The science and so We agreed to have him a as a chief science officer and then I think it was like February. Yeah, I wake up Saturday morning Check X.

10:52 I've seen files released and Peter's in it. And then I was like oh like course he's Probably the best private practicing doctor in America. I'm I'm not surprised he like had patients in that world, whatever. And then everybody's like, Oh shit.

11:08 People are going after him. He's a 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 a Take a step back from my responsibilities.

11:21 Focus on my family, most importantly. Um And and focus on my practice. As a company we stand with the victims and And It's all obviously frustrating.

11:33 That The DOJ. Um Isn't doing anything. Um for the victims of all this and like

11:40 It's quite gross. So Um yeah, we we stand with the victims and Um respect Peter, but yeah, we had to go separate ways. David's in sixteen thousand 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.

12:05 How how did you approach that kind of challenge, whether with the lawsuits or a T or other detractors, like is there a philosophy you have about the way you communicate on social? 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.

12:26 Maybe on Facebook. Millennials are primarily on Instagram. And Gen Z on TikTok. And Gen Alpha. So you have to address all those sort of information routes.

12:39 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 f listen to it and it gets exposed. So that's really helpful. Um

12:57 But on TikTok, which is interesting in strategies like Yes, we can say something. But if it's not entertaining It doesn't get picked up. Sometimes detractors can be entertaining and that just sort of goes on its own and you kinda

13:12 You gotta Just let it go? You remember like in the nineties people like tried good news. But it didn't work. Like good news doesn't work. Rage works.

13:21 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.

13:35 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. The Wired Newsroom is known for award winning reporting on how technology shapes our world.

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15:15 Humans will never be more intelligent than AI. Those were great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana El Calyubi. 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.

15:43 Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. Before the break, Peter Ray Hal 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.

16:12 An assertion that makes me a bit uneasy, as you'll hear in real time. Let's jump back in. I saw that that you just released another new product is sort of hype. protein ice cream, which sold out very quickly. Is that the next market? Or are you really like, no

16:32 We're David Spars. We have a little ice cream, but we're focused on the bars. Yeah, what we're seeing with ice cream is I I think that would be Equal to the bar business, traditional ice cream is full. cream and and sugar with our product we're actually

16:49 It allows you to kinda eat it. Without the consequences of Getting into a Cloric surplus. And is is EPG the the the secret ingredient or whatever the special thing that allows that in ice cream in the similar way that it does with the bars? But the combination of it's it's basically like EPG.

17:06 Which which gives you the texture. And then It's way protein isolate. Uh Which is

17:13 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. Mm. With bars you see people like

17:26 They kind of complain about texture, they complain about nutrition. Um 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 Yeah. It's

17:41 fourteen hundred calories a pint. And like forty grams of sugar. So Um to offer something that's a fourth of the calories. With some protein, it's like a it's a really valuable offering.

17:52 Do you worry at all that protein is like the the fashion m 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.

18:07 If protein started to slow down in popularity, that would not be a bad thing for us because There's the supply issues on protein. Because you're growing so fast, like it it's just hard to keep up with it. I'm I'm I think 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 GLP ones, it's driven by general education. is that oh protein's really valuable. It's a key kind of cornerstone to a really balanced diet. And

18:37 The R D A recommendation of fifty grams is Not for optimizing or thriving, it's just like Just survive. We're betting the company that

18:46 It's the most important macronutrient. The evidence is overwhelming that it is. Are too many people entering it. In 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't be here in two years? Probably.

19:05 In ten years. Is protein gonna be more popular than it is today? I think it's gonna be Equal to or greater than it is today. It's not like a diet trend. You mentioned uh GLP ones. How does that fit into this? I mean

19:19 for for some folks, it's an alternate way to address, you know, their intake. I think it's a enormous breakthrough that will change nutrition culture forever. Nutrition no longer becomes The main

19:33 intervention. And so I don't think you're gonna see these Wild. Swing and Uh d popular diets that move back and forth.

19:44 I think you're gonna see Just people take GLP one's and and if you're taking a GLP one The recommendation is ensure you get enough protein and fiber. To offset the

19:58 potential downsides of um muscle atrophy, which which is the main risk with it. I don't see that changing for the foreseeable future. Mm. And I I I was curious, the the name David Did you worry at all about it appealing less to women? No. Men will not consume feminine things.

20:22 They just don't. Uh Women will consume masculine things. If they're Aesthetic or

20:32 Beautiful. And if anything. It's cool for women to consume masculine things if they're aesthetic. But the inverse does not happen. Mm.

20:46 You would never have like 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.

21:00 And when you look at who the customers are for David, that has been born out, that it's balanced. No, it's actually sixty forty female to male. So you you picked the male name so that you could appeal to the men.'Cause you could have made it pink. It's not about appealing to men. It's it's about Um

21:19 Like you y it's about it's about not turning off men. Really? You know, we don't have gender and language in English. Um

21:29 Like other languages, but If you were to give a gender to a protein bar. It would be a man. Because It's masculine.

21:44 Mm. I mean,'cause protein isn't just masculine. Like well like women have protein. Plenty of protein in you know. Yeah, of course. But I'm not it's not about It's not about if if something can be masculine and and And like masculine and feminine can live in both genders.

22:02 It's just about the energy of it. It's It's a It's a strong it's a has masculine traits. Um

22:11 And so therefore if you're gonna give it a gender, you give it a man. A masculine. Thing. Um So so you're you're

22:19 Two Two years into this adventure. What's at stake for for David right now? I mean everything's important. Um Right now in our in our life cycle. What's at stake is just coming to market and and

22:33 And getting the the distribution and bringing on the right retail partners. Mm. Well, uh thanks for sitting down to have the chat. Thanks, Bob.

22:43 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 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.

23:19 We'll see what TikTok has to say about it all. I'm Bob Saphion. Thanks for listening. Rapid response is a wait what original. I'm Bob Safian, our executive producer is Eve Tro.

23:39 Our senior producer is Alex Maris, and our associate producer is Masha Makutonina. Mixing and Mastering by Aaron Bastanelli and Brian Pugh. Our theme music is by Ryan Holiday. Our head of podcasts is Lital Malad. For more, visit rapidresponse show.com.