Q&A with Peter Rahal
Glen Ellyn entrepreneur raises the bar on good-for-you treats — to $600 million
It’s not every day that a major Brand zeros in on a boot-strapped business to the tune of $600 million. But recently, that’s just what food giant Kellogg Company did, purchasing RXBAR, a homegrown concern developed by Glen Ellyn residents and childhood friends Peter Rahal and Jared Smith. Just four years ago, the young entrepreneurs were working full-time but spending their evenings and weekends making a new high-protein health bar in Rahal’s parents’ kitchen. Soon, the business started to gain traction, so they quit their jobs and hit the streets, selling RXBAR door to door at city gyms and health and fitness centers — one bar at a time.
Rahal, a graduate of Glenbard West High School and Wittenberg University in Ohio, spoke with West Suburban Living about the biggest challenges — and the sweet rewards — of cooking up a business from scratch. The winning recipe? Good ideas, hard work, healthy ambition, friendship — and no B.S. (Bad Stuff).
Let’s begin in Glen Ellyn. How was it to grow up there?
Beautiful Glen Ellyn. I was born and raised there, all in the same house. There are a ton of memories. I’d say some of my fondest were just running around the suburbs and being a curious kid. It’s such a great, safe community.
Where did you go to school?
I went to Glenbard West. I was a D student — terrible!
Were you proud of that?
Now I am, yes. I was interested in history . . . sociology and psychology. Humans. I was into social science.
Were you and Jared Smith friends in school?
Yes, we were very close. We had common interests — sports, video games, biking.
Where did you go to college?
Jared stayed in the area — he went to De Paul and majored in Finance. I went to Wittenberg University in Ohio and studied Economics and Political Science, with some courses in business and marketing.
Tell our readers how RXBAR got started.
A little bit more about my background. I grew up in the food business. Both sides of my family were in the juice business, developing juice products. Jared and I were both employed elsewhere — I was with a transportation broker and Jared was with a mutual funds company. I was miserable. We started talking about developing a nutrition bar. We were both into bars that save you time — we were both big bar consumers. We just decided we wanted to make a better product, a high-protein snack bar. We started very modestly, in the kitchen of my parents’ house in Glen Ellyn. We launched the product there — one bar at a time. Then we took over the basement and turned it into a business. We were making a thousand bars a weekend in two flavors, blueberry and coconut-chocolate.
Was it a big financial investment?
We did it by ourselves, with just friends and family. It was pretty easy. Fortunately, it wasn’t a big number we had to raise. But everyone was supportive — we couldn’t have done it without them.
How soon were you able to quit your jobs and work at it full time?
Right away. It’s a binary thing. You’re in or you’re out. You can’t half-ass it. There’s a lot of people who half-ass things. But you’re either doing it or you’re not.
How did you come up with the brand name RXBAR?
The product was born out of Cross Fit (the workout routine). In CrossFit, RX is shorthand for health and it’s shorthand for accomplishment, or high standards. We named the brand after that. We solved a problem for a clear customer — CrossFit and Paleo (a healthy diet program). Those were the early adopters and then later on health buffs, people who want a natural, better-for-you protein bar.
Did you know right away that the product was going to take off?
Yes, but we didn’t know it would be this great. This was the first thing we tried together. We knew we were onto something and we had traction right away. We made decisions and built a good team and stayed the course. And the next thing you know, we were in business. It was pretty linear. We had success very early on, so we were really confident. It was one win after another win after another win.
How did you get your first sales?
Door to door — downtown, in the city. Our first big client was River North CrossFit. We just walked in there and showed them what we had. It felt good, really good. And it was like, what’s next? Who’s next?
You make it sound easy. Was it?
Of course, there were problems — but there always are. Missed deadlines, people problems. Just day-to-day stuff. Jared and I were pretty disciplined and focused. We’re a values-based company, so we focused on our life values and made decisions according to them. It gave us a guiding light.
What values were important to you?
Integrity, humility, excellence. And being of a servant’s mind-set — based on serving the customer. We didn’t think about economic outcomes. Financial performance is an outcome we achieved, but that came out of our values.
Is that how you built your team, too?
We looked for people aligned with our values — humble, entrepreneurial, people with integrity, people who collaborate. We used every tool and weapon we had — the internet, references from friends. We used LinkedIn and direct messaging to
poach people. We built an awesome team.
When did you start expanding out of the Glen Ellyn basement?
August 2014. We started in 2012, and it flew by. Working is fun. It gives you purpose. It’s all we did. It’s all we do. We work six days a week — six days on, then sleep. The time commitment was hard in the beginning. When you don’t have the money to hire, you’ve just got to work through it. Now we have a great team of people. We have 101 employees; 85 percent of them in the Chicago area. At first we were in gyms, fitness studios. Now, it’s everywhere — Whole Foods, Jewel, Walmart, Target, Costco, 7-Eleven, Starbucks, coffee shops. Everywhere.
The packaging is fun and simple. How did that come about?
It was a collaborative effort. We hired a great design group — Scott & Victor in Chicago. We talked about what the product was like — an RXBAR is like eating three egg whites, six almonds, four cashews, two dates. And we wanted to take a risk (No B.S.). We wanted the package to reflect what the product was — committed, health conscious, a bar that works hard for you.
How did you make the decision to sell?
It wasn’t part of the plan, but it was the right step for the future to make sure that we had the resources and infrastructure we needed to maximize the potential of the brand. Kellogg is an amazing organization, totally aligned with how we work, our
values. And no one wanted to quit their job. We wanted to keep operating the business as a company, and that aligned with Kellogg’s strategy. We have a great team of people, so why would you want to change it? They’re a great company. We’re a great company. It was a good fit.
Who or what inspired you?
We were lucky and the timing was perfect. My dad was always a good inspiration. And Jared and I motivate each other, push each other.
How do your families feel about your success?
They can’t believe it. It started out in our kitchen. Four years ago it was a stupid idea, remember?
As a child, what did you want to be when you grew up?
I wanted to be a race car driver.
What are you interested in outside work?
I like to learn -- about culture, other countries and history.
What book are you reading right now?
It’s by Ray Dalio — Principles: Life and Work.
Someone you admire.
Three quick tips for budding entrepreneurs?
Solve a problem. Make an awesome product. Invest in people.
Best tip for a healthy lifestyle?
Sleep — get a good night’s sleep.
Favorite snack food?
Rice Krispies treats.
Where would you most like to travel?
To Lebanon. My family’s origins are there.
Favorite places to visit back home?
Sante Fe Restaurant in Glen Ellyn. And Newton Park.
Best reason to come back to the western suburbs?