Chicago-based RXBar sells to Kellogg for $600M | Hacker News Reader

Chicago-based RXBar sells to Kellogg for $600M

chicagotribune.com

66 pointsfern1253 comments

I tried a bunch of these because a. the packaging is great, and b. my office stocks them. I desperately wanted to like them, but they're really not that good. The ingredients are good but the macros are nothing special, and they are just so hard to eat. The consistency is terrible and it feels like the only health benefit you get is the workout you're giving your jaw, whilst trying to swallow it down.

My take on RxBars: "glue has never tasted this good." They are an OK snack, but - as you say - I feel like I need to brush my teeth immediately after I'm done eating one.

I was making my own energy bars with similar ingredients until these came along. Well worth the cost.

Hear, hear. The packaging enticed my GF, so she bought a couple to try. I wanted to like it because I liked premise of showing the ingredients right in the front. But boy oh boy was it hard to chew, and taste was nothing worthwhile.

RXBars have great packaging and marketing, but the bars are meh at best from my experience.

I really liked the chocolate sea salt ones. The rest are kinda meh.

Did you buy them off Amazon? I find that RXBars from Amazon have typically been sitting in a warehouse for many months at a time and are often stale.

Every bar I've bought in-person at a traditional grocery store has been significantly fresher and has a much nicer consistency.

6x revenue seems like a really high valuation, right? There's a physical product distributed via retail, we aren't talking tech margins. What's the value to Kellogg's?

My only guess is that Nutra Grain bars are being destroyed by Kind and their contemporaries. They need to compete in the category because they get some sort of incremental value when they own a number of different grocery departments. And their internal product development team just isn't very good.

Brand recognition + brand decoupling?

Brand recognition would allow them to push new products using the same brand (which people trust to be "no BS, healthy food"). Brand decoupling could disassociate their "healthy" line of products from the rest of the crud they produce (outside of their bran cereal, most of Kellogg's stuff is laden with sugar and chemicals.)

Also, AFAIK RxBar is sold just in the US.

6x revenue has been a standard multiple for other exits in the health foods space. Including things like Epic Protein Bars, which was bought by General Mills.

"Super-/Functional-/Trend Food" is a huge market to play in and Kellogg's needs more and better marketshare.

If you look at the IR-Site, you can see that Kellogg's is already in the process to renovate the Company and also many of their Products... and that "Trend Food" is an important theme for the Company.

http://investor.kelloggs.com/investor-presentations#past-pre...

Context in this quote:

> Cereal sales have declined for years, and Kellogg's snack-bar business also has performed badly—with its once-strong Special K brand losing its allure with consumers

Kellogg’s doesn’t know how to build a business anymore and needs to go out and buy fresh young businesses like RXBar.

This purchase doesn’t just give Kellogg’s a new product to sell, it’ll probably help teach an old dog new tricks.

Special K cornflakes contains more fat and sugar than plain cornflakes, as well as powdered iron, and is then marketed as more healthy. Pure propaganda. No wonder they are loosing allure.

Kellogg's is a brand that I try to absolutely avoid, ever since I became aware of their misleading marketing.

Never had an RXBar, but now that Kellogg's owns it, I probably never will. I can even see from the picture that the No B.S. is a lie: what is in that "chocolate chip": lots of fat and sugar to begin with. What more?

I haven't had them before but it looks like they do have very limited ingredients, still a lot of sugar, but it seems the sugar is all from dates which has a low glycemic index.

Ingredients: Dates, Egg Whites, Almonds, Cashews, Cacao, Sea Salt, Natural Chocolate Flavor

Nutrition: 210 Cals @ 9g Fat, 24g Carbs (6g Fiber, 15g Sugar, 3g Other), 12g Protein, 270mg Sodium, 330mg Potassium

They have simple ingredients and taste amazing --- I personally LOVE their chewiness.

However, they dates are rather sweet and add a lot of sugar. But RxBars are a way better option than cliff bars or any other monster energy bars out there that are basically corn syrup and whey.

I don't think that Clif bars technically have any corn syrup or whey. But maybe they are close enough, with sugar syrup and protein isolate. The Chocolate Chip flavor ingredients begin, "Organic Brown Rice Syrup, Organic Rolled Oats, Soy Protein Isolate."

http://www.clifbar.com/products/clif/clif-bar

Yeah, 15g Sugar is about 57% of the sugar you should have in a day.

Yeah I feel the same way. Instead of actually making better, healthier products this industry actually tried to trick people through marketing. If your business relies on deceiving your customers (or worse, their parents) then frankly you're doing something wrong.

I don't know how it is elsewhere but in France (maybe the whole EU?) they were forced to drop the "weight loss" argument from their marketing materials because it was unsubstantiated. So now they merely imply it.

I enjoy eating cereal from time to time and I actually used to eat some every day but I decided to cut my consumption drastically because all my favourite brands are basically 50% sugar.

I notice these bars every time I see them in the store. Its amazing how big a difference package design can make.

yeah that's the standout to me, "we changed our packaging and started winning". Not a market I'd like to be selling in..

The packaging always draws comments from cashiers when I buy them. People seem to respond well to the idea of a simple ‘ingredient list’ right on the front.

The mind boggling thing about it is that people pay $2(?) for 10 small nuts and two dates. (Who really needs 3 egg whites at random times in the middle of the day?)

Buy nuts and dates in bulk for less than half the price, put a few of them in a small bag in your backpack at the beginning of each day, and the problem is solved.

People who run and work-out believe they need a ton of protein. There's never enough. These bars likely are a bit more expensive than the competitors but are deemed worth it because they are simple, natural ingredients, which might be pretty hard to come by from any of the competitors.

I think that most people need less protein than they believe. Nutrition marketing plays on the idea that if a little bit is good, then more is better -- but sometimes less is better. Apparently, the average person in the US already gets twice as much protein as they need.

I'm really skeptical about the nutrition bar industry (and supplements in general).

Alternate solution for the eggs: make a lot of hard-boiled eggs. Store them in the refrigerator. Put three of them in the backpack each morning. Or just eat them at breakfast. Including the yolks adds another ~8 grams of protein. It's quick and easy, and frees one's mind from marketing manipulation.

If people want to pay for the convenience of a product that doesn't need to be prepared, has a long shelf life, and can be thrown in a purse and survives bumpy rides...then let them.

There is real value in this kind of convenience and it shows because people are clearly willing to pay for it. Yes, absolutely you can just boil a bunch of eggs every few days and take them with you in relatively large hardshell containers everywhere....but when you're running to the gym, going to meet a friend, riding public transportation, running from meeting to meeting at work, going to a concert....I mean...you've got to admit that the RXBar starts sounding better than having $2.

I'm not stopping anyone -- just pointing out that it's not rational or solving a real problem. :)

I wouldn't carry hard-boiled eggs around with me either. I do carry small bags of nuts and dried fruit around though.

You’re saying convenience is not a value add, which I think is wrong.

It actually is solving a real problem. Just not one you may particularly care about.

Anything sold is sold for the sake of convenience. Most of the problems we seeing being advertised today are marketed as solving real problems, when in fact its being sold a convenience. Spending 10 minutes boiling a few eggs, then putting them into a container isn't really that difficult, time consuming or inconvenient we've just been sold that it is thus the market for nutritional bars.

Except for the eggs (which I would argue are not necessary at all but are due to a false demand created by marketing) it isn't really a convenience. Most people don't need or normally want three egg whites at random times between meals, but they have been trained to "need" it via thought manipulation (a.k.a. marketing).

If people want to know what their diets really need, it usually isn't something like protein or supplements -- it's to stop eating things that contain refined, added sugars and to start eating more fresh vegetables. :)

I don't think that buying a few bags of nuts and dates is more difficult than buying a "nutrition" bar -- it's just a different kind of habit, and one that a person has to actively self-train (rather than be trained in by external manipulations).

It isn't worth debating it too much -- I just find it interesting. I lean towards DIY with food in general.

> the average person in the US already gets twice as much protein as they need

The average person consumes twice as much as the minimum recommendations, but still far less than the maximum recommendations. If anything, americans eat too little protein.

https://www.ncbi.nlm.nih.gov/pubmed/18469286

I don't think RDAs are "minimum recommendations" but rather what's considered healthy (1)

Also, from the report you linked, the conclusion seems to be "efforts should be undertaken to ensure that Americans consume the recommended amount of protein" and that "The percentage of the male population who consumed less than the estimated average requirement was very low". So, I'm not sure how you're getting to the conclusion that we ought to be eating more.

(1) https://www.ncbi.nlm.nih.gov/books/NBK231420/#_ddd0000013_

For active people trying to build muscle or lose fat while preserving muscle mass, studies have shown benefits for up to 2.2g protein/kg bodyweight. Which is a lot of protein and can be hard to come by. Sure, if you're sedentary and not trying to change body composition you don't need anywhere near that much.

Albumin deficiency is a real risk from some digestive disorders. Eggs are a great source of protean, but get really old. So, there is a significant portion of the population that legitimately seeks a very high protean diet.

ex: https://en.wikipedia.org/wiki/Crohn%27s_disease

The funny thing is that calorie intake in general scales more with physical activity than protein need. Like, a vegan diet is easier if you're very physically active.

> People who run and work-out believe they need a ton of protein.

As a recreational runner I find people are more obsessed with carbs except for the post-run recovery phase, unless when they are trying to lose weight and that is the reason they are running. High-protein low-sugar foods take longer to digest so sate your hunger for longer reducing the willpower required to eat less. They are getting it a little wrong as "low-sugar" is the key part there and more complex carbs will do the same job and probably be cheaper (though obviously an amount of protein is vital too and having a bit extra does no harm).

I'm an occasional buyer of (egg-free) granola bars. Frankly, eating from a bag is not nearly as practical or enjoyable (a good mix doesn't taste the same as individually eating ingredients), especially at work or on the move. An alternative would be to make our own bars, but that's often messy, and you need an oven to get a good result. My experiments didn't go well :|

I think that there is a significant difference between granola bars and mixed nuts -- granola bars usually have sugar and other unhealthy ingredients added to them.

Sorry, it's mixed nuts then, I didn't realize there was a difference.

Convenience. Same as bottled water.

I've always looked for a moderately-priced meal replacement bar not filled with additives/sugar/etc. While I do drink Soylent, it's not my favorite thing ever, so I'd rather have something solid too in my arsenal like an RXBar to supplement my regular meals. While the taste isn't anything to write home about, what it really has going for it is that I don't get sick of it like I do the fake tasting protein bars you get in the stores.

Favorites: chocolate sea salt, pumpkin spiced, blueberry.

"We tell you what’s on the inside on the outside."

That's a really nice slogan.