Food Entrepreneur - January 7, 2020 - 4

FOOD ENTREPRENEUR

Peter Rahal's

NEXT
VENTURE
BY MONICA WATROUS

eter Rahal once fired his mother for
attaching product labels incorrectly.
It was in the early days of RXBAR,
the business he co-created in his parents'
suburban Chicago basement and sold to
Kellogg Co. for $600 million less than five
years later.
Today, that obsession with quality is
an attribute the founder-turned-funder
seeks in other entrepreneurs. Following the
Kellogg transaction, Mr. Rahal launched
Litani Ventures, an investment company,
to partner with food industry start-ups and
help scale innovative product concepts.
"Litani (pronounced lit-TAWN-ee)
means 'humble lion,'" Mr. Rahal said.
"That's a characteristic I look for in successful entrepreneurs. Because essentially
you need to be a lion, which is a killer, really driven, gritty, ambitious and a leader
... and then humble, both emotionally and
intellectually."
Emerging food and beverage brands
have dazzled investors and sparked a
surge in deals over the past five years. The
consumer packaged goods landscape has
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Food Business News

been upended by start-ups that are agile
and unhindered by barriers to enter the
market. Starved for growth, the world's
largest packaged food companies are
launching venture capital funds to nurture
the industry's promising young brands.
"Professional investors are very smart,"
Mr. Rahal said. "They may think about the
future and take financial risk, but at the
same time they don't have the empathy of
an entrepreneur, especially in food."
Mr. Rahal's investment portfolio
through Litani Ventures includes more
than 15 businesses spanning a range of
product categories, from snacks to beverages to condiments, all tapping into consumer demand for convenience, nutrition
and health benefits. Investment-worthy
products must tick two boxes: Is there
something new or novel about it? Does it
offer value to the consumer?
A product may be novel but not
valuable. Mr. Rahal offered an example
of a nutrition bar broken into three bites.
Sure, it's new to the marketplace, but will
consumers find value in those three bites?
"I think there are a lot of

entrepreneurs who are trying to make
foods that solve a problem that doesn't exist," Mr. Rahal said. "It's hard for investors,
retailers, suppliers, all stakeholders to
filter through what is real and what isn't...
People are looking for value in food, and
I think some people are making food that
doesn't bring value. I have a hypothesis
that humans in this culture don't want
to eat caffeine... You'll see bars that put
coffee or caffeine in a bar, and I think
that solves a problem that doesn't exist
because who doesn't enjoy their hot morning coffee? No one needs to replace that."

Setting a high bar
The stunning success of RXBAR may
be owed to a combination of timing, instinct
and hustle. The business launched against
the backdrop of a burgeoning clean eating
movement; mainstream shoppers were
starting to scrutinize labels in want of simple ingredients and minimal processing.
In 2012, Mr. Rahal had identified a
gap in a crowded category - a protein
bar that contained no grains, dairy, soy
January 7, 2020

Food Entrepreneur - January 7, 2020

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