What Really Happens When You Become an Overnight Millionaire?
Peter Rahal started RxBar out of his mom’s kitchen — then sold it for $600 million. Here’s life on the other side of the entrepreneurial fantasy.
Peter Rahal, the 33-year-old energy bar impresario who sold RxBar to Kellogg for $600 million and became something of a consumer products legend in the process, stands in the gigantic, spotless kitchen of his new Miami Beach mansion. Behind him, floor-to-ceiling windows revealed his pool, his outdoor bar, and Sunset Harbour. Throughout the house are expensive-looking modernist metal chandeliers. The kitchen drawers are filled with gold utensils.
And for dinner, Rahal is eating a can of beans.
Correction: He isn’t even eating the beans. He’s just showing the dinner for one — chickpeas, eggs, avocado — that he makes most nights.
Rahal bought the fully furnished house for about $19 million in May. He splits his time between his longtime Chicago apartment and this place; he chose Miami Beach in part because Florida has no personal income tax. A Ferrari 488 and a cream Vespa are parked in the driveway. A housekeeper, who comes daily, keeps the seven bedrooms spotless, though most are usually empty. Upstairs, there are his-and-hers dressing rooms; the “hers” — which has a Lucite-leg stool topped with pink tufts sitting forlornly at a vanity — is untouched. It’s as if when Rahal was sending wire instructions to get his RxBar money from Kellogg, he ticked a box requesting the “newly rich bachelor” package and this setup fell from the sky.
For a guy who’s been working ferociously for years, it’s a jarring shift. He and a buddy from elementary school started RxBar in 2012 after seeing an improbable opportunity in a very crowded energy bar market. They concocted their original recipe of dates, nuts, and egg whites in the suburban kitchen of Rahal’s mom; ginned up the brand’s package design on a PowerPoint slide; and sold the bars to CrossFit gyms in Chicago, then Indiana, then across the Midwest. By the time RxBar became a business with revenues north of $100 million (with virtually no outside investment), Rahal was grinding at it daily from 7 a.m. to 10 p.m.
Before the Kellogg deal was finalized and he was about to suddenly become very rich, Rahal got worried. “Can I seriously find someone who’s going to love me without the money?”
Rahal prides himself on struggle and says that’s how he built RxBar into a breakout success. Yet now he exists in a rich person’s wonderland, where workers appear and disappear on some imperceptible schedule to clean the pool or fix the elevator, where the kitchen’s surfaces are entirely smooth and glossy. The many contradictions now swirling in Rahal’s daily existence are not lost on him. “As life moves forward,” he says, “an easier life isn’t always a better life.”
Like all entrepreneurs, Rahal believed he had created a thing that is different and better than all the other things out there. Yet only about half of new businesses survive beyond five years, and Rahal not only kept RxBar alive but also made a dent in the food industry. For entrepreneurs like Rahal, money is not just a nice side benefit—it’s affirmation that they are good at what they do: Consumers bought it. Kellogg acquired it.
But now, having won that impossible prize most entrepreneurs only dream of, Rahal is faced with a new reality: Who is he now that he is actually living out the fantasy?
Rahal grew up outside Chicago, the third and youngest son of Lebanese American parents, whose families were both in the juice business. His father’s family supplied ingredients, his mother’s family sold consumer juice brands, and they met at the funeral of an industry executive. His father worked in the family juice business, and Rahal shaped himself after his father’s work ethic and general distaste for frippery. The family rarely celebrates birthdays, for instance, a tradition Rahal continues. “Don’t trust a guy who celebrates his birthday,” he tells me, not really joking. By the time he was in elementary school in Glen Ellyn, Illinois, Rahal was buying and selling remote-control cars, Beanie Babies, and baseball cards.
Rahal is fit and has blue eyes and curly brown hair. He’s good-looking enough that when we went to a coffee shop in Miami Beach, two women were outright staring at him and whispering behind their hands. Though sports and his social life were always fine, school was horrible for him, Rahal says, as he has dyslexia and attention deficit disorder. “I was put in slow classes and labeled stupid and all that,” he says. That, he thinks, made him determined to succeed. “I’ve seen people who haven’t had any adversity in their life, and they’re soft as baby shit.”
After college, Rahal wanted to join the family juice business like his older brothers, but “it was nepotism and politics. There wasn’t a spot, because there’s only so much chairs, and there’s three siblings,” he says. Instead, he worked at a European fruit supplier and, when he returned to Chicago, a transportation startup. He found that his dyslexia and ADD made him great at some things, like pattern recognition and risk evaluation, but “because I’m not good at sequential tasks, I’m not very good at entry-level jobs. I have no problem reporting to someone, but if you look at some sort of repeatable task?”
He began talking with Jared Smith, a friend since first grade, about starting a company. They were both exercise fanatics and adherents of CrossFit, a gym chain and life philosophy that prescribed daily workouts and suggested a diet of lean meats, fruits, vegetables, and foods low on processed ingredients. To some, the energy bar market back in 2012 might have seemed bloated, with Lärabars, Clif Bars, Kind, Luna, PowerBars — the list goes on. Rahal and Smith, though, spotted an opening. “You’ve got to understand nutrition culture,” Rahal says. They brainstormed about making a real-food bar that they could initially sell at CrossFit gyms, which typically didn’t sell any snacks.
In his mom’s Glen Ellyn kitchen, Rahal and Smith experimented with recipes, settling on egg whites as a protein source and dates as a binding ingredient. They named the product RxBar, after the workout chain’s lingo around the daily workout. Along with website sales, Rahal sold boxes to individual CrossFit franchises, where RxBar had virtually no competition. As a bonus, this model was far cheaper than traditional retail. They started small intentionally; it wasn’t like they were building the next Snap or Stripe, but they needed a fan base to grow. “In 2012 or ’13 when we were doing this — it was not cool. Like, you’re going home and making a bar for your gym?” Rahal says.
More money generally means less struggle, and if it’s struggle that made Rahal, how does he find that going forward?
RxBar’s sales grew, and after about two years, Rahal and Smith planned to expand into traditional retail. First, they needed to fix a problem: Their PowerPoint-designed packaging — stock imagery, a giant logo, too much text about nutrition benefits — looked like every other bar. They decided on a minimalist overhaul, this time handled by professional graphic designers. It broke all the rules of nutrition bar packaging: lots of blank space, bold sans-serif type, very few words: “3 egg whites. 6 almonds. 4 cashews. 2 dates. No B.S.”
The redesign catapulted RxBars into retailers everywhere, from Whole Foods to Target, along with a thriving e-commerce business. By 2017, sales were on a tear: RxBar would finish the year with $161 million in gross revenue and about an 18% net income rate. When Rahal and Smith received queries about acquisition from giants like PepsiCo, they hired a banker and decided on three must-haves in any deal: to have a standalone operating model, which would let them keep all of RxBar’s people; to follow through on RxBar’s goal of expanding beyond just bars to a plethora of brands; and to get the most money. Rahal describes the sales process as being like The Bachelor, with casual introductory meetings with the various interested companies, hometown dates where they visited headquarters, and a gradual winnowing until the final rose.
Ultimately the winner was the 121-year-old U.S. corporation famous for Corn Flakes, Pop-Tarts, and Cheez-Its. In October 2017, Kellogg, trying to balance its declining cereal business with snack foods, announced it was acquiring RxBar. The price tag: $600 million. “I didn’t celebrate — the job wasn’t done,” Rahal says. “I got my lunch bag and went to work the next day.”
Rahal and Smith each received a single, one-time payout. Smith, who’d already handed his CFO role to a longtime employee, left day-to-day work. “I was really, really tired,” he says. Rahal, however, decided to stay. Under the terms of the acquisition, he had no obligation to run RxBar, but he still wanted to for the foreseeable future. Other than some structural financial changes and Rahal now having a boss, Kellogg promised that RxBar would continue to be an independent operating unit.
But things pretty quickly started changing for Rahal in unexpected ways. The $600 million figure bedazzled his employees, and he suddenly morphed from founder-boss into figurehead. “You used to be able to just think out loud. It would be like, ‘Hey, that tree’s really interesting,’” he says, indicating at a palm tree. But with his new status, whatever off-the-cuff thing Rahal said sent staff scurrying: “Oh, Peter wants extra trees like that there.” Adding to the sense of strangeness, RxBar more than doubled in size, growing from 85 to 200 employees between 2017 and 2018, and though Rahal green-lit the hires, he didn’t know most of the new people, and “I became a ‘celebrity,’” he says, putting “celebrity” in air quotes.
Though Kellogg’s CEO was praising Rahal in public, by early 2018, Rahal had lost his motivation. “I wasn’t as good of a CEO, because Sunday night, I wasn’t working,” he says. Product introductions, like nut-butter packets in spring 2018, which had once meant life or death for his company, didn’t matter anymore. Rahal was, he realized, turning into a salaried corporate executive, with no upside, no downside, and no risk. “It was such an easy job. I got paid well. If something happened, it’s like, okay, we’re safe at Kellogg,” he says.
In spring 2018, Rahal read Skin in the Game by Nassim Nicholas Taleb, a former trader turned essayist who argues that people must risk personal success and failure to work at their peak. Rahal’s issue crystallized: “That’s when I was like, ‘Wait, I gotta leave,’” he says. He broke the news to Kellogg’s senior management, who appeared to be less than surprised. “One of the guys was like, ‘Yeah, we were betting under a year,’” he says.
Before Rahal left, he did get one last taste of struggle. RxBar had been overambitious with its sales forecast and needed to lay off about 40 staffers. He stayed on to do the layoffs. Then, after he and his number two finished their last layoff meeting, they got a call from RxBar’s quality control: Some bars produced at a third-party manufacturer that were supposed to be peanut-free contained traces of peanuts. That triggered a huge recall, which dragged down net sales for Kellogg’s entire snack business in the first quarter of 2019.
Finally, in May of that year, Rahal left, dropping day-to-day work at Kellogg but staying on as RxBar’s founder — hoping to return to his roots. “RxBar, I was, like, flying out of bed every morning,” he says. “I want to find that again.”
Now, Rahal has time, and lots of it—to drive that Ferrari, go to the Maldives, or just sit on the couch, streaming movies. But he doesn’t. When I ask what he watches on the flat-screen TV in a lounging area off the kitchen, Rahal says, “I would never sit here and watch a movie by myself. I’ve never done that. I don’t see the value in it.” Even when he indulges with his old friends, like on a recent New Year’s trip to the Caribbean, they couldn’t get him to relax. “Everyone’s like, ‘Where’s Peter?’” recalls Rishi Shah, a fellow entrepreneur, venture investor, and buddy from Chicago. “All of a sudden, you look up, and he’s setting up the beach chairs, doing work,” Shah says. “It became a joke.”
If the business side of Rahal’s life has gone as planned, there hasn’t been much of a personal side. While building RxBar, other than working, working out, and sleeping, he didn’t do much else. Then, in 2018, before the Kellogg deal was finalized and he was about to suddenly become very rich, Rahal got worried. “I knew the sale would happen. I was terrified: Can I seriously find someone who’s going to love me without the money?” he says.
So, before the Kellogg sale went through, Rahal proposed to a woman he had been dating. “I put a lot of value in, ‘Oh, she knew me before,’” he says. They married in July 2018; in December, they divorced. “I made something important urgent that shouldn’t be urgent,” he says.
Five months after the divorce — once he left Kellogg — Rahal bought the Miami Beach mansion. He could work from any number of rooms, most with stunning water views, but he’s chosen a small room overlooking the driveway for his office. It’s the one place in the 9,000-square-foot house that actually seems lived in: pads of paper with scrawls on them, a whiteboard with weekly goals, copies of the Harvard Business Review, trade show badges, bottles of beta-carotene and turmeric for a supplement product Rahal was playing with, a flat-screen TV playing Bloomberg on silent all day, a nail clipper he fiddles with during phone calls.
Rahal’s life now is like that of many entrepreneurs after they cash out: advising younger versions of himself and investing in startups. It’s the long term, though, that nags at him. He wants to start another company, to finance it himself—the skin-in-the-game theory: He wouldn’t just make money on a win; he’d lose money if it doesn’t succeed. He also wants it to have a broader impact than RxBar. “I’m pretty hard on myself, so, yeah, we helped people eat better,” he says. But it didn’t have societal implications, so now he’s toying with things like climate, religion, or education. Rahal’s biggest problem, he says, is “anxiety on figuring out the next thing I want to do.”
He and former partner Smith recently started a venture fund and have invested money ranging from $10,000 to $1.5 million in about 15 early stage companies, including Olipop, a high-fiber soda for digestive health, and Huron, a men’s skin care line. On calls with founders from his growing investment portfolio and other entrepreneurs who just want advice, Rahal — now the seasoned entrepreneur — gets straight to the point. In the midst of a conversation with a pair of British snack company owners who are talking in that circular British way, Rahal leans over his cellphone — he takes all his calls on speaker — to cut through their rambling. “So, a PE investor wants to liquidate their shares, and you need to find somebody to replace them—is that what’s going on?” The next call is with co-founders of a CBD company, a red-hot category Rahal worries is “snake oil.” But by the end of the call, the co-founders’ command of the industry, their frankness about how hard startups are, and the regulatory risk they’re facing seem to have won Rahal over, and he’s considering a small investment. “The only way you learn is through investing in something,” he says.
The can of beans sits unopened on the kitchen counter, and Rahal, who has a sore throat, makes himself some green tea with honey instead of eating dinner. He looks tired as he stirs the tea with one of the gold spoons that came with the house. The clinking of metal against the ceramic mug is the only sound to be heard: There’s no music playing, no TV on, no cats or dogs or neighbors or birds or even cars in the near distance.
That’s one of the problems Rahal seems to be grappling with: More money, generally, means less struggle, and if it’s struggle that made him, how does he find that going forward?
It’s weird being so rich, so quickly. Rahal’s now socializing with a group of youngish guys — and it is mostly guys, in his new Miami circle, at least — who have inherited or made a ton of money. He’s invited out to steakhouses with movie producers and music producers. He’s throwing an Art Basel party. He and his new friends talk about the relative tax rates of Florida versus Puerto Rico. He lives on an island with a guardhouse. If he wants to date someone, or if he meets a new potential friend, they tend to do a standard Google check of his name, and the top search results are about how much money he has.
Rahal has to rough up his life. He tries to do this daily, even with small things, like carrying his groceries from the store rather than taking a cab. He fasts for 18 hours at a time. He regularly alternates first-class flights with middle-seat coach tickets.
It also means that to trigger the sense of adversity that’s gotten him this far, Rahal has to rough up his life so he doesn’t get too comfortable. He tries to do this daily, even with small things, like carrying his groceries from the store rather than taking a cab. He fasts for 18 hours at a time. He regularly alternates first-class flights with middle-seat coach tickets. He forces himself to read, which, with dyslexia, he says, is painful.
“With some people, an event like this would change them,” says Shah, his Chicago friend. “And suddenly, Peter’s life has changed — he went through a divorce; in every way, Peter’s life has changed — but I feel like he is what he is.”
And though Rahal says he’s incredibly grateful for everything he has, he’s trying to figure out bigger ways to reintroduce struggle to his life — like starting another company where he stands to lose a lot.
“Humans’ natural tendency is to remove pain, and we’ve come to a point where we’ve done it so well I find myself seeking uncomfortability,” Rahal says. “The question is if you want to grow.”
He muses aloud about his next move. Should it be that important thing, like climate or religion? Or, he wonders, why wouldn’t he be happy opening something like a grocery store? “Why does it have to be bigger?” Rahal says. He speaks quietly, flicking his fingers over his mug, his eyes directed at the kitchen’s luxurious marble countertop, swirled with green. “It’s a problem of ‘it’s never enough,’” he says. “It’s a disease of people who are driven.”