Kellogg Pays $600M For Glen Ellyn Startup RXBar

GLEN ELLYN, IL —The Glen Ellyn startup that makes RXBars protein started with just two childhood friends, $10,000, and a handful of ingredients. Fast forward to four years later and owners Peter Rahal and Jared Smith have sold their company to Kellogg for $600 million.

The century-old Kellogg Company is best known for its breakfast cereals ala Corn Flakes, Rice Krispies, Raisin Bran, but has watched revenue shrink in recent years as consumers opt for less sugary substitutes. CBS News reports that Kellogg has lost revenue every years since 2013. This is where RXBars fits right in for Kellogg.

Since 2013, Rahal and Smith have seen their once-tiny enterprise explode in popularity. The year after starting, RXBars had moved from Rahal's parents' kitchen to a commercial space in Chicago and made 1.5 million bars to sell online, according to Crain's Chicago.

This year, RXBars is set to sell 120 million protein bars (in 11 different flavors) and turn a profit of $100 million.

The appeal (and subsequent profitably) of RXBars is owed in part to its simplicity. Most of the protein bars contain six or seven ingredients, with the most important ingredient listed as "No B.S" on the startup's stark, eye-catching label.

This is a sharp contrast to most Kellogg cereals, which have struggled to fight against the sugar and high fructose corn syrup stigma amid an increasingly health conscious culture.

According to Crain's, RXBars will continue to operate out of its 242 N. Western Ave., Chicago, office until the sale to Kellogg is finalized. Then, the company plans to relocate to a larger space downtown to accommodate a new era that's sure to include increased sales and production, but still maintain the mantra of "no B.S."

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