Company Profile

COMPANY:No Cow

HEADQUARTERS: Denver

YEAR FOUNDED: 2015

2017 REVENUE: $10 million

EMPLOYEES: 12

Daniel Katz isn't good at sitting still. He gets up each day at 2:30 a.m. to do what he calls an hour-long "heavy workout," which, depending on the day, consists of lifting weights, boxing with a heavy bag, or running sprints on a football field. When he's not pumping iron, the 21-year-old runs a multimillion-dollar plant-based packaged-food business that until very recently had just one employee: him.

"I love what I do, so I pretty much work around the clock," says Katz, who has variously started eight businesses since turning 12. His latest company, No Cow, which is based in Denver and sells an assortment of low-sugar nondairy protein bars, cookies, and nut butters, is now in 14,000 stores nationwide and generated more than $10 million in gross sales last year. It stands to double sales by the end of this year, says Katz.

A timely minority investment last February--Katz declined to disclose the amount--from General Mills' investing arm 301 Inc. and Chicago private equity firm 2X Partners has surely helped the company scale. But Katz is undoubtedly a force, says Andy Whitman, 2X's founder and managing partner. He notes that Katz, who goes by D, is the youngest entrepreneur his firm has ever invested in. "He is super passionate, very authentic, and mature beyond his years," adds Whitman.

Indeed, his trajectory alone bears that out. As a kid growing up in Cincinnati, Katz's penchant for trading cellphones on Craigslist quickly turned into a business swapping larger electronics devices. Then buying and selling cars (well before he was old enough to drive) turned into buying and selling a house at age 16. Snowplow and reptile-breeding businesses--along with a foray into energy drinks--round out the serial entrepreneur's resume.

"I was thinking of what I could create that multiplies without a lot of overhead," says Katz. The impetus for No Cow, which launched as D's Naturals in 2015, had more to do with a singular stomach issue, however, than any rapid-growth strategy.

Running with it

After dropping out of college, which he attended for all of three months, Katz moved to Los Angeles to start an energy drinks business. He spent most days going from store to store pitching his drinks, which contained amino acids like tryptophan and theanine. He hardly had time for real meals. Instead, he says, he snacked. "I was eating two to three protein bars a day." That diet, naturally, left him feeling crummy. But it wasn't the sugar; it was the whey protein, says Katz, who soon realized that he had a dairy sensitivity.

After a little research, he learned that roughly 60 percent of the population shares his sensitivity to dairy. That was the seed for No Cow, which Katz quickly dropped everything to build. He folded the drinks business, moved back to Cincinnati, and leased office space from his father, who is a real estate developer in the area. While sleeping on an air mattress in the office, dining on cans of Kroger soup, and working 18 hours a day, he spent a year and a half incubating his idea for dairy-free protein bars.   

His big break came after he finagled a meeting with GNC. Wearing a T-shirt and shorts, the then-18-year-old walked into a meeting with several of the fitness retailer's executives. Katz watched, breathlessly, as the execs bit into his homemade protein bars. The response was mixed. One exec announced: "'That tastes like shit. But the idea here is something that you got; you need to take this and you need to run with it.'"

Newly confident, Katz quickly made an appeal to the Vitamin Shoppe, which gave him his first purchase order. From there, he took his idea to a contract manufacturer who agreed to take him on--and help him retool his bars (with eye on improving the taste). "I knew that this idea was something that really, really needed to get out there and get out there quick," says Katz. "I'm not the type of person who would take the farmers' market approach."

GNC would soon come around, as would CVS, which placed No Cow's products in 7,000 of its stores in May 2016. The company--which rebranded, relocated to Denver, and added a CEO after the deal with 2X and General Mills came through--would go on to add grocers Sprouts and Wegmans, among others. "We easily could be targeting 20,000 stores in the U.S. alone," by the end of 2018, adds Katz, whose company now employs 12, including himself.

Almond joy

Katz has hit on a growing--if still small--market, says Darren Seifer, a food and beverage industry analyst for the New York City-based research firm NPD Group. He notes that the average American today will consume a dairy alternative like soy ice cream and almond milk 20 to 21 times a year. (In other words, every other week.) But that figure is rising each year. "Consumers are more interested in what happens to their food before it hits shelves," Seifer adds. "Knowing that no animals were involved in the creation of a product might make people feel better about using it."

Whitman agrees that Katz has struck a chord: "D is a smart young entrepreneur who managed to identify a macro trend and get it to scale very quickly." Of course, Katz has much to learn, adds Whitman. "He's young; there are things he's never been through." But that shouldn't stop him, Whitman says. "To his credit, [Katz] seeks out help. Long before I was an investor, I was giving him advice. That's a sign of a smart entrepreneur."

nocow_INC
Published on: Apr 19, 2018