Quest Nutrition, a maker of protein bars ranked No. 2 on the Inc. 5000 list of the fastest growing U.S. companies in 2014, was acquired on August 22 by Simply Good Foods Co. for $1 billion. In its first three years of operation, Quest grew by 57,000 percent and reached revenues of $82.6 million. It's now sold in huge chain stores such as Target, Walmart, and GNC.
In announcing today's deal, the Simply Good Foods Co. said Quest expects revenues of $345 million this year. Like Quest, Simply Good is a well-known maker of protein bars. It sells under the brand names Atkins and Simply Protein. The Quest brand is stronger among younger, urban consumers, while Atkins appeals to an older, suburban crowd.
Quest was started by Tom Bilyeu, Ron Penna, and Mike Osborn, all software industry veterans, in 2010. Their first protein-packed nutrition bars duplicated a recipe devised by Penna's wife Shannan Penna, then a fitness trainer. The company's initial growth was driven by free handouts to fitness influencers, and the fitness industry would remain a bedrock of its customer base. As Quest grew, it branched into foods such as low-carb, high protein chips and even pizza.
In October 2016, Bilyeu left the company to launch Impact Theory, a media company, with his wife Lisa Bilyeu. In 2017, Dave Ritterbush, formerly the CEO of popchips, became the CEO of Quest.
While Clif Bar remains independent, nutrition bars have recently been popular acquisition targets. Reportedly, analysts at Bernstein Research estimate the category is growing at about 11.4 percent annually. Among the larger deals: Mondelez purchased refrigerated nutrition bar company Perfect Snacks in January; PepsiCo bought Health Warrior in 2018; and at the end of 2017, Kellogg's bought RxBar for $600 million.
Quest has been widely referred to as a billion-dollar company since at least 2015, so the price may actually come as a disappointment to some. The founders managed to bootstrap the company until 2015, when they placeholdercut a deal with VMG, a private equity firm. That deal reportedly valued the company at about $900 million.
The founders of Quest were not immediately available for comment.