Days after announcing the acquisition of Epogee—the foodtech firm behind a novel fat replacer in David protein bars called EPG—David has been sued by food companies who say they can no longer access the ingredient.
In a lawsuit* filed in New York vs David cofounder Peter Rahal, Linus Technology (trade name: David Protein), and Epogee, plaintiffs OWN Your Hunger, Lighten Up Foods, and Defiant Foods allege that the defendants violated federal antitrust laws and New York’s Donnelly Act by “orchestrating the acquisition of Epogee through secretive and collusive conduct.”
They then allegedly used their “resulting control over EPG to exclude competitors and create an artificial monopoly.”
According to the complaint, “the plaintiffs and numerous other food manufacturers invested hundreds of thousands of dollars in R&D, manufacturing infrastructure, marketing campaigns, and product development specifically tailored to EPG [which looks and behaves like fat but contains a fraction of its calories], reasonably relying on Epogee’s encouragement and assurances of continued access.
“These brands fundamentally restructured their entire business models around EPG as their core competitive advantage and ‘secret sauce’ ingredient, making EPG access essential to their survival.”
Peter Rahal did not immediately respond to a request for comment from AgFunderNews.
‘Systematic supply denial and market manipulation’
In March, allege the plaintiffs, Epogee first started reporting shortages for certain types of EPG, but told customers supplies would be available in May. Responses to subsequent inquiries, they claim, were “vague” until May 29, when Epogee emailed clients to say it would no longer accept new orders and was winding down accounts following its acquisition by David.
When they inquired about remaining EPG stock, they were informed that David had “purchased, secured, and stockpiled… all of the capacity for at least two years of supply… to ensure competitors have no access to EPG.”
By effectively stringing them along for a couple of months “during the concealed acquisition period” so that they did not start making alternative arrangements, David and Epogee “created artificial market conditions favorable to monopolization through systematic supply denial and market manipulation,” they allege.
Since March 25, when EPG first became unavailable, the plaintiffs say they have experienced “substantial operational disruptions” and lost sales.
In short, they claim, “The acquisition and subsequent exclusionary conduct constitutes a deliberate bait-and-switch scheme that systematically eliminated the very brands whose substantial investments, innovations, and market development efforts had elevated EPG’s commercial success and market value.
“By pulling the rug from under invested competitors, defendants reaped the benefits of others’ risk-taking and financial commitments while simultaneously destroying the businesses that had propelled EPG’s market acceptance, creating an unconscionable transfer of value from the actual innovators to the strategic acquirer.”
‘Layoffs, product discontinuation, and closures’
According to the complaint, “Not counting the plaintiffs, at least five other known food manufacturing businesses are planning or have executed layoffs, product discontinuation, and closures due to EPG’s unavailability.”
Among other things, the plaintiffs are asking the court to grant a temporary restraining order preventing David from “restricting, limiting, or denying access to EPG to existing customers and qualified food manufacturers who previously had access.”
According to Ruz Safai, founder at OWN Your Hunger, “EPG was the cornerstone of our formulation strategy—it allowed us to deliver indulgent, satisfying products without compromise. David Protein’s decision to cut off our supply after acquiring Epogee isn’t just anti-competitive; it’s anti-innovation.”
In a note on the company website, Safair adds: “We regret to inform you that we must discontinue our hazelnut spreads, and our peanut butter spreads, as well as our wondersquares, for a specific period of time… The majority of our time is now focused on immediate efforts on exploring potential options to save our company and other companies that use EPG (many of them being small businesses).”
Blake Sanburg at Lighten Up Foods, told us that he has spent the last eight months developing a chicken dipping sauce utilizing EPG and that “Throughout this process, I maintained consistent communication with representatives at Epogee, who initially provided technical support and assurances regarding the availability of EPG.”
After extensive formulation and collaboration with a co-packer, he said, “I finally received a sample that met my standards and was ready to move forward with production. However, upon attempting to schedule a production run, I discovered that Epogee had excluded me from further access or engagement, despite nearly a year of work and approximately $40,000 invested in this project.
“This unexpected development has left me without a viable alternative to EPG and has jeopardized the future of my product, which was built entirely around the unique properties of this ingredient.”
What is EPG?
To make EPG (esterified propoxylated glycerol), which can be listed on food labels as ‘EPG (modified plant-based oil),’ Epogee splits plant-based oils such as canola into glycerin and fatty acids, inserts a food-grade link, and reconnects them.
As EPG is resistant to lipase, an enzyme that breaks down fat in the body, hardly any of its calories are released. For context, 1g of fat contains 9 calories, while 1g of EPG contains just 0.7 calories.
This proved highly appealing to David, which seeks to reduce the percentage of energy coming from fats and carbohydrates in its protein-fueled bars.
Unlike Olestra, which had a lower melting point (and messy side effects) or fat replacers made from sugars, gums, starches or fibers, EPG functions like fat because it’s made from fat, Rahal told AgFunderNews last week.
“David accounts for about 90% of Epogee’s revenue, so securing supplies of EPG is mission critical for us. We wanted to de-risk things and control the supply to ensure we have enough EPG to support our business and our growth as our demand occupies all of Epogee’s capacity for the short term.
“Acquiring Epogee also really widens the aperture of our vision and our ability to address consumer different consumer needs across different populations.”
*The case is OWN Your Hunger, Lighten Up Foods, and Defiant Foods vs Linus Technology (which operates under the trade name David Protein), Epogee, and Peter Rahal, filed in the Southern District of New York on June 2, 2025. Case: 1:25-cv-04544
