David Protein’s acquisition of Epogee and a subsequent lawsuit are threatening to tear the CPG world apart

It was filed by Own Your Hunger, Lighten Up Foods and Defiant Foods, all of which make low-calorie foods. The companies allege that David Protein acquired Epogee through “secretive and collusive conduct” to control the use of the modified plant-based oil esterified propoxylated glycerol, known as EPG. David announced the acquisition on May 28, along with a $75 million Series A round for a total of $85 million in funding to date. 

The plaintiff brands say their businesses rely heavily on Epogee, the Indiana-based food tech company that makes the patented fat replacement, which claims to help lower calories from fat by 92%. Now the brands are asking the court for a temporary restraining order that prevents David Protein from “restricting, limiting or denying access to EPG to existing customers and qualified food manufacturers who previously had access.” Snaxshot had previously reported that David would be looking to cut off the supply of EPG. The three companies also collectively listed about $107,000 in lost sales, $449,000 in R&D investments and monthly operational losses of about $15,000, among other costs. 

At the heart of the issue for these brands is the fact that a well-funded new startup is buying an important supplier of theirs, threatening to cut off access to that key ingredient and, in turn, potentially limiting the types of products people can buy with EPG in them.

David Protein declined to comment on the lawsuit.

Mckay Fugal, co-founder of Defiant Foods, told Modern Retail the brand was founded in 2021 and began selling its high-protein chocolate in 2024 after years of R&D. He said that it took the company finding Epogee in 2022 to be able to formulate its chocolate, which contains 220 calories and 12 grams of protein per bar. With EPG being an alternative fat, Fugal said the ingredient contains 0.7 calories per gram versus nine calories in traditional fat. “Fat is a very important part of chocolate and, without it, we wouldn’t be able to call our product ‘chocolate,’” Fugal explained.

Fugal said the lawsuit was initiated by Own your Hunger, with Lighten up Foods and Defiant joining the filing. Fugal said Defiant is run by himself and his wife, co-founder Leilani Fugal, and has been bootstrapped while slowly growing. “All of us [companies] have built our businesses around EPG as a key ingredient,” Fugal said. “Without it, we don’t have a product, so David effectively put a lot of small businesses out.”

Fugal said that, prior to the acquisition, Defiant and other Epogee clients had been informed of supply shortages. “We’d heard rumors of the potential acquisition about two weeks before it actually happened,” Fugal said. But, he said, they were assured by Epogee that “things will be back to normal” in the coming months.

Defiant sells its products through its DTC website and has recently been in talks with retail buyers. “We’ve had to put [that] on pause because of this,” Fugal said. 

The other brands that are suing David Protein are also drawing public attention to the lawsuit.

Own your Hunger, which makes desserts and nut butter alternatives, has informed customers through its website about the upcoming supply disruptions. “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,” founder Ruz Safai wrote. “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).” 

Some customers — including David Protein fans and fans of the plaintiff brands — are also taking notice of the news, with some Reddit users calling for a boycott of David Protein for monopolizing EPG and preventing other better-for-you brands from using the ingredient. One proclaimed fan of David’s bars urged the company to reconsider the decision. “Please realize that we, your customers, are also loyal to many other brands that are crucial to our diets and meal planning,” the commenter said.

On Instagram, one user commented that they were “super bummed” about David’s decision to acquire Epogee. The brand’s account replied, “We understand the frustration—our decision to acquire Epogee was intentional, focused on securing supply chain integrity for our own formulation needs. It wasn’t about disruption; it was about control. That said, we hear you, and we don’t take lightly the impact this may have had on others in the space.”

Fugal said the hope is that, eventually, there will be EPG competitors with alternative fats for food companies to use. “But it will take time, so we’ll be out of business and have to shut down before then,” he said.

Rob Freund, an advertising and e-commerce attorney, said that this type of lawsuit is uncommon in the industry because antitrust claims in CPG over a single proprietary ingredient are extremely rare.

“Most antitrust litigation in CPG focuses on price-fixing or market allocation, and not on one company acquiring an ingredient and then cutting off competitors,” Freund said. “The case is certainly an outlier, and it’s pushing the boundaries of the ‘essential facility’ doctrine by applying it to a food ingredient.”

Fugal said he’s aware of the lawsuit’s unprecedented nature. “I looked into antitrust laws myself and saw there hasn’t been a case of this nature,” he said. “We know it’s an uphill battle, but we’re not going to give up that easily on our product, and neither will the other companies.”

David’s use of EPG itself has been somewhat controversial among the better-for-you CPG space. Rahal recently told Modern Retail the startup has receives flack over its use of oil EPG, which keeps its bars at 150 calories per serving, but which some have decried as unhealthy because it is modified plant-based oil.

Fugal said he’s personally a fan of David’s bars for its macro nutrients. “I just believe there should be competition and they shouldn’t try to stop others from using EPG,” he said. “It’s disappointing to see that this is the move they’ve taken.”