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What EPG is
The ingredient is EPG, a modified triglyceride made by a company called Apogee. Olive oil is a triglyceride, three fatty acids attached to a glycerol backbone, and the body can digest it only when lipase clips the fatty acids off. Apogee locked those acids in, so food gets the taste and mouthfeel of fat without the calories. Fat carries twice the calories of protein or carbohydrate, so it makes up most of the calories in food.
The supply squeeze
David Protein grew to about 90% of Apogee's sales, then to a hundred and fifty percent of its available supply, meaning Apogee could not meet the demand. Peter Rahal had signed a supply agreement at the start, with protection around a change of control and most-favored-nation terms on price and inventory. He expected the dependency to end in litigation, extortion, or a purchase. Six months into the company, Apogee's chairman came to him with an offer to take it over.
Customers left behind
Three or four other companies bought the same ingredient, and none had a supply agreement. The acquisition notice told customers without one that no supply would follow. An antitrust claim and lawsuit followed and was dismissed three times. One customer left short of supply, a former founder, was later recruited onto the team.
How can a fat pass through undigested?
Fats are digested when the enzyme lipase clips fatty acids off the glycerol backbone. EPG, short for esterified propoxylated glycerol, inserts short propylene oxide links between the glycerol and each fatty acid. Those links keep lipase from reaching the bonds, so the molecule passes through the gut intact. The ingredient was first developed in the 1990s by ARCO Chemical.
Why does fat carry twice the calories?
Food energy is counted in kilocalories per gram: about 4 for protein and carbohydrate and 9 for fat, under the Atwater system that American chemist Wilbur Atwater developed in the 1890s. Fat molecules are mostly carbon and hydrogen with little oxygen, so there is more to oxidize and more energy to release. Carbohydrates are already partly oxidized, which leaves them with less.
How did earlier fat substitutes work?
Olestra, a sucrose polyester made by Procter & Gamble, was approved by the US FDA in 1996 for snacks. Its fatty acids attach to a sucrose core in such large numbers that digestive enzymes cannot cleave them. Products carried a label about possible digestive effects until the FDA dropped the requirement in 2003.
Why do buyers want change-of-control protections?
A change-of-control clause is triggered when one party to a contract is acquired, and it typically lets the other side renegotiate or end the deal. Without one, a supplier's new owner could inherit the contract and then reprice or redirect supply. Such clauses are a routine feature of long supply agreements.
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