Catalina Crunch: Krishna Kaliannan. From Homemade Keto Cocoa Puffs to Breakfast Aisle Breakthrough
Krishna Kalyanin created Catalina Crunch, a high-protein, low-carb keto cereal, after developing type 1 diabetes and epilepsy in college forced him to adopt a ketogenic diet. Starting from his apartment kitchen in 2017, he scaled the business to over $100 million in annual sales by leveraging new alternative ingredients like pea protein and monk fruit, eventually expanding from direct-to-consumer sales to major retailers like Whole Foods and Costco.
Summary
Krishna Kalyanin was diagnosed with type 1 diabetes at age 17 while visiting the University of Pennsylvania, and later also diagnosed with epilepsy. These health conditions led him to adopt a ketogenic diet, which is low in carbohydrates and sugar. After graduating from Penn in 2013, he worked briefly at a hedge fund before attempting several entrepreneurial ventures, including a recruiting platform, an online insurance company, and a Chrome extension called "Escape My Bubble" designed to challenge social media filter bubbles. These tech startups were unsuccessful, teaching him that sustainable entrepreneurial motivation requires deep belief in the product.
While managing his diabetes through a keto diet consisting mainly of eggs and nuts, Krishna became interested in baking and cooking to add variety to his limited meal options. He began experimenting with recreating breakfast cereals using alternative ingredients—specifically trying to make a keto-friendly version of Cocoa Puffs using pea protein powder, cocoa powder, and alternative sweeteners like stevia and monk fruit instead of sugar. After months of iteration, he created an edible product and named it Catalina Crunch, inspired by Catalina Island off California and the movie Step Brothers, choosing the name to convey a premium feel.
The turning point came when a friend in Central Park Venmo'd him $7.99 for a bag of the cereal at grocery store prices, revealing the potential for a food business. Krishna initially sold directly to consumers through a website, with early growth driven by word-of-mouth marketing through diabetes support groups on Facebook and social media posts. He quickly moved from his apartment kitchen to a commercial kitchen in Brooklyn, working overnight shifts and fulfilling orders himself with his wife's help on weekends.
To scale production, Krishna took a cereal-making course at Texas A&M in 2018, which introduced him to commercial equipment and manufacturing processes. He raised $100,000 from a college friend, then $800,000 in subsequent rounds. He partnered with a co-manufacturer in the Midwest to produce larger volumes, but when they couldn't accommodate his packaging requirements for stand-up pouches (which he preferred over traditional cereal boxes), he made the bold decision to relocate to Indianapolis and build his own production facility in a 3,000 square-foot office space, even sleeping in a cot there initially.
Krishna's first-year revenue reached approximately $1 million through D2C sales. However, he recognized that shipping costs made online-only sales unsustainable for a low-priced product, prompting expansion into retail. In January 2020, Catalina Crunch was placed in all Whole Foods locations nationwide after rebranding to emphasize "keto friendly" on packaging. Within six months, it became one of the top-selling cereals at Whole Foods. The company subsequently expanded into Costco and developed a broader product line including snack mixes, cookie bars, and cookies.
A key challenge Krishna addressed was managing volatile commodity prices, particularly for ingredients like cocoa and sunflower oil (affected by the Ukraine invasion). Rather than raising prices or reducing package sizes (shrinkflation), he worked to find alternative suppliers, adjust recipes to use less of expensive ingredients like monk fruit, and maintain consistent product quality and quantity. In 2024, he brought in CEO Doug Behrens to run operations, allowing Krishna to focus on product innovation, particularly optimizing protein and fiber content. The company now operates a 125,000 square-foot facility in Indiana and generates over $100 million in annual sales.
About this episode
<p>Krishna Kaliannan wanted to start a tech company but failed at every attempt. </p><p><br /></p><p>On the side, he was teaching himself how to cook with high-protein, low-sugar ingredients. Not just out of interest, but out of necessity. As a teenager, Krishna had been diagnosed with diabetes and epilepsy, meaning he adopted a keto diet long before it was trendy. </p><p><br /></p><p>Krishna’s home experiments with pea powder and monk fruit eventually became Catalina Crunch, one of the country’s most popular high-protein, low-carb breakfast cereals and snacks. </p><p><br /></p><p>In this episode, Krishna shares how a life-changing health condition sparked an obsession with healthy baking— and a brand that reimagined snacking.</p><p><br /></p><p><strong>What You’ll Learn</strong></p><ul><li>How to turn a health challenge into a business opportunity </li><li>The art and science of baking with esoteric ingredients</li><li>When to trust partners and when it’s best to take charge yourself</li><li>Why the DTC model is great for some industries and disastrous for others</li></ul><p><br /></p><p><strong>Timestamps:</strong></p><p>00:06:16<strong> </strong>- Dealing with diabetes and epilepsy as a college student</p><p>00:12:38<strong> </strong>- What Krishna learns from his early failures in tech</p><p>00:22:43<strong> </strong>- The first, low-sugar cocoa puffs: “Rocks that tasted like soil.” </p><p>00:27:36<strong> </strong>- His homemade cereal gets good enough to sell</p><p>00:32:42<strong> </strong>- Naming the brand: classy alliteration and a nod to a Will Ferrell movie </p><p>00:44:51<strong> </strong>- Learning to make cereal like the pros at Texas A&M</p><p>00:54:43<strong> </strong>- Krishna moves from NYC to Indiana to make sure the cereal is made right</p><p>01:01:04<strong> </strong>- Whole Foods, Costco, and becoming a household brand</p><p><br /></p><p>This episode was researched and produced by Chris Maccini with music composed by Ramtin Arablouei. It was edited by Neva Grant. Our engineer was Kwesi Lee. </p><p><br /></p><p><strong>Follow How I Built This:</strong></p><p>Instagram → <a href="https://www.instagram.com/howibuiltthis/" rel="noopener noreferrer" target="_blank">@howibuiltthis</a></p><p>X → <a href="https://x.com/howibuiltthis" rel="noopener noreferrer" target="_blank">@HowIBuiltThis</a></p><p>Facebook → <a href="https://www.facebook.com/howibuiltthis" rel="noopener noreferrer" target="_blank">How I Built This</a></p><p><br /></p><p><strong>Follow Guy Raz:</strong></p><p>Instagram → <a href="https://www.instagram.com/guy.raz/" rel="noopener noreferrer" target="_blank">@guy.raz</a></p><p>Youtube →<a href="https://www.youtube.com/channel/UCNSfrxNEmCruNtjIzxCBHjg" rel="noopener noreferrer" target="_blank"> guy_raz</a></p><p>X → <a href="https://x.com/guyraz" rel="noopener noreferrer" target="_blank">@guyraz</a></p><p>Substack →<a href="https://urldefense.com/v3/__http:/guyraz.substack.com__;!!Iwwt!RZoD751oWzUzoqqdJiqaoL6HdJfRHDUO1TKvYJ424d3Udn7-Pw9Nj6nEsauh9zcgEvLjUEc$" rel="noopener noreferrer" target="_blank"> </a><a href="http://guyraz.substack.com/" rel="noopener noreferrer" target="_blank">guyraz.substack.com</a></p><p>Website →<a href="https://urldefense.com/v3/__http:/guyraz.substack.com__;!!Iwwt!RZoD751oWzUzoqqdJiqaoL6HdJfRHDUO1TKvYJ424d3Udn7-Pw9Nj6nEsauh9zcgEvLjUEc$" rel="noopener noreferrer" target="_blank"> </a><a href="http://guyraz.com/" rel="noopener noreferrer" target="_blank">guyraz.com</a></p><p><br /></p><p>See Privacy Policy at <a href="https://art19.com/privacy" rel="noopener noreferrer" target="_blank">https://art19.com/privacy</a> and California Privacy Notice at <a href="https://art19.com/privacy#do-not-sell-my-info" rel="noopener noreferrer" target="_blank">https://art19.com/privacy#do-not-sell-my-info</a>.</p>
Key Insights
- Krishna's type 1 diabetes diagnosis at age 17 while visiting Penn forced him to immediately manage his health independently in college, requiring him to take insulin proportional to carbohydrate intake and creating strong financial incentives to reduce insulin use.
- The ketogenic diet, originally developed in the 1920s to treat epilepsy by starving the brain of glucose, also benefited Krishna's type 1 diabetes management by reducing the amount of insulin he needed to take and its associated costs.
- Krishna's previous tech startups failed because he lacked deep personal belief in the products, demonstrating his insight that entrepreneurial success requires genuine conviction about solving a real problem, not just building technically proficient solutions.
- The moment a friend Venmo'd Krishna $7.99 (grocery store price) for homemade cereal revealed to him that food could be sold as a viable business, a realization he hadn't previously considered despite recognizing there was an unmet market need.
- Krishna deliberately rejected traditional cereal boxes in favor of stand-up pouches from day one because his childhood frustration with resealing cereal bags in boxes led him to believe pouches provided superior user experience, demonstrating how personal pain points can drive design decisions.
- The Texas A&M cereal-making course taught Krishna that experts in the food industry were skeptical his unconventional approach using pea protein and alternative ingredients could work at scale, but he recognized their knowledge was outdated and didn't reflect new available ingredients.
- When co-manufacturers refused to work with him due to low volume, Krishna faced a critical decision point and chose to relocate to Indianapolis and build his own production facility rather than abandon the business, representing a high-risk commitment to entrepreneurship.
- Krishna chose Indianapolis specifically because it reduced shipping costs for ingredients from the heartland suppliers and enabled faster nationwide distribution compared to operating from New York, demonstrating strategic thinking about logistics and geography in the CPG industry.
- The ketogenic diet's rising popularity in 2019 coincided with Whole Foods' recommendation that Krishna rebrand his packaging to emphasize "keto friendly" instead of "low sugar," showing how market trends and retailer preferences shaped the brand positioning.
- Rather than raising prices or reducing package sizes when commodity prices spiked (shrinkflation), Krishna maintained quality by finding alternative suppliers, reformulating recipes to use less expensive ingredients, and absorbing cost increases—a deliberate brand positioning choice.
- Krishna attributes Catalina Crunch's success to "a lot of both" luck and work, but emphasizes that "it's how we built this," not just his individual effort, acknowledging the critical roles of retailers, ingredient vendors, investors, mentors, and family support.
- The transition from D2C to retail was driven by the economic reality that shipping costs for low-priced cereal made online-only sales unsustainable, forcing expansion into grocery stores despite the complexity of retail relationships and margin structures.
Topics
Transcript
Support for today's episode comes from Square, the easy way for business owners to take payments, book appointments, manage staff, and keep everything running in your business without running yourself into the ground. In my neighborhood, there's a shop that sells incredible locally made food, fresh breads, prepared meals, sauces, jams, all from producers within an hour's drive. And they use Square. And as a customer, I love the seamless payment, quick checkout, and easy receipts. Square's intuitive software and hardware simplifies everything. You can sell anywhere in store, online, or mobile while managing inventory and tracking sales in real time. With Square, you get all the tools to run your business with none of the contracts or complexity. And…
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