This Hedge Fund Manager Bets He Can Dull Your Sweet Tooth

Rob Goldstein’s Crave Crush mints temporarily make sugar taste awful.
Courtesy Crave Crush

It started with a Nestlé Crunch bar. One night in 2012, Rob Goldstein returned from a New York kickboxing gym to his Upper East Side apartment and ate a healthy dinner. Then he saw the chocolate, which his son had left on the kitchen table. One bite quickly turned into eight. “I don’t know what came over me,” he says. He decided to find out. If he could reset his taste buds to how they were before that first bite, he thought, his willpower ought to stand a better chance.

Since 1989, Goldstein has been a part of one of the most successful teams on Wall Street. He’s the right hand to Joel Greenblatt, whose hedge fund, Gotham Capital, posted annualized returns of more than 50 percent before returning money to clients in the mid-1990s. After the fund closed, Greenblatt and Goldstein continued to invest their own wealth, famously seeding Dr. Michael Burry, the hedge fund manager profiled in The Big Short, who made a fortune in the financial crisis because he’d bet against mortgage bonds.

These days, Goldstein and Greenblatt manage more than $6 billion of their own and others’ money at their renamed firm, Gotham Asset Management. On the side, Goldstein sells $16.99 packages of mints to battle sugar cravings.

Now 51, Goldstein started researching sugar with the same rigor he’d apply to a powerful investment. He read scientific papers, called experts, and recruited a team. He says he’s put well over $10 million into the mints, which he calls Crave Crush, and that there are clear parallels between making sweet suppressants and picking stocks. “When you invest, you have to look at the facts and ignore what everybody else says or does,” he says. “With this, I didn’t care about how anybody else said anything would work. A lot of people told me it wouldn’t work. There was always a ton of skepticism. I just basically ignored them.”

Early on he experimented with mouthwash, but it dried him out too much. A chance email from a University of Pennsylvania doctor whose research Goldstein had supported led him to check out gymnema sylvestre, an herb native to India known to temporarily suppress a person’s ability to taste sweetness. In ayurvedic medicine, leaves of the plant have long been used to treat diabetes, and most health-food stores carry teas and pills containing the stuff. In his home office, Goldstein opened up a capsule, put a little on his tongue, and tried an M&M. The leaf had an unpleasant bitter taste, he says. But, intriguingly, it made the chocolate taste like “salty mud.”

The UPenn doctor suggested he talk to Gary Beauchamp, director emeritus of the Monell Chemical Senses Center in Philadelphia and an expert on taste and smell. “It took me a while to realize that he was very serious,” says Beauchamp, who told Goldstein about certain mouth-based radiation treatments that sometimes suppressed the motivation to eat among patients who’d lost their sense of taste.

For Goldstein, this was like having a hunch that a company was grossly undervalued and finding proof that he was right. “This wasn’t some guy’s opinion” that blocking taste could curb appetite, he says. “This was hard evidence.” Through Beauchamp, he hired Grant DuBois, a retired chemist who’d worked as the director of ingredient sciences for Coca-Cola Co.

In his lab in Atlanta, DuBois started playing with formulations. One idea, to mix gymnema with a zinc compound, worked: Combining the two prolonged the sweet-blocking effect of gymnema and reduced the bitterness. In mid-2014 the company filed for a patent on the discovery. It was granted last year.

Meanwhile, Goldstein hired Arianne Perry, an elite runner who worked at JPMorgan Chase & Co., to help get the company going. Perry lined up a source of gymnema, hired manufacturers, and persuaded Eric Stice, a psychologist at the Oregon Research Institute, to study Crave Crush’s effects.

Stice uses MRI scanners to look at how people’s brains react to sweet stuff. He says he was skeptical the mints would curb a brain’s response to sugar links, but he’s now convinced Goldstein is on to something. “I was so tickled when we got the results back,” he says. “Like, ‘Ah shit, he was right.’ ” Stice hasn’t published his results yet.

Crave Crush’s dime-size white-and-blue lozenges do indeed make sweets taste awful for a short time. They could be mistaken for regular breath mints if not for a faint mineral taste. Goldstein has spent months handing out samples to friends at poker games, on vacation in Aspen, Colo., or wherever people will listen. Selling Crave Crush may prove to be a bigger challenge. “To me it seems crazy,” says Marion Nestle, a professor of nutrition and food studies at New York University. “Why would anybody want to take something that makes food taste bad?”

It’s not a panacea for the epidemics of diabetes or obesity, either. The wealthy people most likely to buy Crave Crush already eat less sugar, says Barry Popkin, a nutrition professor at the University of North Carolina at Chapel Hill. “It’s a great idea for his friends,” he says, “but it’s not going to affect the population that we’re trying to reach,” meaning poor communities.

Americans spend about $40 billion a year on health supplements ranging from vitamins to bee pollen, estimates the Nutrition Business Journal. While some are effective, many are medically unproven. Supplements related to dieting and weight loss are notoriously faddish, says Yadim Medore, chief executive officer of marketing company Pure Branding. “It’s the category that everyone wants to be in, because everyone sees dollar signs in it,” Medore says.

Goldstein is still not sure Crave Crush will catch on, but he’s gotten much further than he expected. “I was just trying to create something I wanted,” he says. “I figured if I wanted it, other people would, too.” Besides, he adds, if the business fails, “I can afford it.”

On a recent Friday, Goldstein makes his way to the Grand Hyatt in Midtown Manhattan for New York City Mania, a fitness expo. In addition to selling online and through a few high-end pharmacies in New York, Crave Crush is dispatching a handful of staffers across the country to events like these, hoping to build buzz.

A DJ from a company that sells mixtapes is playing an album of exercise jams called Mashup Party! Vol. 13. At one end of the lobby, pitchmen show off an array of fad workouts, using hula hoops, a trampoline, and choreography inspired by Bollywood movies. At the other, about 30 feet from the hotel check-in line, bearded men with biceps bulging under their Crave Crush T-shirts chat up personal trainers and occasionally interject a sales pitch.

“I’ll work out all day, and I’m constantly thinking about it,” says Jodi Druzba, co-owner of Average Joe’s Fitness in Rotterdam, N.Y., as she sucks on one of the lozenges. “I wish I could teach my brain to not eat sugar.” One of the Crave Crush workers offers her a peanut M&M. Druzba eats the candy, then twists her face into a grimace. “It tastes like poop!” She buys 60 mints.

—With Patrick Clark

The bottom line: A hedge fund veteran who wowed a scientist with his sweetness-blocking mints is pitching them to a broader audience.

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