PepsiCo Joins Prebiotic Soda Surge With Poppi Acquisition
PepsiCo is acquiring prebiotic soda brand Poppi.
Poppi was founded in 2018 by husband-and-wife duo Stephen and Allison Ellsworth and originally began as a home-brewed product sold at farmers' markets before garnering attention as a Shark Tank investment. The low-calorie drink combines prebiotics and fruit juice and is available in 14 flavors.
The $1.95 billion Poppi acquisition will include an anticipated $300 million in cash tax benefits for a net purchase price of $1.65 billion.
Health & Wellness Growth
Ramon Laguarta, CEO of PepsiCo, said the move comes in response to consumers increasingly looking for convenient and great-tasting beverage options as their interest in health and wellness grows.
"As we look to reorient our portfolio offerings to address white space consumer needs, the Poppi brand's unique intersection with wellness and culture is a perfect addition to our portfolio," said Ram Krishnan, CEO of PepsiCo Beverages U.S. The brand brings a loyal consumer base and a demonstrated capacity for growth, he added.
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The company is looking to make its mark in the functional soda space — drinks that provide specific health benefits beyond basic hydration — which is growing at a rapid pace. In the U.S., sales of functional beverages increased 54% to $9.2 billion between March 2020 and March 2024, according to NielsenIQ. They now make up about 10% of the total U.S. non-alcoholic beverage market.
Competitor Coca-Cola launched its own prebiotic soda product under the umbrella of its well-known Simply brand just last month. Becca Kerr, CEO of nutrition at the company, said it looked to align the innovation with a name consumers knew and trusted as many brands in the prebiotic soda category are relatively new. The product trend is particularly popular among wellness-focused Gen Z-ers and millennials, she added.
