Pepsi Buys Prebiotic Soda Competitor Poppi for Nearly $2 Billion

Soda making giant PepsiCo is set to enter health-conscious soda market with purchase of ‘poppi’ which appeared on ABC’s ‘Shark Tank’ in 2018.

PepsiCo announced on Monday, March 17, it was acquiring "better-for-you" soda brand poppi. Photo courtesy PepsiCo

PepsiCo Inc. announced on March 17 that it will acquire the more-health conscious prebiotic soda brand ‘poppi’ for $1.95 billion.

The deal, which includes $300 million in anticipated cash tax benefits, brings the net purchase price to $1.65 billion, according to the press release. PepsiCo’s acquisition of poppi aligns with the company’s broader efforts to cater to more health-conscious consumers and tap into the rapidly growing prebiotic soda market.

“More than ever, consumers are looking for convenient and great-tasting options that fit their lifestyles and respond to their growing interest in health and wellness. Poppi is a great complement to our portfolio transformation efforts to meet these needs,” said Ramon Laguarta, chairman and CEO, PepsiCo.

Poppi, known for its functional soda made with prebiotics, fruit juice, and apple cider vinegar, has gained traction for offering a low-calorie beverage with no more than five grams of sugar per serving.

Co-founded by Allison and Stephen Ellsworth, poppi gained national attention after appearing on ABC’s “Shark Tank” and securing backing from Rohan Oza, co-founder of CAVU Consumer Partners.

“When I created poppi in our kitchen, it was fueled by a desire to create a better-for-you soda,” said Allison Ellsworth. “We never imagined how many people we could reach through hard work, determination, and a clear mission to create a functional soda that stands the test of time. We believe poppi is the soda that will be embraced for generations to come.”

The acquisition is part of PepsiCo’s strategy to counter declining sales in its traditional soda and snack segments, which have been impacted by multiple price hikes and changing consumer habits.

Brands such as poppi and its biggest competitor, Olipop, have gained success in recent years as consumers have moved away from sugar-filled beverages to healthier alternatives.

In a move to compete in the same space, longstanding soda maker Coca-Cola launched Simply Pop in February, a fruit-forward prebiotic soda line, last month.

Simply Pop boasts six grams of prebiotic fiber and no added sugar, aiming to attract wellness-oriented consumers.

“We knew that in order to bring new drinkers into the category, we had to strike that perfect balance of innovation and trust,” said Becca Kerr, CEO of Nutrition at The Coca-Cola Company, at the time.

The poppi deal includes potential earnout considerations tied to performance milestones, and PepsiCo anticipates leveraging its commercial capabilities to accelerate poppi’s growth and innovation.

The acquisition is still subject to regulatory approval and other customary closing conditions, the press release noted.

Reuters contributed to this report.