PepsiCo’s Poppi deal strengthens its position in the healthy drinks market as rising prices hurt soda sales. Getty Images
PepsiCo announced on Monday that it will acquire the prebiotic soda brand Poppi for $1.95 billion. The move comes as the company looks to tap into the growing demand for healthier beverages, particularly among younger consumers. PepsiCo, known for its traditional sodas and snacks, is aiming to expand its portfolio as sales of its classic products face declining demand.
The purchase strengthens PepsiCo’s presence in the fast-growing market of health-focused carbonated drinks. In recent years, more people, especially in the U.S., have switched to fitness-oriented products, including prebiotic sodas and wellness drinks. Rivals like Coca-Cola have also jumped on the trend, launching their own prebiotic drink, Simply Pop, under their Simply brand. Other competitors, such as Celsius Holdings and Keurig Dr Pepper, have also been acquiring smaller health and energy drink companies to compete.
Poppi has quickly gained popularity due to its unique formula. The soda blends prebiotics, fruit juice, and apple cider vinegar, creating a low-calorie drink with no more than five grams of sugar per serving. This makes it a healthier alternative to traditional soft drinks, which has appealed to health-conscious consumers.
The Texas-based company has seen remarkable growth. Over the 12 weeks ending on February 22, Poppi’s retail sales shot up by 122% compared to the previous year. The brand now holds around 1% of the total carbonated soft drink market in the U.S., according to data from BNP Paribas.
Founded by Stephen and Allison Ellsworth, Poppi started out as Mother before rebranding in 2020. The couple gained attention after appearing on the reality show Shark Tank in 2018, where they secured funding from investor Rohan Oza, co-founder of CAVU Consumer Partners. Oza’s backing helped the brand grow significantly in the competitive beverage market.
The deal with PepsiCo also includes $300 million in anticipated cash tax benefits, bringing the net purchase price down to $1.65 billion. However, PepsiCo did not share further details about the terms of the agreement.
Financial experts say the acquisition is a strategic move for PepsiCo. Analyst Andrea Teixeira from J.P. Morgan believes the deal will help the company strengthen its position in the modern soda segment. PepsiCo has been losing market share to Coca-Cola and Keurig Dr Pepper for years, and expanding into the healthier soda category could help it regain ground.
With this acquisition, PepsiCo aims to attract more health-conscious consumers and boost its performance in the evolving beverage market. The company is betting on Poppi’s growing popularity to offset declining demand for its traditional sugary sodas and snack products.
