PepsiCo has announced its acquisition of prebiotic soda brand Poppi for approximately $1.95 billion, marking a significant expansion in its health-focused beverage portfolio. The transaction remains subject to regulatory approval.
A Strategic Move Towards Healthier Beverages
| Key Figures | Details |
|---|---|
| Acquisition Price | $1.95 billion |
| Poppi’s 2023 Sales | $500 million |
| Number of Flavours | 14 |
| Sugar per Can | 5 grams |
| Notable Flavours | Orange Cream, Root Beer, Cherry Limeade |
PepsiCo’s U.S. Beverages CEO, Ram Krishnan, highlighted Poppi’s strong market presence, stating:
“Poppi has built a loyal consumer base and demonstrated strong growth potential, making it a natural addition to our portfolio.”
This acquisition comes amid increasing consumer demand for beverages with functional ingredients and reduced sugar content. Traditional beverage giants such as PepsiCo and Coca-Cola are pivoting towards health-conscious alternatives, given the popularity of brands like Poppi and Olipop.
Competition in the Better-for-You Soda Market
The better-for-you soda category has witnessed rapid growth, with competitors like Olipop securing a valuation of nearly $2 billion in its most recent funding round. Coca-Cola, rather than acquiring an established brand, launched its own prebiotic soda line under its Simply juice brand.
PepsiCo previously attempted to introduce a healthier soda under the Soulboost label but discontinued the project, reportedly due to concerns over its market viability. Instead, the company opted to acquire a successful competitor rather than developing an in-house alternative.
PepsiCo’s Diversification Strategy
PepsiCo, historically known for sugary soft drinks such as Pepsi, Mountain Dew, and Mug Root Beer, has been expanding its portfolio through acquisitions of health-oriented brands. In October 2023, the company purchased Siete Foods, a Mexican-American clean-label tortilla chip maker, for $1.2 billion.
Ramon Laguarta, Chairman and CEO of PepsiCo, emphasised the company’s strategic focus:
“More than ever, consumers seek convenient and great-tasting options that align with their lifestyles and growing interest in health and wellness. Poppi perfectly complements our transformation efforts.”
The Rise of Poppi
Poppi first gained national attention in 2018 after its appearance on Shark Tank, where it secured investment from Rohan Oza, co-founder of Cavu Consumer Partners. The brand officially launched in 2020, capitalising on the health-conscious consumer shift during the COVID-19 pandemic.
The brand’s formula contains sparkling water, apple cider vinegar, and prebiotics like agave inulin. Despite its rapid growth, Poppi has faced some legal scrutiny. A class-action lawsuit filed last summer accused the company of misleading consumers, claiming its product is “essentially sugared water.”
Nevertheless, Poppi’s marketing campaigns, including a high-profile Super Bowl advertisement and influencer-driven promotions, have contributed to its brand visibility and success.
PepsiCo’s acquisition of Poppi underscores a broader trend within the beverage industry, where legacy soda brands are shifting towards functional and health-focused products. With the increasing popularity of prebiotic sodas, this move positions PepsiCo as a stronger competitor in the evolving marketplace. The coming months will reveal how PepsiCo integrates Poppi into its extensive distribution network while navigating regulatory scrutiny and consumer expectations.
