PepsiCo has officially acquired prebiotic soda brand Poppi in a $1.95 billion deal, which includes an estimated $300 million in expected cash tax benefits. This acquisition highlights the rising demand for functional beverages and PepsiCo’s commitment to expanding its presence in the health-conscious drink sector.
Expanding into the Functional Beverage Industry
Over the years, traditional soda consumption in the U.S. has steadily declined, while functional and prebiotic sodas have gained popularity. Consumers are increasingly seeking healthier alternatives with digestive benefits, leading to the rise of brands like Poppi and Olipop.
PepsiCo’s main competitor, Coca-Cola, recently introduced its own prebiotic soda line, Simply Pop, showing a growing industry-wide focus on gut-friendly drinks. Reports indicate that PepsiCo initially explored developing a functional soda under its Soulboost brand but later shifted gears, opting to acquire Poppi instead.
Poppi’s Rapid Growth and Market Impact
Founded in 2018 by Allison and Stephen Ellsworth, Poppi quickly gained traction in the prebiotic beverage space. Its unique apple cider vinegar-based formula, coupled with low sugar content and digestive health benefits, has attracted a strong consumer following.
By 2023, Poppi’s revenue exceeded $100 million annually, securing its position as a major player in the functional soda market. The company also made significant investments in advertising, including multiple Super Bowl commercials, to enhance brand visibility.
Regulatory Approval and Future Prospects
The $1.95 billion agreement includes provisions for additional payments if Poppi reaches certain performance milestones after the acquisition. However, the deal is still awaiting regulatory clearance, and PepsiCo has not yet confirmed an official closing date.
Despite its success, Poppi has encountered legal hurdles, including a class-action lawsuit over alleged misleading health claims. Recently, the company agreed to a settlement of $8.9 million, as per court documents.
The Competitive Market and PepsiCo’s Future Strategy
PepsiCo’s acquisition occurs amid heightened investor interest in the prebiotic soda segment. Poppi’s primary competitor, Olipop, was valued at $1.85 billion in its latest funding round in early 2024. Olipop CEO Ben Goodwin previously mentioned that both PepsiCo and Coca-Cola had expressed interest in acquiring the brand.
By integrating Poppi into its portfolio, PepsiCo strengthens its position in the functional beverage industry and reinforces its focus on health-oriented product innovation.
What Lies Ahead for Poppi Under PepsiCo?
Experts predict that Poppi will benefit from PepsiCo’s extensive distribution network, helping the brand accelerate its global market expansion. With this acquisition, PepsiCo is poised to become a dominant force in the functional beverage space, tapping into the growing demand for gut-friendly, health-focused drinks.
