PepsiCo Acquires Prebiotic Soda Brand Poppi for $1.95 Billion

PepsiCo has announced its acquisition of prebiotic soda brand Poppi for $1.95 billion, including $300 million in anticipated cash tax benefits. The purchase expands PepsiCo’s presence in the fast-growing healthier soda category as traditional soda sales decline.

Health-Focused Market Expansion

Soda consumption has fallen in the U.S. over the past two decades. However, prebiotic sodas have gained traction among health-conscious consumers, with Poppi and Olipop leading the market. PepsiCo’s competitor, Coca-Cola, recently launched its own prebiotic soda, Simply Pop.

PepsiCo initially planned to introduce a functional soda under its Soulboost brand but canceled those plans. The decision likely led to its deal with Poppi, which has seen rapid growth in the beverage market.

Details of the Acquisition

PepsiCo will pay $1.95 billion for Poppi, but with tax benefits, the net cost stands at $1.65 billion. The company will make additional payments if Poppi meets specific performance goals within a set time frame after the deal closes. PepsiCo has not disclosed when the acquisition will be finalized, as it is pending regulatory approval.

Poppi’s Rapid Growth

Founded in 2018 by Allison and Stephen Ellsworth, Poppi started as a farmers’ market product and later gained national attention through Shark Tank. The brand features prebiotics, apple cider vinegar, and five grams or less of sugar per serving.

By 2023, Poppi’s annual sales exceeded $100 million. The brand also gained high-profile endorsements from celebrities like Jennifer Lopez, Billie Eilish, and Mila Kunis. This year, Poppi aired its second consecutive Super Bowl ad, signaling its financial strength and commitment to expanding its audience.

Challenges and Market Competition

While Poppi’s growth has been impressive, it has also faced legal challenges. A class-action lawsuit alleged that Poppi misrepresented its health benefits. The company reached an $8.9 million settlement to resolve the claims.

Rival brand Olipop, founded the same year as Poppi, was recently valued at $1.85 billion during a funding round. In 2023, Olipop’s CEO confirmed that both PepsiCo and Coca-Cola had expressed interest in acquiring the brand.

PepsiCo’s Strategy in the Beverage Industry

PepsiCo continues investing in health-conscious beverage alternatives as consumer preferences shift. Young Americans increasingly choose functional drinks with natural ingredients and digestive health benefits. Competitors like Celsius Holdings and Keurig Dr Pepper have also expanded their portfolios with wellness beverages.

With Poppi’s 122% year-over-year retail sales growth, PepsiCo strengthens its presence in the fast-growing prebiotic soda segment. The acquisition aligns with its broader strategy to appeal to millennial and Gen Z consumers seeking healthier beverage options.

More…

• https://www.reuters.com/business/retail-consumer/pepsico-buy-healthier-soda-brand-poppi-nearly-2-bln-deal-2025-03-17
• https://www.cnbc.com/2025/03/17/pepsico-buys-prebiotic-soda-brand-poppi-for-more-than-1point6-billion.html
• https://www.marketwatch.com/story/pepsi-boosts-healthy-offerings-with-poppi-a-maker-of-prebiotic-drinks-8ceb9d31