PepsiCo is acquiring Poppi, a popular prebiotic soda brand, in a deal worth $1.65 billion. This move reflects PepsiCo’s focus on the “better for you” category in response to changing consumer preferences away from sugary drinks and unhealthy snacks. Prior to this, PepsiCo purchased Siete Foods, a maker of gluten-free chips, for $1.2 billion, and acquired the remaining portion of the Sabra hummus brand at the end of last year.
Ramon Laguarta, CEO of PepsiCo, stated, “We have been diversifying our food and beverage lineup through innovation and strategic acquisitions, offering consumers more positive choices. Poppi aligns well with our efforts to meet the demand for convenient, great-tasting options that cater to health and wellness interests.”
With PepsiCo’s extensive distribution network and marketing resources, Poppi could gain a competitive edge over rivals like Olipop. Despite their increasing popularity, prebiotic sodas are still consumed regularly by only a small percentage of consumers. Nataly Kelly, chief marketing officer of Zappi, highlighted the challenge faced by these brands in bridging the gap between brand awareness and functional comprehension.
The acquisition is pending regulatory approval, and the closing date has not been disclosed. Poppi gained a devoted following after its appearance on “Shark Tank” in 2018, originally known as Mother Beverage. The brand promotes its sodas as rich in prebiotics and apple cider vinegar, purportedly beneficial for gut health.
Coca-Cola recently joined the trend with its own line of prebiotic sodas, Simply Pop, while other similar products like Spindrift Soda and Bloom Nutrition have entered the market. Beverage Digest editor and publisher Duane Stanford noted that major players like PepsiCo and Coke are no longer hesitant to explore this segment.
Despite facing criticism for its distribution of vending machines to influencers during the Super Bowl weekend, Poppi continues to experience growth in the health soda market. The functional beverage sector is expanding rapidly, outpacing traditional sodas in growth, with an anticipated $2 billion in sales by 2029.
Olipop recently secured a $1.85 billion valuation following a $50 million funding round, reporting its first profitable year and doubling sales to $400 million. Poppi’s valuation has not been publicly disclosed.
“We will determine whose approach proves most effective – purchasing similar to PepsiCo, or establishing partnerships with established brands, like Coke,” commented Stanford. “A lot of this hinges on whether the gut soda market has lasting potential or is merely a passing trend of our era.” For additional CNN updates and subscription to newsletters, please register an account at CNN.com.
