PepsiCo announced Monday it has acquired the prebiotic soda brand Poppi for $1.95 billion. The deal, which includes $300 million in anticipated cash tax benefits, effectively brings the net purchase price to $1.65 billion.
PepsiCo's Chairman and CEO, Ramon Laguarta, emphasized that the acquisition aligns with the company's ongoing strategy to enhance its "better-for-you" offerings.
"Consumers are seeking choices that align with their lifestyles and growing interest in health and wellness," he said in a statement.
Laguarta also noted that this acquisition underscores PepsiCo's commitment to meeting the rising demand for healthier beverage options, a trend the company has been increasingly focused on.
Poppi, founded by Allison Ellsworth in Austin, Texas, is known for its low-calorie sodas made with prebiotics and fruit juice, with each serving containing no more than 5 grams of sugar. The brand initially gained traction when Ellsworth began selling her homemade concoctions at farmers' markets before securing investment on the ABC show Shark Tank. It quickly expanded to major retailers nationwide.
Ellsworth expressed her excitement about the acquisition, stating, "We can't wait to begin this next chapter with PepsiCo to bring our soda to more people."
She highlighted how the partnership will allow Poppi to expand its reach while maintaining the unique qualities that have made it popular.
PepsiCo's focus on healthier options is part of a broader industry trend. Coca-Cola is also expanding into the prebiotic soda space, launching its own offering, Simply Pop, targeting wellness-conscious Gen Z and millennial consumers.
The prebiotic soda market, as a whole, is expected to reach a value of $54.5 million by 2034, according to Future Market Insights.
Despite Poppi's success, the brand faced legal challenges last year when several class-action lawsuits were filed, alleging that its products did not live up to the advertised claims regarding gut health benefits.
In response, Poppi removed references to "gut health" from its packaging in late 2023 and agreed to a settlement, including an $8.9 million fund for consumer payments. A hearing regarding the settlement is set for May 8.
Laguarta has previously spoken about the broader shift toward health and wellness, acknowledging that the increased consumer awareness around topics like obesity drugs has influenced behavior.
He reiterated that PepsiCo is committed to adapting its portfolio, noting that the company has focused on reducing sodium, fat, and sugar, while incorporating healthier ingredients such as plant-based proteins and whole grains.
PepsiCo's acquisition of Poppi has been met with a positive market response, with PepsiCo shares rising nearly 2% in morning trading Monday.
