PepsiCo is venturing boldlyinto the booming functional beverage sector with the acquisition of Poppi, the prebiotic soda brand, for $1.95 billion, announced on Monday, March 17, 2025. The deal promises to enlarge PepsiCo’s portfolio with innovative health-focused offerings, reflecting changing consumer preferences.
Founded by husband-and-wife duo Stephen and Allison Ellsworth, Poppi started its life as a small, homemade concoction made from fruit juice and apple cider vinegar back in 2016. Two years later, the company gained widespread recognition after appearing on ABC's popular entrepreneurial show "Shark Tank." There, they received significant investment from Guest Shark Rohan Oza, who saw potential in their concept.
"When I created Poppi in our kitchen, it was fueled by a desire to create a healthier soda," said Allison Ellsworth, now Poppi's chief brand officer. "I know they will honor what makes Poppi so special and will support our next phase of growth and innovation." The acquisition includes $300 million of anticipated cash tax benefits, reducing the net purchase price to $1.65 billion.
Ramon Laguarta, chairman and CEO of PepsiCo, stated, "More than ever, consumers are looking for convenient and great-tasting options...that fit their lifestyles and respond to their growing interest in health and wellness." With the soda market seeing rapid shifts toward healthier alternatives, the acquisition of Poppi positions PepsiCo strategically within the burgeoning functional beverage segment.
Poppi distinguishes itself by combining fruit juice with natural prebiotics, providing consumers with refreshing yet lower-calorie soda options—each can contains about 5 grams of sugar and 25 calories. Poppi's annual sales reportedly crossed the $100 million mark by 2023, indicating strong market traction. The brand offers 16 different flavors such as Strawberry Lemon, Ginger Lime, and Classic Cola, catering to diverse consumer palates.
The deal marks PepsiCo's latest move to expand its health-oriented beverage offerings, following their $1.2 billion acquisition of Siete Foods and other growth-driven purchases. This trend is echoed across the industry, as competing brands push health-focused products, including Coca-Cola's recent venture with its own prebiotic soda, Simply Pop.
Despite its successes, Poppi's path has not been without bumps. Last summer, the brand faced multiple class-action lawsuits by consumers claiming its drinks failed to deliver meaningful gut health benefits. The suits alleged the beverages contained insufficient amounts of prebiotic fiber, contradicting Poppi's marketing claims.
Poppi has since refuted these claims and removed references to gut health from its packaging. Recently, the brand reached an $8.9 million settlement intended for affected consumers, with approval for the settlement slated for May 8, 2025. The scrutiny has done little to dampen Poppi's rising stardom or their strong celebrity endorsements, which include names like Hailey Bieber and Jennifer Lopez.
The news of the acquisition sent PepsiCo's shares up nearly 2% on the day of the announcement, indicating positive investor sentiment toward the deal and its potential impact on PepsiCo's market strategy. According to Ram Krishnan, CEO of PepsiCo Beverages U.S., the addition of Poppi offers substantial growth prospects as it aligns with the brand's commitment to meet consumer needs for healthier beverage options.
Poppi has carved out its niche presence among health-conscious consumers, gaining popularity as more people seek alternatives to traditional sodas. With its unique intersection of wellness and flavor, the soda has tapped directly—pun intended—into the contemporary demand for healthier choices, positioning it favorably against Coca-Cola's offerings and the wider market.
The acquisition heralds not just the addition of Poppi’s innovative products to PepsiCo’s lineup but also reinforces the company's intention to evolve continually and satisfy shifting consumer appetites. The commitment to build brands with genuine health benefits resonates well with today’s lifestyle-centric consumers, and PepsiCo seems poised to capitalize on this trend.
With the partnership secured, both brands look forward to embarking on this new phase—turning Poppi from its humble, farmer's market origins to possibly becoming one of the staples of PepsiCo's diverse beverage portfolio. The anticipation from both sides speaks volumes about their vision for the future.
"We're thrilled to be partnering with PepsiCo so even more consumers across America can enjoy Poppi," Allison Ellsworth added, emphasizing their shared goal of innovation and accessibility within the beverage sector.
Allowing more people to enjoy Poppi’s unique blend of flavors and health-conscious ingredients can transform the way consumers relate to sodas, making them not just favorites for taste but also for the perceived health benefits they may offer.
