On March 17, 2025, PepsiCo announced its agreement to acquire Poppi, a burgeoning prebiotic soda brand, for $1.95 billion, capturing significant attention as the company seeks to innovate within the beverage segment amid shifting consumer preferences. The deal, which entails $300 million in anticipated cash tax benefits, effectively positions the net purchase price at $1.65 billion and marks another strategic move by PepsiCo to expand its offerings to meet the demand for healthier beverages.
Poppi has gained prominence for its unique formulation, combining prebiotics, fruit juice, and apple cider vinegar to create a low-calorie soda with no more than five grams of sugar per serving. Founded by husband-and-wife team Stephen and Allison Ellsworth, Poppi first captured the spotlight when it appeared on the popular reality show Shark Tank, where it garnered the backing of Rohan Oza, co-founder of CAVU Consumer Partners.
Ramon Laguarta, PepsiCo's Chairman and CEO, emphasized the necessity of adapting to consumer needs, stating, "More than ever, consumers are looking for convenient and great-tasting options... poppi is a great complement to our portfolio transformation efforts to meet these needs." This statement reflects the broader trend as consumers increasingly pivot toward beverages with enhanced health benefits.
Poppi's impressive sales history supports this assertion; the brand recorded $500 million in sales last year and holds approximately 1% market share of the carbonated soft drinks category, according to industry reports. Reflecting on the brand's rapid ascent, Allison Ellsworth remarked, "We never imagined how many people we could reach through hard work... and I know they will honor what makes poppi so special."
This acquisition arrives concurrently with the growing competition within the functional beverage market; rival Coca-Cola recently launched its own prebiotic soda called Simply Pop, showing the industry's shift toward gut health products. Beverage giants like PepsiCo are recognizing the fast-growing segment, with the U.S. market for functional drinks surging 54% to $9.2 billion from March 2020 to March 2024, according to NielsenIQ.
Market experts note this transition is pivotal as traditional sugary sodas see declining demand. J.P. Morgan analyst Andrea Teixeira observed, "The deal helps establish a foothold in the fast-growing 'modern' soda segment and shores up a CSD portfolio that's been losing share for years to Coca-Cola and Keurig Dr Pepper."
The acquisition highlights PepsiCo’s strategy of acquiring innovative brands rather than developing new products internally, as indicated by their prior plan to launch their own health-focused soda, Soulboost, which was shelved amid doubts about its market viability. Instead, PepsiCo opted to purchase established competitors, enhancing its standing within the competitive beverage industry.
Since its founding, Poppi has expanded its offerings to include 14 exciting flavors, such as Orange Cream, Root Beer, and Cherry Limeade, which have appealed particularly to health-conscious millennials and Gen Z consumers. This consumer base has nurtured brand loyalty, and the potential for more significant growth is apparent.
Poppi's nutritious claims have not come without scrutiny, as evidenced by the class-action lawsuit filed last summer alleging the drink is "basically sugared water". Nevertheless, the brand's aggressive marketing strategies, including high-profile ads and influencer collaborations, have largely contributed to its visibility and growth.
This acquisition also reflects PepsiCo's broader ambitions to continue its evolution toward healthier product offerings. Having previously acquired brands like Siete Foods and announced other innovations, PepsiCo is diligently working to align its portfolio with consumer trends favoring wellness-oriented options.
The transaction is subject to customary closing conditions, including regulatory approval, and expands the corporate horizon of PepsiCo as it solidifies its commitment to evolve its beverage strategy. Both the industry and stakeholders will be watching closely as PepsiCo integrates Poppi and shapes the future dynamics of the health-focused beverage market.
PepsiCo aims to lead the way within the beverage and snacks sector by trailblazing innovations and acquisitions, establishing itself at the forefront of modern consumer preferences—especially those inclined toward functional and healthier products. With its exceptional growth and popularity, Poppi symbolizes not just changing tastes but also the potential for sustained growth and success.
