PepsiCo Acquires Prebiotic Soda Brand Poppi for $1.95 Billion

News Summary

PepsiCo has announced its acquisition of the prebiotic soda brand Poppi for $1.95 billion, marking a significant move towards healthier beverage options. This deal aligns with the growing consumer demand for functional drinks that support wellness. With anticipated tax benefits, the net cost of the acquisition is around $1.65 billion. Since its inception in 2015, Poppi has gained popularity, surpassing $100 million in annual revenue by 2023. The acquisition reflects PepsiCo’s strategy to meet shifting consumer preferences and compete in the expanding functional beverage market.

PepsiCo’s Bold Move: Acquiring Prebiotic Soda Brand Poppi for $1.95 Billion

In a big step toward a healthier future, PepsiCo has announced it is acquiring the trendy prebiotic soda brand, Poppi, for a staggering $1.95 billion. This exciting merger joins PepsiCo’s already diverse portfolio with the fast-growing world of functional beverages, paving the way for a healthier twist on our beloved sodas.

Why Poppi and Why Now?

The acquisition is a strategic move for PepsiCo as consumer preferences continue to shift towards drinks that not only quench thirst but also support overall wellness. Poppi, known for its fizz and gut-friendly benefits, fits perfectly into this trend. With the deal also including $300 million in anticipated cash tax benefits, the net cost of the deal comes to around $1.65 billion. That’s a smart financial maneuver!

A Little Background on Poppi

Poppi’s journey began quite humbly back in 2015 when co-founder Allison Ellsworth crafted the drink in her kitchen under the name Mother Beverage. It’s a refreshing concoction made from a mix of fruit juices, apple cider vinegar, sparkling water, and prebiotics. Who knew gut health could taste so good?

The brand garnered national attention after appearing on the hit show “Shark Tank” in 2018. It was there that entrepreneur Rohan Oza stepped in to invest, helping to rebrand the product into the colorful, eye-catching cans we see today with the snappy name Poppi. Since then, the brand’s popularity has skyrocketed, making it a household name among health-conscious soda drinkers.

Sales Success and Legal Hurdles

Poppi has thrived in the market, surpassing $100 million in annual revenue by 2023 and becoming available in over 120 retailers across the United States. The innovative approach has particularly appealed to younger consumers eager to swap traditional sugary sodas for healthier alternatives.

However, the brand hasn’t been without its bumps along the way. Last summer, Poppi faced a class-action lawsuit regarding its marketing claims related to gut health benefits. The company has since agreed to a settlement, setting up an $8.9 million fund for consumer payments. Navigating these legal waters hasn’t slowed the brand’s momentum, though!

The Market’s Future

Following the acquisition announcement, PepsiCo shares jumped nearly 2%, reflecting investor confidence in this new direction. Market analysts predict that the prebiotic soda market could be valued at about $54.5 million by 2034, indicating a growing interest among consumers for healthy beverage choices. With PepsiCo’s backing, Poppi is poised to expand significantly and tap into this burgeoning market.

Facing the Competition

Rival companies like Coca-Cola are also eyeing the prebiotic soda space, signaling that competition is heating up. PepsiCo’s acquisition of Poppi not only secures a foothold in a lucrative market but also showcases its ongoing transformation towards a food and beverage selection more aligned with health and wellness trends. The global functional beverage market is projected to soar to a staggering $231 billion by 2033!

Overall, this acquisition by PepsiCo signals exciting changes in the beverage landscape. With consumer preferences leaning more towards health-conscious options, brands like Poppi represent a sweet way for soda lovers to maintain their fizzy indulgences while supporting gut health.

Deeper Dive: News & Info About This Topic

• CNBC
• Wikipedia: Soda
• Forbes
• Google Search: PepsiCo Poppi acquisition
• Reuters
• Google Scholar: Poppi soda
• USA Today
• Encyclopedia Britannica: Functional beverages