PepsiCo buys Poppi, the gut-friendly soda brand, for $1.65B
What's the story
PepsiCo has announced its acquisition of popular prebiotic soda brand Poppi in a deal worth $1.65 billion.
The strategic move comes as part of PepsiCo's ongoing transition toward healthier product offerings as consumer preferences shift away from sugary beverages and unhealthy snacks.
The transaction is pending regulatory approval and PepsiCo has not provided a specific timeline for its completion.
Strategic expansion
PepsiCo's recent acquisitions in the health-conscious market
PepsiCo's acquisition of Poppi isn't a standalone event. In January, the company bought Siete Foods, a maker of gluten-free chips for $1.2 billion.
Further, in late 2024, PepsiCo bought the other half of Sabra hummus brand that it didn't own.
These acquisitions, together, show PepsiCo's strategy to expand its footprint in the health-conscious food and beverage space.
Market dynamics
Poppi's unique selling proposition and market competition
Poppi, formerly known as Mother Beverage until its Shark Tank appearance in 2018, sells its sodas as prebiotic-rich and apple cider vinegar-laden drinks that may improve gut health.
Despite the rising popularity of prebiotic sodas, only 5% of consumers consume them regularly, according to Zappi, a consumer research firm.
PepsiCo's acquisition could make Poppi outshine rivals like Olipop, though both brands still have a long way to go in terms of sales and awareness.
Market growth
The prebiotic soda market is growing rapidly
PepsiCo's plans to launch its own Soulboost-based prebiotic soda brand have been shelved after acquiring Poppi.
Despite some criticism over gifting full-sized Poppi vending machines to influencers over Super Bowl weekend, the health-focused soda market continues to flourish.
The functional beverage category, which includes non-alcoholic drinks with added health benefits, is growing faster than regular sodas and is expected to rake in $2 billion in sales by 2029, Coca-Cola's research shows.