PepsiCo announced on Monday that it is acquiring the prebiotic soda brand Poppi for $1.95 billion. This acquisition allows PepsiCo to expand its portfolio with a fast-growing brand in the increasingly popular functional beverage market.
Ramon Laguarta, Chairman and CEO of PepsiCo, stated that consumers are increasingly seeking convenient, tasty options that align with their health and wellness priorities. The deal includes $300 million in expected cash benefits, which reduces the net purchase price to $1.65 billion.
Allison Ellsworth, co-founder of Poppi, expressed excitement about the partnership, stating that combining with PepsiCo would allow the brand to reach a broader audience. She also emphasized that while Poppi’s unique qualities would be preserved, the collaboration would support the company’s growth and innovation moving forward.
Allison Ellsworth created Poppi, originally called Mother Beverage, in her kitchen in 2015. She developed the drink because she enjoyed soda but wanted a healthier alternative that didn’t make her feel bad. She combined fruit juices, apple cider vinegar, sparkling water, and prebiotics, and began selling it at local farmers’ markets.
Poppi’s success skyrocketed in 2018 when Allison Ellsworth and her husband appeared on Shark Tank. Investor Rohan Oza took an interest in the brand, acquiring a stake and leading a major rebrand. This rebranding resulted in Poppi’s new, vibrant packaging with fruit-forward designs.
Oza, co-founder of CAVU Consumer Partners, which has also invested in brands like Oatly and Bai, expressed excitement about the partnership with PepsiCo, saying it would help expand Poppi’s reach to more consumers both in the U.S. and internationally.
However, Poppi’s journey hasn’t been entirely smooth. Last summer, several class-action lawsuits were filed against the brand by consumers who claimed that its products didn’t deliver the gut health benefits as heavily marketed.
Poppi has denied the allegations and pointed out that it removed references to “gut health” from its packaging in late 2023. However, a recent court filing revealed that Poppi has agreed to a settlement, which includes an $8.9 million fund to compensate consumers. A hearing regarding the settlement is set for May 8.
Following the announcement, PepsiCo’s shares rose by nearly 2% in early trading on Monday.