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Dr. Pepper ties with Pepsi for 2nd best-selling drink in US
There's been a shakeup in the Cola wars with second place becoming more competitive. (Credit: KDFW)
PepsiCo said Monday that it is acquiring soda brand Poppi for nearly $2 billion.
The acquisition gives PepsiCo a fast-growing brand in the popular functional beverage category.
PepsiCo buys Poppi
By the numbers:
PepsiCo announced that it will acquire the prebiotic soda brand Poppi for $1.95 billion as the food and beverage giant seeks to tap into the heightened consumer demand for healthy products.
Poppi beverages are displayed in California. (Credit: Phillip Faraone/Getty Images for CLD PR)
They said the transaction includes $300 million of anticipated cash benefits, bringing the net purchase price to $1.65 billion.
PepsiCo shares rose nearly 2% in morning trading Monday.
What they're saying:
"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," PepsiCo Chairman and CEO Ramon Laguarta said in a statement.
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Allison Ellsworth, the co-founder of Austin, Texas-based Poppi, said the combination with PepsiCo will expand Poppi’s reach.
"We can’t wait to begin this next chapter with PepsiCo to bring our soda to more people – and I know they will honor what makes Poppi so special while supporting our next phase of growth and innovation," Ellsworth said in a statement.
Poppi aired on ‘Shark Tank’ in 2018
The backstory:
Ellsworth developed Poppi – then known as Mother Beverage -- in her kitchen in 2015 because she loved soda but was tired of the way it made her feel. She mixed fruit juices with apple cider vinegar, sparkling water and prebiotics and sold the drink at farmer's markets.
The brand took off in 2018 when Ellsworth and her husband pitched it on "Shark Tank." An investor on the show, Rohan Oza, took a stake in Mother Beverage and undertook a major rebrand. Poppi, with its brightly-colored, fruit-forward cans, was born.
"We’re beyond thrilled to be partnering with PepsiCo so that even more consumers across America, and the world, can enjoy Poppi," said Oza, the co-founder CAVU Consumer Partners, which has also invested in beverage brands like Oatly and Bai.
Last summer, multiple class-action lawsuits were filed against the brand by consumers who said its products don’t improve gut health as much as their marketing suggests.
Poppi denied those claims, and noted that it removed references to "gut health" from its packaging in late 2023. But according to a court filing last week, Poppi has agreed to a settlement that includes an $8.9 million fund for payments to consumers. A hearing on the settlement is scheduled for May 8.
On it’s website, Poppi define the beverage as a "modern soda that combines 5g sugar, ingredients you can love and prebiotics to give you allllll the soda feels without the baggage."
Coca-Cola jumps into prebiotic soda space
Dig deeper:
Meanwhile, PepsiCo rival Coca-Cola is also jumping into the space by launching its own prebiotic soda to keep up with trendy "gut-healthy" sodas.
Simply Pop launched last month on the West Coast, in the Southeast and online via Amazon Fresh after the company discovered that "wellness-focused Gen Z-ers and millennials were really interested in juice and prebiotic sodas," Becca Kerr, Coca-Cola's CEO of nutrition, said in a statement.
The prebiotic soda market is expected to be valued at $54.5 million by 2034, according to Future Market Insights.
The Source: This story was reported from Los Angeles. The Associated Press, FOX Business contributed.