PepsiCo buys Poppi for $1.95 Billion: Expanding into the healthier soda market
PepsiCo is set to acquire Poppi, a leading prebiotic soda brand, for $1.95 billion. This acquisition helps PepsiCo tap into the growing healthy soda category amidst declining demand for traditional drinks. Learn more about this strategic move and what it means for the beverage industry in 2025.
In a move to diversify and strengthen its portfolio, PepsiCo (PEP.O) has announced its acquisition of Poppi, a fast-growing prebiotic soda brand, for a significant $1.95 billion. This strategic acquisition will allow PepsiCo to gain a strong foothold in the booming "healthier soda" segment, which is gaining traction as consumer preferences shift toward gut-health-focused beverages.
Poppi was created by Allison and Stephen Ellsworth and discovered on Shark Tank by Rohan Oza. Photo: PepsiCo
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Poppi's rising popularity in the U.S.: The growing shift toward healthier beverages
Poppi's rising popularity comes at a time when young Americans are increasingly turning to health-conscious drink options. Prebiotic sodas, which are known for their gut-health benefits, have emerged as a leading category within the carbonated drinks segment (CSD). This shift is part of a larger movement toward fitness and wellness products, with consumers seeking functional beverages that offer both refreshment and health benefits.
PepsiCo’s acquisition of Poppi comes as part of a broader industry trend. Rival Coca-Cola (KO) has recently expanded its "Simply" brand to introduce a prebiotic soda called "Simply Pop." Other competitors like Celsius Holdings (CELH) and Keurig Dr Pepper (KDP) are also making moves to capture a share of the growing market by acquiring smaller wellness drink brands
Poppi: A Brand Built on Gut Health and Natural Ingredients
Founded in Austin, Texas, Poppi offers a unique blend of prebiotics, fruit juice, and apple cider vinegar to create low-calorie sodas with a maximum of just five grams of sugar per serving. This focus on healthy ingredients has helped Poppi carve out a niche in the crowded soda market. As of February 22, 2025, the brand’s retail sales surged by 122% year-over-year, and it now holds approximately 1% of the total carbonated soft drink market in the U.S.
Poppi’s rebranding in 2020 from its original name, "Mother," and its appearance on "Shark Tank" in 2018 helped accelerate its growth. Co-founders Stephen and Allison Ellsworth, along with investor Rohan Oza, gained crucial backing to propel the brand into the spotlight.
The Poppi deal: A smart business move
The deal includes $300 million in anticipated cash tax benefits, effectively lowering the net purchase price to $1.65 billion. As traditional sodas face declining sales and increased competition from brands like Coca-Cola and Keurig Dr Pepper, PepsiCo aims to strengthen its carbonated soft drinks (CSD) portfolio with a focus on wellness-oriented options.
According to J.P. Morgan analyst Andrea Teixeira, this acquisition is a strategic move for PepsiCo to recover market share from its competitors and position itself as a leader in the "healthier soda" category.