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PepsiCo is making a big move into the functional beverage space, announcing its $1.65 billion acquisition of Poppi, the buzzy prebiotic soda brand. With an additional $300 million in expected tax benefits, the total deal value reaches $1.95 billion—a strong signal that Pepsi is betting on gut health as the future of soda.
From “Shark Tank” to Soda Superstardom
Poppi, founded in 2015 by husband-and-wife duo Allison and Stephen Ellsworth in Austin, Texas, has grown into a powerhouse in the better-for-you beverage market. The couple initially launched their brand as Mother Beverage, using apple cider vinegar as a key ingredient. But after securing an investment from Shark Tank’s Rohan Oza in 2018, they rebranded to Poppi and skyrocketed to mainstream success.
Poppi’s appeal? A low-sugar, gut-friendly soda packed with prebiotics and fruit juice, offering a health-conscious alternative to traditional soft drinks. It quickly gained shelf space in major retailers like Target and Whole Foods, riding the wave of consumer demand for functional drinks.
PepsiCo’s Push for Healthier Options
This acquisition isn’t just about soda—it’s about where the industry is heading. As consumers move away from sugary drinks, PepsiCo has been aggressively expanding its lineup of better-for-you beverages. CEO Ramon Laguarta stated, “More than ever, consumers want drinks that fit their lifestyle and wellness goals.”
PepsiCo, which already had a minority stake in Poppi through its venture arm, is now doubling down, integrating the brand into its portfolio alongside other health-focused drinks like Bubly and Kevita.
Challenges and Controversy
Poppi’s meteoric rise hasn’t been without bumps. The brand recently settled an $8.9 million class-action lawsuit over claims that its sodas improve digestion and gut health. The lawsuit alleged misleading marketing, a challenge many functional brands face as regulations around health claims tighten.
Despite the controversy, PepsiCo’s stock jumped nearly 2% following the announcement, reflecting investor confidence in the deal.
A Turning Point for Soda?
With this acquisition, PepsiCo is sending a clear message: the future of soda isn’t just about taste—it’s about function. But will Poppi’s momentum continue under PepsiCo’s umbrella, or will it lose its indie brand appeal?
One thing is clear: The soda industry is bubbling up with change.