PepsiCo acquires Poppi, a prebiotic soda brand, to enter the functional drinks market

PepsiCo said Monday it’s acquiring the prebiotic soda brand Poppi for $1.95 billion.

The acquisition gives PepsiCo a fast-growing brand in the popular functional beverage category.

“Consumers are increasingly seeking convenient and delicious options that align with their lifestyles and cater to their growing focus on health and wellness,” stated PepsiCo Chairman and CEO Ramon Laguarta.

PepsiCo said the transaction includes $300 million of anticipated cash benefits, bringing the net purchase price to $1.65 billion.

Allison Ellsworth, the co-founder of Austin, Texas-based Poppi, said the combination with PepsiCo will expand Poppi’s reach.

“We are excited to embark on this new journey with PepsiCo to introduce our soda to a wider audience – and I am confident that they will maintain the unique essence of Poppi while facilitating our expansion and innovation,” expressed Ellsworth in a statement.

Poppi, originally named Mother Beverage, was created by Ellsworth in 2015 in her own kitchen. Her dissatisfaction with traditional soda’s effects led her to experiment with mixing fruit juices, apple cider vinegar, sparkling water, and prebiotics, which she then sold at local 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.

But it hasn’t all been smooth sailing for Poppi. 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.

PepsiCo shares rose nearly 2% in morning trading Monday.