PepsiCo Acquires Poppi for $1.95 Billion

On March 17, 2025, PepsiCo announced a definitive agreement to acquire Poppi, a rapidly growing prebiotic soda brand, for $1.95 billion, including $300 million in anticipated cash tax benefits, resulting in a net purchase price of $1.65 billion. This strategic acquisition aims to bolster PepsiCo's presence in the burgeoning functional beverage market, aligning with the company's commitment to offering healthier product options.​

About the Companies

PepsiCo, headquartered in Purchase, New York, is a global food and beverage leader with a diverse portfolio that includes iconic brands such as Pepsi, Lay's, Gatorade, and Quaker Oats. The company has been actively evolving its offerings to meet changing consumer preferences, focusing on health and wellness trends. Recent strategic moves include the acquisition of Siete Foods in October 2024 for $1.2 billion, enhancing its better-for-you snack options. ​

Poppi, founded in 2015 by Allison and Stephen Ellsworth in Austin, Texas, is known for its innovative prebiotic sodas that combine fruit juices, apple cider vinegar, and prebiotics to promote gut health. The brand gained significant attention after a successful appearance on the television show "Shark Tank" in 2018, where it secured investment from Rohan Oza. Since then, Poppi has expanded rapidly, offering 14 flavours and achieving over $100 million in annual sales by 2023. ​

Strategic Rationale

PepsiCo's acquisition of Poppi is driven by several strategic objectives:​

Expanding Health-Focused Portfolio: As consumers increasingly seek healthier beverage options, integrating Poppi allows PepsiCo to offer products that cater to this demand, enhancing its better-for-you portfolio. ​

Accelerating Growth in Functional Beverages: The functional beverage market, particularly prebiotic sodas, is experiencing rapid growth. Poppi's established brand and innovative products position PepsiCo to capitalise on this trend.

Leveraging Digital Marketing Expertise: Poppi's success has been partly attributed to its effective use of social media platforms like TikTok for marketing. PepsiCo can leverage this expertise to enhance its digital marketing strategies. ​

Enhancing Distribution and Retail Presence: With Poppi's products already available in major retailers such as Target, Kroger, and Whole Foods, PepsiCo can utilise its extensive distribution network to further expand Poppi's market reach. ​

Potential Challenges

Despite the strategic benefits, PepsiCo may face several challenges:

Maintaining Brand Authenticity: Ensuring that Poppi retains its brand identity and loyal customer base during integration into a large corporation will be crucial.​

Addressing Legal Issues: Poppi has faced class-action lawsuits regarding its health benefit claims, resulting in an $8.9 million settlement. PepsiCo will need to manage and mitigate any ongoing or future legal challenges. ​

Navigating Market Competition: The functional beverage market is becoming increasingly competitive, with other major players like Coca-Cola launching similar products. PepsiCo must differentiate Poppi to maintain a competitive edge. ​

Financial Times

Conclusion

PepsiCo's acquisition of Poppi represents a strategic effort to align with evolving consumer preferences toward health and wellness. By integrating Poppi's innovative products and leveraging its strong brand appeal, PepsiCo aims to strengthen its position in the functional beverage market. However, careful attention to brand integration, legal considerations, and market dynamics will be essential to fully realise the potential of this acquisition

Written By: Ben Harris

Sources: PepsiCo, Yahoo Finance, Financial Times, Fox4, AP News, Poppi