PepsiCo to Acquire Poppi for $1.95 Billion Amid Health Trend

PLANO, Texas — PepsiCo announced on March 17, 2025, that it will acquire the prebiotic soda brand Poppi for $1.95 billion as part of a strategy to meet consumer demand for healthier beverage options. The deal includes $300 million in anticipated cash tax benefits, making the effective purchase price $1.65 billion.

Ramon Laguarta, PepsiCo’s chairman and CEO, stated, “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.” The acquisition underscores PepsiCo’s ongoing efforts to evolve its beverage portfolio, particularly in light of declining sales in traditional sugary soft drinks.

Founded by Austin, Texas, couple Stephen and Allison Ellsworth, Poppi initially gained popularity after appearing on the reality show “Shark Tank” in 2018. After receiving an investment from entrepreneur Rohan Oza, the brand launched a line of low-calorie sodas combining prebiotics, fruit juices, and apple cider vinegar, containing no more than five grams of sugar per serving.

Poppi’s impressive growth has put it at the forefront of the functional beverage market. The company reported $500 million in sales last year and holds about a 1% market share in the carbonated soft drink category, as indicated by industry analysis. During this time, retail sales for Poppi surged 122% year-over-year, according to BNP Paribas.

Laguarta emphasized the importance of this acquisition, noting that consumer interest in health is at an all-time high. He stated, “This acquisition reflects our commitment to meeting growing demand for healthier options and marks an important step in our portfolio transformation efforts.”

The prebiotic soda market is expected to grow significantly, with projections valuing it at $54.5 million by 2034, highlighting a shift in consumer preferences toward beverages with health benefits. This trend has prompted PepsiCo to strategically acquire brands like Poppi, rather than develop new products internally. An earlier attempt to launch a health-focused soda under the name Soulboost was scrapped due to market concerns.

Industry analysts, including JPMorgan’s Andrea Teixeira, noted that the purchase solidifies PepsiCo’s presence in the health-focused beverage segment: “The deal helps establish a foothold in the fast-growing ‘modern’ soda category, especially as traditional carbonated soft drinks lose market share to competitors like Coca-Cola and Keurig Dr Pepper.”

In a competitive shift, Coca-Cola has recently launched its own prebiotic soda under the Simply brand, reflecting the industry’s pivot toward gut health products. The alignment among beverage giants toward healthier options offers insights into the changing landscape of consumer choices.

Poppi’s diverse flavor offerings, including Orange Cream, Root Beer, and Cherry Limeade, have resonated particularly with health-conscious millennials and Gen Z consumers. Despite facing scrutiny over its health claims, including a class-action lawsuit alleging the drink is “basically sugared water,” Poppi’s aggressive marketing and partnerships with social media influencers have significantly boosted its visibility.

As PepsiCo integrates Poppi into its portfolio, stakeholders are keenly observing how this move will shape the dynamics of the health-conscious beverage market. This acquisition not only signifies a lucrative opportunity for PepsiCo but also aligns with its broader aim to adapt to evolving consumer trends favoring wellness-oriented products.