PepsiCo announced Monday its acquisition of prebiotic soda maker Poppi for $1.95 billion, marking a major expansion into the growing functional beverage market. The net purchase price comes to $1.65 billion after factoring in $300 million in anticipated cash benefits.
The deal brings the rapidly growing Poppi brand under PepsiCo's umbrella as consumers increasingly seek healthier beverage alternatives. "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," said PepsiCo Chairman and CEO Ramon Laguarta.
Poppi's journey began in 2015 when founder Allison Ellsworth started experimenting in her kitchen, mixing fruit juices with apple cider vinegar, sparkling water and prebiotics. Originally called Mother Beverage, the brand gained momentum after appearing on "Shark Tank" in 2018, where investor Rohan Oza backed the company and helped orchestrate its rebranding to Poppi.
The Austin, Texas-based company faced challenges in 2023 when multiple class-action lawsuits questioned its gut health marketing claims. While Poppi denied the allegations, it removed gut health references from packaging and recently agreed to an $8.9 million settlement fund for consumers, pending a May 8 hearing.
"We can't wait to begin this next chapter with PepsiCo to bring our soda to more people," said Ellsworth, expressing confidence that PepsiCo will maintain Poppi's unique identity while supporting its growth plans.
The acquisition boosted investor confidence in PepsiCo, with company shares rising nearly 2% in Monday morning trading.