PepsiCo announced that it is acquiring prebiotic soda brand Poppi for nearly $2 billion, including anticipated cash tax benefits. The growing popularity of prebiotic sodas, led by newcomers like Poppi and Olipop, has attracted health-conscious consumers in recent years. Pepsi’s rival Coca-Cola has also entered the prebiotic soda market with its brand Simply Pop.
Poppi, founded in 2018 by Allison and Stephen Ellsworth, offers a formula that includes apple cider vinegar, prebiotics, and low sugar content. Despite its increasing popularity and successful Super Bowl ad, Poppi has faced criticism for its health claims and is currently in talks to settle a lawsuit over the matter.
Olipop, another player in the prebiotic soda market, was valued at $1.85 billion in its latest funding round. The company’s CEO has revealed that both PepsiCo and Coca-Cola have shown interest in a potential sale.
The acquisition of Poppi by PepsiCo reflects a strategic move to capitalize on the growth of the prebiotic soda category. The deal is pending regulatory approval, and Pepsi will have to meet certain performance milestones to make additional payments to Poppi. The acquisition signals the competition between beverage giants to tap into the health-conscious consumer market.
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