Poppi, a popular prebiotic soda brand, is now under the ownership of PepsiCo. This deal, valued at nearly $2 billion, is a significant move in the soda industry. It is a clear sign that big soda companies are shifting their focus towards healthier options.  The acquisition is part of a broader trend where traditional soda giants are looking to capitalize on the growing demand for healthier beverages.  This trend has been driven by new brands like Poppi and Olipop, which have gained a loyal following among health-conscious consumers over the past five years.

The soda industry has seen a decline in consumption over the last two decades.  This decline has opened up opportunities for innovative brands to capture market share.  Prebiotic sodas, in particular, have become a hot commodity.  These sodas offer a healthier alternative to traditional sugary drinks.  They contain beneficial ingredients like apple cider vinegar and prebiotics, which support gut health.  Poppi's formula, for instance, includes these ingredients and only five grams of sugar per serving.

PepsiCo's acquisition of Poppi is a strategic move to stay competitive in a changing market.  The company had initially planned to launch its own functional soda under the Soulboost brand.  However, these plans were scrapped, likely to make way for the Poppi deal.  The acquisition is expected to cost PepsiCo $1. 95 billion, with an additional $300 million in anticipated cash tax benefits.  This brings the net purchase price down to $1. 65 billion.  Furthermore, PepsiCo will have to make additional payments if Poppi meets certain performance milestones post-acquisition.

Poppi's founders, Allison and Stephen Ellsworth, launched the brand in 2018.  The same year saw the launch of another prebiotic soda brand, Olipop.  Both brands have seen remarkable growth.  By 2023, Poppi's annual sales had surpassed $100 million.  This success has not come without challenges.  Poppi has faced backlash over its health claims, leading to a class-action lawsuit.  The lawsuit alleged that Poppi's drinks were not as healthy as advertised.  The company recently settled the suit for $8. 9 million.  Despite this setback, Poppi continues to expand its reach.  The brand made its second straight Super Bowl appearance with an ad during the big game.  This move shows Poppi's ambition to reach an even wider audience.

Rival Olipop has also seen significant success.  The brand was valued at $1. 85 billion during its latest funding round in February.  Olipop's founder and CEO, Ben Goodwin, revealed that soda giants like PepsiCo and Coca-Cola had expressed interest in acquiring the brand.  This interest highlights the growing appeal of prebiotic sodas in the market.  As the soda industry continues to evolve, it will be interesting to see how these healthier options shape the future of beverages.

The Big Soda Buyout: PepsiCo's $2 Billion Bet on Poppi

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