PepsiCo Buys Poppi as Healthy Soda Segment Continues To Climb

Unlike Coca-Cola, which formulated and released its own prebiotic soda called Simply Pop, PepsiCo is just buying one — Poppi. The beverage giant is acquiring the brand for $1.65 billion, with an additional $300 million in cash tax benefits.

Reportedly, Pepsi initially took the Coca-Cola route and began the development of its own functional soda under its Soulboost brand. Yet, with Pepsi buying Poppi, that plan is now abandoned, according to Bloomberg.

Getting into the “better-for-you” beverages game is likely a smart move for PepsiCo. Consumers, especially millennials, have been shifting away from traditionally unhealthy, high-sugar sodas. When functional beverage brands Poppi and Olipop hit the market several years ago, consumers could not get enough, and grocery stores expanded shelf space for the category.

“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 Ramon Laguarta, CEO of PepsiCo, per CNN “Poppi is a great complement to our portfolio transformation efforts to meet these needs.”

The Rise of Poppi and Healthy Soda

Created by Allison and Stephen Ellsworth, Poppi hit the market in 2018 as an alternative, low-calorie soda. The beverage made an appearance on “Shark Tank” that same year. Flavored with fruit juices and packaged in colorful cans, the brand topped $100 million in sales five years later.

“We can’t wait to begin this next chapter with PepsiCo to bring our soda to more people — and I know they will honor what makes Poppi so special while supporting our next phase of growth and innovation,” said Allison Ellsworth, per AP News.

However, Poppi has seen some controversy. The company was sued for allegedly exaggerating the soda’s health claims, and it settled the suit for nearly $9 million and removed “gut health” from can labels.

Rival Olipop was launched the same year as Poppi. Similar prebiotic sodas have popped up from competitors Spindrift Soda and Bloom Nutrition as well.

After years of watching the category grow, both Coca-Cola and Pepsi are finally ready to get into the functional soda game. According to CNBC, both beverage giants tried to acquire Olipop in 2023, but neither were able to make a deal. Now, Coca-Cola has Simply Pop, while PepsiCo will soon own Poppi, pending regulatory approval.

The healthy soda category still has quite a bit of room to grow. With the traditional soda market worth billions, the functional beverage segment is estimated to be worth around $440 million. Yet, sales are expected to reach roughly $2 billion by 2030.