PepsiCo buys Poppi, the soda that was born on Shark Tank

Poppi is a functional carbonated beverage that will be acquired by PepsiCo to join the portfolio of this industry giant.

According to its creators, Poppi is made with natural ingredients, including prebiotic fiber from yucca root and agave, apple cider vinegar, fruit juice, and sugar. It is marketed as a healthier alternative to traditional sodas, as it contains less than 5 grams of sugar and fewer than 35 calories per can, according to information on its website.

The product gained notoriety in 2018 when its founders, Allison and Stephen Ellsworth, participated in the show “Shark Tank” and received a $400,000 investment for 25% of the company from guest investor Rohan Oza. Originally known as Mother Beverage, the brand was rebranded as Poppi and began expanding into supermarkets such as Whole Foods Market.

With eye-catching packaging and a marketing strategy focused on gut health, Poppi has captured the attention of consumers and celebrities like Post Malone, Hailey Bieber, Kylie Jenner, Billie Eilish, Russell Westbrook, Jennifer Lopez, and Olivia Munn.

Why did PepsiCo buy Poppi?

2024 was a key year for the growth of the functional beverage market. According to data from retailer FreshDirect, sales of this type of product have increased by more than 60% compared to the previous year, with brands like Olipop and Poppi leading the trends.

In response to this market evolution, PepsiCo announced that it has reached an agreement to acquire Poppi for $1.95 billion. The company has not disclosed the exact date the purchase will be finalized but assured that this acquisition will allow it to “evolve its portfolio” and expand its offering of healthier products.

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“PepsiCo, Inc. (NASDAQ: PEP) (“PepsiCo”) today announced the signing of a definitive agreement to acquire Poppi, a fast-growing prebiotic soda brand, for $1.95 billion, including $300 million in anticipated tax benefits, for a net purchase price of $1.65 billion. The transaction also includes a potential earn-out consideration, subject to the achievement of certain performance milestones within a specific timeframe following the transaction’s closure,” the brand announced in a statement.

PepsiCo’s strategy in recent years has focused on acquiring brands with a wellness and nutrition image. In 2023, the company acquired Siete Foods for $1.2 billion and later purchased the remaining 50% of Sabra Dipping and PepsiCo-Strauss Fresh Dips & Spreads International GmbH.

PepsiCo CEO Ramón Laguarta explained in an investor conference that “there is a greater level of awareness among American consumers regarding health and wellness,” which has driven the expansion of such products in its portfolio.

Poppi, the class-action lawsuit

Despite its success, Poppi faced a lawsuit in June 2023 filed by Kristen Cobbs in San Francisco against VNGR Beverage LLC, the Texas-based company that manufactures and markets the drink.

The class-action lawsuit claims that each can of Poppi contains only 2 grams of prebiotic fiber, meaning that “a consumer would need to drink more than four cans per day to obtain significant gut health benefits.” Additionally, it argues that the high sugar content in the drink negates the supposed digestive benefits.

In response, Poppi stated that the lawsuit is baseless and that it will continue to defend its product.

How healthy is Poppi soda?

Poppi’s proposition as a healthier alternative to traditional sodas is based on its low-calorie content and the inclusion of ingredients such as prebiotic fiber and apple cider vinegar, which have been associated with gut health benefits.

However, the lawsuit against it has raised doubts about whether the amount of fiber in the product is sufficient to provide real digestive benefits. According to experts, a person needs between 25 and 30 grams of fiber per day to maintain good gut health, so consuming multiple cans of Poppi to reach this goal could be counterproductive due to its sugar content.

Still, the beverage has been well received by those looking for a more natural and refreshing option without the artificial ingredients of conventional sodas.

Where to buy Poppi in Mexico?

So far, Poppi’s distribution has been focused in the United States, where it is available in chains such as Whole Foods, Target, and Walmart, as well as online stores like Amazon and FreshDirect.

However, in Mexico, the drink can be purchased in supermarkets or convenience stores such as Chedraui and Costco, as well as through platforms like Mercado Libre and Amazon Mexico. With PepsiCo’s acquisition, Poppi may reach more points of sale in the country in the coming months.

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