PepsiCo announced on Monday (March 17) that it is acquiring Austin-based prebiotic soda brand Poppi for $1.95 billion.
According to Reuters, PepsiCo agreed to buy Poppi for $1.95 billion, though tax benefits are expected to lower the net cost to $1.65 billion.
PepsiCo Chairman and CEO Ramon Laguarta said in a statement that Poppi’s focus on health and wellness aligns with modern-day consumer preferences, which allows PepsiCo to give its customers more choices.
“We’ve been evolving our food and beverage portfolio over many years, including by innovating with our brands in new spaces and through disciplined, strategic acquisitions that enable us to offer more positive choices to our consumers,” Laguarta said.
“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.”
The functional soda category has been increasingly popular among young, health-Americans, with beverages offering ingredients like apple cider vinegar, prebiotics and less than five grams of sugar.
Coca-Cola recently launched its own prebiotic brand, Simply Pop.
Allison Ellsworth, the co-founder of Poppi, said the combination with PepsiCo will expand Poppi’s reach.
“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,” she said in a statement.
Ellsworth founded the brand – then known as Mother Beverage – in her kitchen in 2015 because she loved soda but was tired of the way it made her feel. She mixed various Dalla fruit juices with apple cider vinegar, sparkling water and prebiotics and sold the drink at farmer’s markets.
Poppi gained national attention in 2018 when Ellsworth and her husband, Stephen, appeared on Shark Tank and caught the eye of Rohan Oza, the investor behind Bai, Oatly, Vita Coco, and Vitamin Water.
Oza offered them $400,000 in exchange for a 25% stake in the company. The couple accepted the deal and rebranded Mother Beverage into Poppi, giving the brand its signature bold and brightly colored fruit-forward cans.
Today, Poppi prebiotic soda can be found in 120 major retailers across the U.S., including Costco, Target, and Whole Foods, in over 36,000 locations. The brand offers 14 flavors, including Cherry Limeade, Classic Cola, Doc Pop, Ginger Lime, and Root Beer.
“We’re beyond thrilled to be partnering with PepsiCo so that even more consumers across America, and the world, can enjoy Poppi,” said Oza, the co-founder CAVU Consumer Partners.
Despite Poppi’s success, the brand faced legal trouble last summer. A class-action lawsuit filed in June 2024 in California accused Poppi of falsely advertising the health benefits of its soda.
The lawsuit alleged that consumers would have to drink at least four cans of soda to see any prebiotic benefit, and by that point, the total sugar intake would negate any positive health effects.
Poppi denied the claims and noted that it removed references to “gut health” from its packaging late in 2023.
But according to a court filing obtained by AP News last week, the prebiotic soda brand has agreed to a settlement that includes an $8.9 million fund for payments to consumers. A hearing on the settlement is scheduled for May 8.
PepsiCo shares rose nearly 2% in morning trading Monday.
