PepsiCo announced Monday that it will acquire prebiotic soda brand Poppi for $1.95 billion as the food and beverage giant seeks to tap into the heightened consumer demand for healthy products.
The deal includes $300 million of anticipated cash tax benefits, making the net purchase price $1.65 billion and is part of Pepsi’s strategy to expand its “better-for-you” offerings.
PepsiCo CEO Ramon Laguarta said in a statement Monday that the company has been evolving its food and beverage portfolio for years by innovating with its brands and “through disciplined, strategic acquisitions that enable us to offer more positive choices to our consumers.”
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Laguarta said now, more than ever, consumers are seeking choices that align with their lifestyles and growing interest in health and wellness. This latest acquisition reflects the company’s commitment to meeting this growing demand for healthier options and underscores its ongoing portfolio transformation efforts.
Poppi, founded by a family in Austin, Texas, is described as a low-calorie soda that combines prebiotics and fruit juice. The company said there is no more than 5 grams of sugar per serving. In the early days, the founders sold the home-brewed concoction at farmers markets before nabbing a hefty investment on the series ABC’s “Shark Tank.” The drink later became available at major retailers nationwide.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PEP | PEPSICO INC. | 148.59 | +0.25 | +0.17% |
Laguarta told analysts on PepsiCo’s earnings call last month that the company recognized how “there’s a higher level of awareness in general of American consumers toward health and wellness.”
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Laguarta noted that this shift is potentially driven by “all the conversation around obesity drugs, but also other conversations that are happening around the space on health and wellness.”
“There is a health and wellness higher level of awareness by consumers, and that’s driving some behaviors that we’re addressing,” he added.
He said that while the company has been focusing on portion control for years, other long-term changes to its portfolio include “lower sodium, lower fat, lower sugar, positive ingredients, plant-based protein, whole grains.”
Meanwhile, PepsiCo rival Coca-Cola is also jumping into the space by launching its own prebiotic soda to keep up with trendy “gut-healthy” sodas.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KO | THE COCA-COLA CO. | 69.16 | +0.05 | +0.07% |
Simply Pop launched last month on the West Coast, in the Southeast and online via Amazon Fresh after the company discovered that “wellness-focused Gen Z-ers and millennials were really interested in juice and prebiotic sodas,” Becca Kerr, Coca-Cola’s CEO of nutrition, said in a statement.
The prebiotic soda market is expected to be valued at $54.5 million by 2034, according to Future Market Insights.
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