PepsiCo Finalizes $1.5 Billion Acquisition of Health-Focused Soda Brand Poppi

PepsiCo is nearing a $1.5 billion deal to acquire the health-focused soda brand Poppi.

PepsiCo Inc. is in advanced negotiations to acquire the healthier soda brand Poppi, according to sources familiar with the situation. The Purchase, New York-based beverage company may announce the deal as early as next week, as one source, who wished to remain anonymous due to the confidential nature of the discussions, indicated that the proposed purchase price exceeds $1.5 billion.

Initially, PepsiCo intended to introduce its own functional soda called Soulboost but opted to abandon the project after early signs suggested it would not be successful.

Although the negotiations are at an advanced stage, there is still a possibility of delays, according to the sources. A PepsiCo representative declined to comment, and a spokesperson for Poppi did not respond to requests for comment.

The functional soda market is expanding rapidly, particularly in comparison to traditional sodas. These lower-sugar drinks often contain unique ingredients like prebiotics, probiotics, and added fiber, promoting digestive health.

Loan Heilner, merchandising director at FreshDirect, a New York-based grocery store, noted that functional beverages are experiencing significant growth, with sales increasing over 60% from the previous year, driven by brands such as Olipop and Poppi. In contrast, sales of major soda brands have only seen a slight increase. Coca-Cola Co. has recently introduced its own prebiotic soda, Simply Pop.

Poppi, based in Austin, was co-founded by Allison and Stephen Ellsworth. The brand gained attention in 2018 when it appeared on the television show Shark Tank, where it received an investment from Rohan Oza of Cavu Venture Partners. The company has also attracted support from various celebrities, including Nicole Scherzinger and Ellie Goulding.

PepsiCo has recently focused on acquiring brands that promote healthier options. In October, the company revealed its intention to purchase Siete Foods for $1.2 billion. The subsequent month, it announced plans to acquire the remaining 50% stake in both Sabra Dipping Co. and PepsiCo-Strauss Fresh Dips & Spreads International GmbH.

During a conference call with investors in February, Chief Executive Officer Ramon Laguarta noted, “American consumers are increasingly aware of health and wellness.”