PepsiCo has struck a deal to buy US prebiotic soda brand Poppi for $1.95bn.
The announcement of the transaction today (17 March) came after Bloomberg reported on Friday the Pepsi Max brand owner was in talks to buy the Texas-based business.
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Poppi, formerly known as Mother Beverage, was set up in 2015 and, after receiving funding on US business reality TV show Shark Tank three years later, relaunched under its current brand in 2020.
Since then, the business, co-founded by Allison Ellsworth and her husband Stephen, has built what has become one of the more recognisable names in the growing market for ‘better-for-you’ sodas in the US.
The transaction includes $300m of anticipated cash tax benefits for a net purchase price of $1.65bn, PepsiCo said.
The deal also features an additional potential “earnout consideration” based on whether certain undisclosed “performance milestones” are reached, the US drinks giant added.
“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. Poppi is a great complement to our portfolio transformation efforts to meet these needs,” PepsiCo chairman and CEO Ramon Laguarta said.
Poppi’s low-calorie, low-sugar sodas come in 15 flavours and are sold in retailers across the US including Kroger, Walmart, Costco, Target and Whole Foods Market. In 2024, the company generated annual sales of “north of $500m”, a Poppi spokesperson said.
Cavu Consumer Partners has been a backer of Poppi since the investment firm’s founder, Rohan Oza, put money into the business on Shark Tank in 2018.
In a statement, Allison Ellsworth said: “We believe Poppi is the soda that will be embraced for generations to come and we’re beyond grateful to the amazing Poppi team, our partners who believed in us from the very beginning and most importantly our incredible community.”
She added: “We can’t wait to begin this next chapter with PepsiCo to bring our soda to more people – and I know they will honour what makes poppi so special while supporting our next phase of growth and innovation.”
Just Drinks asked Poppi to confirm the Ellsworths were staying on with the business and how many staff would move to PepsiCo. The company spokesperson declined to comment.
Last year, Bloomberg reported The Coca-Cola Co. was eyeing a move for Poppi. At the time, Coca-Cola said it did not comment on “market rumours or speculation”.
Last month, Olipop, a local competitor of Poppi, was valued at $1.85bn after raising $50m in a Series C funding round, led by JP Morgan Private Capital’s Growth Equity Partners.
Olipop said the cash injection marked its “final anticipated round of equity financing”, after becoming profitable “in early 2024”.
Olipop CEO Ben Goodwin said: “It’s staggering and thrilling to have achieved a $1.85bn valuation after just five to six short years in market.”
JP Morgan Growth Equity Partners managing partner Christopher Dawe described Olipop as “one of the fastest growing beverage companies to reach this scale”.
Olipop also confirmed that it fell short of its $500m sales target projected in May, generating over $400m in revenue for fiscal year 2024.
In 2023, CNBC quoted Goodwin as saying PepsiCo and Coca-Cola had made an approach about a potential sale.
Last month also saw Coca-Cola introduce its first prebiotic soda line, launching the Simply Pop brand in the US.
Simply Pop, initially set to go on sale “at retail in select regions” and via Amazon, is targeted at a product set that includes brands such as Olipop and Poppi.
The deal for Poppi is the second billion-dollar acquisition PepsiCo has announced in six months.
In October, the Lay’s snacks maker said it had agreed to pay Mexican-American snacks maker Siete Foods for a fee of $1.2bn.
