In a landmark acquisition shaking up the beverage industry, PepsiCo has announced its purchase of prebiotic soda brand Poppi for a staggering $1.95 billion, with a net purchase price of $1.65 billion after anticipated tax benefits. The deal, announced on March 17, 2025, represents a strategic pivot for PepsiCo as they race to capture market share in the rapidly expanding functional beverage sector. This acquisition marks a significant step in PepsiCo’s portfolio evolution, as the company aims to meet growing consumer demand for healthier alternatives to traditional sodas. With regulatory approval pending and additional performance-based earnouts possible, this transaction signals PepsiCo’s strongest commitment yet to the health and wellness beverage category.
The Rise of Poppi: From Shark Tank to Billion-Dollar Brand
Founded in 2018 by the entrepreneurial husband-and-wife team Allison and Stephen Ellsworth, Poppi has quickly transformed from a kitchen experiment to a revolutionary beverage industry player. The Austin, Texas-based company made its national debut on Shark Tank that same year, where it caught the attention of Guest Shark Rohan Oza, who recognized its potential in the better-for-you beverage space. That television appearance proved pivotal, catapulting the brand into the spotlight and setting it on an explosive growth trajectory.
What sets Poppi apart from traditional sodas is its unique formulation built around apple cider vinegar, which delivers prebiotic benefits while maintaining a delicious flavor profile. The brand currently offers 14 different flavors, including crowd favorites like Strawberry Lemon and their nostalgic Classic Cola. Each can contains 25 calories or less and no more than 5 grams of sugar per serving, positioning it perfectly for health-conscious consumers.
By 2024, Poppi had achieved remarkable annual sales of $500 million, demonstrating the brand’s strong resonance with consumers seeking healthier alternatives. This impressive growth caught the attention of major beverage companies, with PepsiCo ultimately securing the deal after recognizing Poppi’s unique market position and rapid expansion. The acquisition price reflects Poppi’s status as one of the fastest-growing functional beverage brands in recent history.
PepsiCo’s Strategic Shift Toward Health and Wellness
This acquisition represents much more than just adding another brand to PepsiCo’s portfolio—it signals a fundamental strategic transformation. Under their pep+ (PepsiCo Positive) initiative, the company has been gradually pivoting toward healthier options that align with changing consumer preferences. The Poppi acquisition accelerates this transition, giving PepsiCo an established position in the functional beverage category without having to build a brand from scratch.
Interestingly, PepsiCo had previously been developing its own better-for-you soda brand called Soulboost, but the Poppi acquisition effectively replaces those plans. The company clearly recognized the value in acquiring an established brand with proven market success rather than launching a new competitor. This move demonstrates PepsiCo’s willingness to invest significantly in meeting the demands of health-conscious consumers rather than trying to convert them back to traditional sodas.
The integration of Poppi into PepsiCo’s distribution network will likely lead to expanded retail availability and production capacity. With PepsiCo’s massive global reach and infrastructure, Poppi will have the opportunity to scale much more rapidly than it could have as an independent company. This combination of Poppi’s innovative product with PepsiCo’s distribution power creates a formidable offering in the functional beverage space.
Functional Beverages: The Next Frontier in Drinks
The functional beverage market has been experiencing explosive growth in recent years, driven by consumers increasingly looking for drinks that offer more than just hydration or flavor. These products promise specific health benefits—whether digestive health, energy, immune support, or other functional claims—while still delivering an enjoyable taste experience. Prebiotic sodas like Poppi represent one of the fastest-growing segments within this category.
This trend hasn’t gone unnoticed by major players. Coca-Cola recently entered the prebiotic soda market with its Simply Pop product line, highlighting the significance of this emerging category. The competition between these beverage giants will likely accelerate innovation and consumer awareness of functional beverages overall. As someone who frequently explores new flavored drinks, I’ve noticed significant shelf space now dedicated to functional beverages like ROAR Organic in grocery stores.
It’s worth noting that Poppi faced some challenges related to its health claims. In 2024, the company settled a lawsuit for $9 million regarding certain marketing claims about the product’s health benefits. This settlement underscores the competitive and regulatory complexity of the functional beverage landscape, where companies must carefully balance marketing appeal with scientific substantiation of health claims.
The continued growth of brands like Poppi indicates consumers are increasingly prioritizing gut health and looking for products with reduced sugar alternatives. As this category evolves, we can expect to see more innovation in ingredients, flavors, and functional benefits. The acquisition positions PepsiCo to be at the forefront of this transformation rather than playing catch-up to newer, more agile brands.
Celebrity Power: Amplifying Poppi’s Brand Appeal
A significant factor in Poppi’s rapid growth has been its strategic celebrity partnerships. The brand has successfully collaborated with influential figures like Post Malone, Hailey Bieber, and Kylie Jenner, leveraging their massive social media followings to introduce Poppi to new audiences. These endorsements have played a crucial role in positioning Poppi as a trendy, must-have beverage among younger demographics.
Celebrity influence in the beverage industry isn’t new, but Poppi has been particularly effective at selecting partners whose personal brands align with their health-focused messaging. These endorsements have helped Poppi transcend the typical health beverage category to become a lifestyle brand with broader appeal. The influencer marketing strategy has contributed significantly to Poppi’s ability to reach consumers who might not typically shop in the health food section.
With PepsiCo’s marketing resources now behind them, Poppi may expand these celebrity collaborations even further. The combination of Poppi’s existing brand equity with PepsiCo’s marketing expertise and budget could create even more impactful campaigns moving forward. This acquisition puts Poppi in a position to potentially outpace competitors through increased marketing reach while maintaining its authentic health-focused messaging.
What This Means for the Future of Beverages
The Poppi acquisition signals a significant shift in the beverage landscape, with major implications for the industry’s future. PepsiCo’s substantial investment validates the staying power of functional beverages rather than dismissing them as a passing trend. This recognition from one of the world’s largest beverage companies suggests we’ll see continued innovation and expansion in the better-for-you drink space.
Ramon Laguarta, Chairman and CEO of PepsiCo, emphasized this perspective: “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.” This executive insight confirms PepsiCo’s commitment to evolving alongside consumer preferences rather than resisting change.
Similarly, Rohan Oza, Guest Shark and Co-Founder at CAVU Consumer Partners, expressed enthusiasm about the deal’s global implications: “We’re beyond thrilled to be partnering with PepsiCo so that even more consumers across America, and the world, can enjoy Poppi – a truly modern soda for the next generation of drinkers.” This global expansion potential represents a significant opportunity for the prebiotic soda category.
This acquisition reflects broader healthy eating trends extending beyond beverages into snacking and food generally. As consumers increasingly seek better-for-you options across their entire diet, companies like PepsiCo are strategically positioning themselves for this evolving marketplace. The interest in gut health specifically continues to grow, with prebiotic and probiotic products gaining popularity across food and beverage categories.
For those of us who love exploring innovative food and beverage options, this acquisition promises more accessible functional beverages reaching mainstream retail channels. The deal may also inspire more entrepreneurs to develop products that combine health benefits with enjoyable taste experiences. The future of beverages appears increasingly focused on functional benefits, with major companies and startups alike racing to meet consumer demand for drinks that do more than just taste good.
As PepsiCo integrates Poppi into its portfolio, the beverage giant gains a valuable foothold in a growing category while Poppi secures the resources needed for global expansion. For consumers, this partnership likely means greater access to healthier soda alternatives wherever PepsiCo products are sold. The intersection of taste, function, and health will continue driving beverage innovation in the coming years, with prebiotic sodas like Poppi leading this exciting transformation.