PepsiCo has entered the on-trend gut health soda category with the $1.95bn acquisition of Poppi.
Founded in 2018 by husband-and-wife duo Stephen and Allison Ellsworth in Texas under the name Mother Beverage, the business rebranded after an appearance on Shark Tank – the US equivalent of Dragons’ Den – that same year. The founders made a deal with guest shark Rohan Oza, co-founder and managing partner at CAVU Consumer Partners.
Today, Poppi is a fast-growing functional soda brand that combines prebiotics, fruit juice and apple cider vinegar to create a low-calorie soft drink containing no more than five grams of sugar per serving.
PepsiCo said the brand’s “consumer-first approach, cultural cache and nutritional profile” had “nurtured a loyal fanbase and driven rapid growth”.
“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,” added CEO and chairman Ramon Laguarta.
“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.”
Poppi is available in 14 flavours at major retailers nationwide across the US.
The transaction is subject to customary closing conditions, including regulatory approval.
Ram Krishnan, CEO of PepsiCo Beverages US, said: “As we look to reorient our portfolio offerings to address white space consumer needs, the Poppi brand’s unique intersection with wellness and culture is a perfect addition to our portfolio.
“Allison and the Poppi team have built a magnetic brand that’s ahead of the trends, with a loyal consumer base and a demonstrated capacity for growth. We are big fans of the Poppi brand movement and believe this incredible brand paired with our commercial capabilities will drive continued growth and innovation for years to come.”
Allison Ellsworth added: “When I created Poppi in our kitchen, it was fuelled by a desire to create a better-for-you soda.
“We never imagined how many people we could reach through hard work, determination and a clear mission to create a functional soda that stands the test of time. 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. 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. I hope our story inspires others to explore their passions, take the risk, and believe that anything is possible.”
Centerview Partners is acting as lead financial advisor to PepsiCo, with JP Morgan supporting. Cravath, Swaine & Moore is the legal advisor to PepsiCo, while Davis Polk & Wardwell is acting as tax counsel. Goldman Sachs advised Poppi, with Cooley as legal advisor.
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