PepsiCo has announced the acquisition of prebiotic soda brand Poppi for $1.95 billion, expanding its presence in the functional beverage category. The transaction includes $300 million of anticipated cash benefits, bringing the net purchase price to $1.65 billion.
Poppi was founded in 2015 by Allison Ellsworth in her kitchen, initially known as Mother Beverage, as a healthier alternative to traditional soda. The brand gained popularity after appearing on “Shark Tank” in 2018 and underwent a rebrand, becoming Poppi with brightly-colored, fruit-forward cans.
While facing class-action lawsuits regarding claims of its products not improving gut health as marketed, Poppi has agreed to a settlement including an $8.9 million fund for consumer payments. The brand has also removed references to “gut health” from its packaging.
Allison Ellsworth expressed excitement about the partnership with PepsiCo, stating that it will help expand Poppi’s reach and continue its growth and innovation. Rohan Oza, an investor in Poppi and co-founder of CAVU Consumer Partners, welcomed the partnership with PepsiCo, aiming to make Poppi available to more consumers.
PepsiCo Chairman and CEO Ramon Laguarta highlighted the increasing consumer interest in health and wellness as a driving factor behind the acquisition, aiming to provide convenient and great-tasting beverage options. PepsiCo shares rose nearly 2% following the announcement of the acquisition.
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