PepsiCo in talks to acquire healthier soda brand Poppi

USA – PepsiCo has entered into a definitive agreement to acquire poppi, a fast-growing prebiotic soda brand, for US$1.95 billion, including US$300 million of anticipated cash tax benefits for a net purchase price of US$1.65 billion.

The transaction also includes an additional potential earnout consideration subject to the achievement of certain performance milestones within a specified period after closing of the transaction.

Poppi, based in Austin, Texas, was founded by husband-and-wife duo Stephen and Allison Ellsworth. The brand has gained popularity for its low-calorie, low-sugar sodas, which contain prebiotics.  

Currently, Poppi’s 15 flavors are available in major U.S. retailers, including Kroger, Walmart, Costco, Target, and Whole Foods Market. 

“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,” said Ramon Laguarta, Chairman and CEO, PepsiCo.

“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.”

The transaction is subject to customary closing conditions, including regulatory approval. Additional terms of the acquisition were not disclosed.

The potential acquisition follows reports last year that The Coca-Cola Company had also considered purchasing Poppi.  

Coca-Cola has since launched its own prebiotic soda brand, Simply Pop, targeting the same functional beverage market.  

Simply Pop was introduced in select U.S. regions and on Amazon, positioning itself against brands like Poppi and Olipop. 

Olipop, another major player in the prebiotic soda segment, was recently valued at US$1.85 billion after securing US$50 million in a Series C funding round led by JP Morgan Private Capital’s Growth Equity Partners.  

The brand, which became profitable in early 2024, had previously projected US$500 million in revenue for the year but reported over US$400 million in sales instead. Despite missing its target, Olipop remains one of the fastest-growing beverage brands in the U.S. 

JP Morgan Growth Equity Partners managing partner Christopher Dawe described Olipop as “one of the fastest-growing beverage companies to reach this scale,” while CEO Ben Goodwin called the valuation “staggering and thrilling” after just five to six years in the market. 

PepsiCo’s interest in Poppi comes amid broader expansion efforts, particularly in India, where the company aims to double its revenue over the next five years.  

India is now among PepsiCo’s top three global markets, experiencing double-digit growth, according to Jagrut Kotecha, CEO of PepsiCo India & South Asia. 

To support its ambitions, PepsiCo has heavily invested in the country, setting up new manufacturing plants in Uttar Pradesh and Assam, with additional facilities in the pipeline.  

Over the past three years, the company has committed nearly Rs 4,000 crore (US$458 million) to expanding its Indian operations. 

India’s beverage market, valued at approximately $12 billion, is growing at a compound annual rate of 10-11%, attracting new competitors such as Reliance’s Campa Cola, which is disrupting the industry with aggressive pricing. 

Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.