- PepsiCo is acquiring the prebiotic soda brand Poppi for $1.95 billion.
- The deal includes $300 million in anticipated cash tax benefits.
- Poppi is known for its prebiotic sodas.
- The functional beverage market is projected to reach $62 billion by 2027.
On March 17, 2025, PepsiCo announced its agreement to acquire Poppi, a rising star in the prebiotic soda market, for $1.95 billion. The deal includes $300 million in tax benefits, effectively reducing the acquisition cost to $1.65 billion.
This strategic move underscores PepsiCo’s continued investment in functional beverages, a rapidly expanding sector catering to health-conscious consumers.
Poppi’s Rise in the Beverage Industry
Founded in 2015 by Allison Ellsworth, Poppi started as a homemade solution to gut health issues and quickly gained traction. In 2018, the brand secured funding on Shark Tank, propelling it into the mainstream beverage market. (Express News)
Poppi’s success is fueled by its low-calorie, gut-friendly formula, blending fruit juice, apple cider vinegar, and prebiotics to support digestive health while offering a flavorful alternative to traditional sodas.
PepsiCo’s Expansion into Functional Beverages
The acquisition aligns with PepsiCo’s long-term strategy of diversifying its product offerings in response to shifting consumer preferences.
The functional beverage market, valued at $50 billion in 2022, is projected to grow to $62 billion by 2027, with a 4.5% compound annual growth rate (CAGR). (Glanbia Nutritionals)
PepsiCo has previously invested in healthier beverage alternatives, including its acquisition of SodaStream in 2018 and its expansion into sugar-free and functional drinks.
Industry Competition and Market Trends
PepsiCo’s acquisition comes amid increasing competition in the functional beverage space. Rival brands, including Coca-Cola’s Simply Pop, have also ventured into the prebiotic soda market. (WSJ)
The global functional beverages market is expected to grow at a 7.1% CAGR from 2023 to 2030, reaching $353.4 billion by the end of the decade. (Grand View Research)
As consumers prioritize healthier alternatives to traditional sodas, major beverage companies are racing to innovate and acquire brands in the functional beverage sector.
PepsiCo’s acquisition of Poppi signals a major shift toward functional and health-focused beverages. This move not only strengthens PepsiCo’s portfolio but also positions it to capitalize on the booming functional beverage industry.
With consumer demand for gut-friendly and low-sugar drinks on the rise, Poppi’s integration into PepsiCo’s ecosystem could further accelerate the growth of prebiotic sodas in the mainstream market.