PepsiCo has decided to splash out nearly $2 billion on the acquisition of the prebiotic soda brand Poppi. This Purchase, a New York-based beverage behemoth is doubling down on its strategy to bank on healthier drinks, clearly aiming to appeal to the more health-conscious segment of consumers. According to Crain's New York Business, PepsiCo announced the deal today, which entails potential payouts contingent on Poppi's future performance benchmarks.
Previously, the soda giant was reported to have been tinkering with the idea of launching its own functional soda under the Soulboost brand. However, buying into Poppi's established market standing, they decided to tap into a brand already resonating with customers keen on ingesting fewer calories and more gut-friendly ingredients. After an investment from "Shark Tank," Poppi had seen a surge in popularity, as highlighted by CBS News.
"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," Ramon Laguarta, Chairman and CEO of PepsiCo, told CBS News. He emphasized the "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."
The functional soda domain is gaining traction as compared to its sugary counterparts, with brands like Poppi drawing in consumers with their low-sugar content beverages that boast prebiotics, fruit juice, and apple cider. Coca-Cola too has recently dipped its toes into similar waters, launching its own prebiotic brand, Simply Pop, as mentioned in the CBS News report. With its recent acquisitions, PepsiCo seems steadfast in capturing more of the functional beverage market share, following its closure of a deal with Siete Foods and acquiring a remaining stake in the Sabra and Obela dip and spread brands.
