• PepsiCo has acquired prebiotic soda brand Poppi for $1.7 billion, strengthening its presence in the functional beverage market.
  • The acquisition follows Pepsi’s broader strategy of investing in healthier, functional products, including its recent $1.2 billion purchase of snack brand Siete.

PepsiCo has acquired the prebiotic soda brand Poppi for $1.7 billion, further expanding its presence in the functional beverage market. The acquisition reflects the growing demand for health-conscious drinks and aligns with Pepsi’s strategy to diversify its portfolio with functional products.

Poppi has seen significant growth, generating $391 million in sales over the past year. Pepsi is valuing the company at approximately 4.2 times its annual revenue, signaling confidence in its future potential. Analysts suggest that Pepsi’s vast distribution network will help scale Poppi’s reach.

According to TD Cowen analyst Robert Moskow, the acquisition is a logical move.

“Pepsi’s capability to expand Poppi’s distribution makes this a strategic fit, especially given the increasing consumer preference for functional beverages,” he said.

Poppi’s journey began in 2018 when founders Stephen and Allison Ellsworth introduced their product—then known as Mother Beverage—on ABC’s Shark Tank. They secured a $400,000 investment from investor Rohan Oza for a 25% stake.

The brand was later rebranded as Poppi, positioning itself as a leading player in the functional soda category. By 2022, it had raised $25 million in funding, gaining visibility through major advertising campaigns, including Super Bowl commercials.

The brand has also received endorsements from celebrities such as Jennifer Lopez, Billie Eilish, and Mila Kunis, contributing to its rising popularity.

The acquisition of Poppi follows Pepsi’s $1.2 billion purchase of snack brand Siete in January, reinforcing its commitment to expanding its “better-for-you” product line. The move aligns with shifting consumer preferences toward healthier alternatives and functional beverages.

Despite the announcement, Pepsi’s stock saw only a modest 1.9% increase on Monday. Meanwhile, the S&P 500 remains down by about 3.5% this year. However, market analysts remain optimistic about Pepsi’s long-term potential in the growing functional beverage sector.

Edited by Harshajit Sarmah