PepsiCo buys prebiotic soda company Poppi for nearly $2 billion

PepsiCo said on Monday that it will pay almost $2 billion for Poppi, a prebiotic soda brand.

While soda consumption in the United States has declined over the previous two decades, prebiotic sodas, fuelled by industry newcomers Poppi and Olipop, have gained popularity among health-conscious customers in the last five years. The category's expansion makes it appealing to Pepsi and its competitor, Coca-Cola, which just introduced its own prebiotic soda brand, Simply Pop.

PepsiCo said that it has reached a formal deal to acquire the Austin, Texas-based brand for $1.95 billion, including $300 million in expected cash tax advantages, for a net acquisition price of $1.65 billion.

Poppi's creators, Allison and Stephen Ellsworth, created the company in 2018, the same year Olipop was founded. Poppi markets their sodas as containing prebiotics and apple cider vinegar, which company claims can improve intestinal health.

"We can't wait to begin this next chapter with PepsiCo to bring our soda to more people and I know they will honor what makes poppi so special while supporting our next phase of growth and innovation," Allison Ellsworth, Poppi's chief brand officer, said in a statement.

The beverage is available in 16 flavors: Strawberry Lemon, Raspberry Rose, Orange, Ginger Lime, Watermelon, Cherry Limeade, Grape, Wild Berry, Classic Cola, Root Beer, Doc Pop, Lemon Lime, Orange Cream, Cherry Cola, and Cream beverage.

Coca-Cola, Pepsi's competitor, capitalized on the trend by releasing its own brand of prebiotic sodas, Simply Pop, last month. Spindrift Soda and Bloom Nutrition are two comparable drinks that have just joined the market.