PepsiCo has announced a definitive agreement to acquire Poppi, a rapidly growing prebiotic soda brand, for approximately $1.95 billion.

This figure includes $300 million in anticipated cash tax benefits, resulting in a net purchase price of $1.65 billion. The deal also includes potential earnout considerations based on the achievement of specific performance milestones post-acquisition.

This acquisition is part of PepsiCo’s ongoing strategy to diversify its product portfolio and align with shifting consumer preferences toward healthier beverage options.

Ramon Laguarta, chairman and CEO of PepsiCo, highlighted the company's commitment to evolving its offerings through innovation and strategic acquisitions. "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," he said.

Founded by Allison and Stephen Ellsworth, poppi has gained traction in the beverage market by combining prebiotics, fruit juice, and apple cider vinegar into a low-calorie soda that contains no more than five grams of sugar per serving.

The brand's focus on health and wellness resonates with a growing demographic of consumers seeking functional beverages. Since its inception, Poppi has cultivated a loyal customer base, driven by its unique nutritional profile and cultural relevance.

The brand initially gained national attention after appearing on the television show Shark Tank, where it received investment support from Rohan Oza and CAVU Consumer Partners. The partnership has been instrumental in Poppi's rapid growth trajectory, positioning it as a notable player in the functional beverage space.

Ram Krishnan, CEO of PepsiCo Beverages US, described Poppi as a perfect addition to PepsiCo’s portfolio, noting its unique intersection with wellness and culture. "We are big fans of the poppi brand movement and believe this incredible brand paired with our commercial capabilities will drive continued growth and innovation for years to come," he remarked.

The acquisition aligns with broader industry trends that reflect a shift towards healthier beverage options. As consumer preferences evolve, major companies like PepsiCo are increasingly investing in brands that offer functional benefits, such as improved gut health and lower sugar content.

As the market for functional beverages continues to expand, this move positions PepsiCo to leverage Poppi's growth potential while reinforcing its commitment to innovation in the beverage sector.

Last month, Poppi faced criticism for gifting influencers full-sized, soda-stocked vending machines as part of a Super Bowl LIX marketing stunt, sparking backlash on social media from fans who questioned why such an expensive gesture was reserved for wealthy influencers rather than the broader customer base.