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PepsiCo announced Monday that it will acquire prebiotic soda brand Poppi for $1.95 billion as the food and drink giant attempts to capitalize on growing consumer demand for healthy products.
The transaction includes an expected cash tax of $300 million, with a net purchase price of $1.65 billion, which is part of Pepsi’s strategy to expand its “better” offering.
PepsiCo CEO Ramon Ragualta said in a statement Monday that the company has evolved its beverage and drink portfolio for years, through innovation with the brand and “through disciplined, strategic acquisition that can provide more positive choices to consumers.”
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The agreement includes an expected cash tax benefit of $300 million, resulting in a net purchase price of $1.65 billion. (Eugene Gologursky/Getty Images by Poppi) /Getty Images)
More than ever, consumers are looking for options that align with their lifestyle and growing interest in health and wellbeing, Laguarta said. This latest acquisition reflects the company’s commitment to meeting this growing demand for healthier options, highlighting its ongoing portfolio transformation efforts.
Founded by a family in Austin, Texas, Poppi is said to be a low-calorie soda that combines prebiotics and fruit juice. The company said there is no less than five grams of sugar per serving. In the early days, the founder sold his homemade formulations at the farmers market and then invested heavily in ABC’s “Shark Tank” series. Drinks were later available at major retailers nationwide.
ticker security last change change %PEP PEP PEPSICOINC. 151.34+2.75+1.85%
Last month, Lagualta spoke to analysts about PepsiCo’s revenue calls. The company said it recognized that “all American consumers in general have a higher level of awareness towards health and wellbeing.”
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Laguarta noted that this shift is potentially driven by “all conversations about obesity medications as well as other conversations that are occurring around the health and wellness space.”
Founded by a family in Austin, Texas, Poppi is said to be a low-calorie soda that combines prebiotics and fruit juice. (Eugene Gologursky/Getty Images by Poppi) /Getty Images)
“There are high levels of health and wellness by consumers, which drives some of the actions we are working on,” he added.
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He said that although the company has been focusing on potion control for many years, other long-term changes to its portfolio include “lower sodium, low fat, low sugar, positive ingredients, plant-based proteins, whole grains.”
Meanwhile, PepsiCo rival Coca-Cola is jumping into the space by firing its own prebiotic soda to catch up with trendy “gut-healthy” soda.
ticker security last change change %ko coca-colaco. 70.13+0.98 +1.42%
Coca-Cola CEO Becca Kerr said in a statement that “wellness-focused Gen Z-ers and Millennials are really interested in juice and prebiotic sodas,” Simply Pop, which launched online last month on the West Coast, Southeast and online via Amazon Fresh.
Future market insights show that the prebiotic soda market is expected to be valued at $54.5 million by 2034.
