In a nod to the changes reshaping the U.S. soft drink market, PepsiCo has agreed to buy the upstart soda brand poppi for $1.95 billion.
Poppi, the 10-year-old brainchild of a husband-and-wife team in Texas, has quickly won fans with its New Age-y product line. Its carbonated beverages pack the flavor and mouthfeel of conventional sodas but are sweetened with just five grams of sugar per 12-ounce can, for a calorie count of 35 calories per serving.
The sodas’ health halo is further polished by their designation as a prebiotic, or a consumable that fosters good gut health. The beverages contain fiber, which fosters “good” intestinal bacteria, as well as apple vinegar cider, a drink component believed by many to provide additional health benefits.
The drink line is currently offered solely in canned form, without a fountain option. But the beverages are offered in the coolers of many convenience stores, including 7-Eleven, as well as on grocery shelves.
“We believe poppi is the soda that will be embraced for generations to come,” said Allison Ellsworth, who came up with the recipe at her kitchen table in 2015. “We can't wait to begin this next chapter with PepsiCo to bring our soda to more people.”
Ellsworth was looking for a more healthful alternative to traditional sodas when she started mixing fruit juices with apple cider vinegar, prebiotic ingredients and sparkling water. She took her creation to a farmers’ market near her Dallas home, where a buyer from Whole Foods happened to be shopping.
Ellsworth enlisted her husband, Stephen, in the rollout effort, and the brand was on its way.
A big boost came when the couple was invited to air their venture on “Shark Tank,” the reality tv show where entrepreneurs pitch a battery of venture capitalists for growth funding. One of the investors on the show that day was Rohan Oza, whose past successes included backing Vitaminwater and Vita Coco coconut water. Oza liked what he heard and entered into a deal.
Retail placements followed. Further topspin came from winning the public favor of celebrities like Billie Eilish, JLo, Post Malone and Kylie Jenner.
"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,” said Ram Krishnan, CEO of PepsiCo Beverages U.S. “Poppi is a great complement to our portfolio transformation efforts to meet these needs."
The soft drink and snacks giant agreed to pay just under $2 billion for poppi, which is currently is available in 14 flavors. PepsiCo noted that it should realize a cash tax benefit of $300 million from the deal, lowering the out-of-pocket cost to $1.65 billion.
As Managing Editor for IFMA The Food Away from Home Association, Romeo is responsible for generating the group's news and feature content. He brings more than 40 years of experience in covering restaurants to the position.