Pepsi acquires Poppi for $1.95 billion as consumers look for healthier options

The news: PepsiCo is acquiring prebiotic soda company Poppi for $1.95 billion, as it looks to “better for you” products to inject some fizz into stagnating sales.

The market opportunity: The acquisition reflects a broader shift in consumption patterns. Shoppers are increasingly looking for functional products that offer some kind of health benefit, be it high protein or digestive aid, possibly as a way of justifying the purchase in an era of skyrocketing grocery costs.

• That trend has hugely benefited Poppi and competitor Olipop, which netted over $500 million and $400 million to $450 million in sales, respectively, in 2024.
• It’s also attracted celebrity names like Ben Stiller, who plans to launch his own healthy soda brand.
• However, this growth has come at the expense of Pepsi, which experienced a 3% YoY decline in North America beverage volume last year.
• The acquisition of Poppi should not only help revive those numbers but also give Pepsi an advantage over Coca-Cola, which is attempting the more arduous task of launching its own prebiotic soda line.

The big picture: Pepsi’s purchase of Poppi is part of the CPG company’s portfolio overhaul as it looks to accommodate consumers’ growing preoccupation with health and wellness. That strategy includes offering smaller portions of its signature products, along with more high-protein, whole grain, lower-fat, and lower-sodium items.

This realignment has a few extra benefits. While the impact of GLP-1 adoption on snack sales is so far minimal, adjusting its portfolio now puts Pepsi in a good position to mitigate future disruption. It also could reduce some of the heat from Health and Human Services Secretary Robert F. Kennedy, Jr., who has referred to soda as “poison” and campaigned against ultraprocessed foods.