Why did PepsiCo buy soda brand Poppi for nearly $2 billion?

PepsiCo, an American multinational food, snack, and beverage corporation, has announced to secure a nearly $2 billion deal to buy Poppi, a fast-growing prebiotic soda brand.

The move came as the food and beverage manufacturer is seeking to capitalise on the heightened consumer demand for healthy products.

Although soda consumption has fallen broadly in the US over the past two decades, Poppi’s prebiotic sodas have gained over health-conscious consumers over the past five years.

In an announcement, PepsiCo said the company had reached a definitive agreement to acquire Poppi, the Austin, Texas-based brand, for $1.95 billion.

Of the $1.65 billion, there are $300 million of anticipated cash tax benefits for a net purchase price.

Poppi, also known as the fast-growing prebiotic soda brand, launched in 2018 as a home-brewed infused apple cider vinegar concoction sold at farmers’ markets.

Earlier, the company’s founders– husband and wife, Stephen and Allison Ellsworth– earned an investment with Rohan Oza on “Shark Tank.”

Allison Ellsworth, Poppi’s chief brand officer, in a statement said that offering poppi to more people is an exciting prospect for them.

Allison hopes that PepsiCo will honour what makes Poppi so unique while supporting its next phase of growth and innovation.

Recently, Poppi’s Super Bowl ad spot starring Alix Earle attracted millions of new consumers.

Poppi is available at nationwide major retailers, including Whole Foods, and combines fruit juice to create a refreshing soda drink. It contains 5 grams of sugar and 25 calories per can.

In January, PepsiCo said it had closed its $1.2 billion acquisition of Siete Foods for $1.2 billion. In November, the brand would buy the remaining 50% of Sabra and Obela dip and spread brands from Strauss Group.