PepsiCo officially adds Poppi to its brand portfolio as it looks to M&A for growth

PepsiCo (NASDAQ:PEP) announced on Monday that it closed on the acquisition of Poppi for $1.95 billion. The deal price included $300 million of anticipated cash tax benefits for a net purchase price of $1.65 billion. The transaction also includes a performance-based earn out contingent on the Poppi business achieving certain performance metrics.

The food and beverage giant said the acquisition marks a significant step in PepsiCo’s (NASDAQ:PEP) ongoing transformation of its portfolio, reinforcing its commitment to meeting evolving consumer preferences for great-tasting, functional products.

Pepsico (PEP) has been on an M&A tear recently, also adding Mexican-American food brand Siete and Middle Eastern food product brand Sabra to the portfolio.

“Poppi represents a compelling strategic fit within our short- and long-term vision for the future of beverages,” stated Ram Krishnan, CEO of PepsiCo Beverages U.S. “Its rapid growth, strong consumer engagement, and differentiated functional positioning make it a dynamic addition to our portfolio. We are excited to scale poppi’s momentum and unlock new growth through our capabilities – we’re just getting started,” added Krishnan.

Launched in 2018 as “Mother Beverage” and rebranded as Poppi after receiving Shark Tank-originated funding from CAVU Consumer Partners, Poppi falls into the ~$440M prebiotic soda category, a fast-growing segment of low-sugar beverages that contain fiber (prebiotics), probiotics, fruit juices, and apple cider vinegar. Since 2020, Poppi sales have tripled each year, reaching $100M in 2023. Analysts predict the prebiotic soda market will nearly double by 2030.

Pepsi (PEP) is not the only beverage giant getting into the healthy soda business. Earlier in the year, Coca-Cola (KO) launched Simply Pop, a prebiotic soda that is sold under its Simply Beverages brand.