PepsiCo announced this morning it has entered a definitive agreement to acquire Poppi for $1.95 billion, officially bringing the CSD giant into the next gen functional soda set.
The deal includes $300 million of anticipated cash tax benefits, bringing the net purchase price to $1.65 billion, according to a press release.
The announcement follows rumors that the two companies were closing in on an acquisition deal, including a Bloomberg report on Friday that suggested a potential deal could surpass $1.5 billion.
“We’ve been evolving our food and beverage portfolio over many years, including by innovating with our brands in new spaces and through disciplined, strategic acquisitions that enable us to offer more positive choices to our consumers,” said PepsiCo chairman and CEO Ramon Laguarta in the press release. “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. Poppi is a great complement to our portfolio transformation efforts to meet these needs.”
In a statement shared with BevNET, Poppi CEO Chris Hall praised the brand’s founders, Allison and Stephen Ellsworth, on their work creating the brand.
“The growth Poppi has experienced in just five years is unprecedented,” Hall said. “It has been an honor to work alongside the Ellsworths, the Poppi team, and our partners as we created a leading brand, a movement, and a community like no other. I am thrilled to enter this next chapter with PepsiCo as they support our continued growth and innovation and broaden our availability.”
Alongside Olipop, Poppi has been a leader in the prebiotic soda trend that has upended the CSD category with low sugar, functional products. According to NielsenIQ, U.S. retail dollar sales of Poppi were up 167.3% in the 52-week period ending January 11 to over $359.9 million, and volume sales grew 178.2% in the same period.
“We believe Poppi is the soda that will be embraced for generations to come, and we’re beyond grateful to the amazing poppi team, our partners who believed in us from the very beginning and most importantly our incredible community,” said co-founder Allison Ellsworth in the release. “We can’t wait to begin this next chapter with PepsiCo to bring our soda to more people – and I know they will honor what makes Poppi so special while supporting our next phase of growth and innovation. I hope our story inspires others to explore their passions, take the risk, and believe that anything is possible.”
“As we look to reorient our portfolio offerings to address white space consumer needs, the Poppi brand’s unique intersection with wellness and culture is a perfect addition to our portfolio,” said Ram Krishnan, CEO, PepsiCo Beverages U.S. in the release. “Allison and the Poppi team have built a magnetic brand that’s ahead of the trends, with a loyal consumer base and a demonstrated capacity for growth. We are big fans of the poppi brand movement and believe this incredible brand paired with our commercial capabilities will drive continued growth and innovation for years to come.”
Founded as an apple cider vinegar drink called Mother Beverage, Poppi rebranded to its current version following an investment from Rohan Oza and CAVU Venture Partners after an appearance on Shark Tank.
Prior to the deal, Pepsi pulled the plug on a relaunch of its Soulboost brand, which would have been a play to compete in the prebiotic soda space.
The conglomerate is now poised to compete in the category against Coca-Cola (Simply Pop) and Keurig Dr Pepper (Bloom) as well as independent brands like Olipop and Culture Pop, the top- and third-best selling brands in the category. Big Geyser will remain as Poppi’s exclusive distributor in the New York City metro area.
The transaction is subject to regulatory approval and other customary closing conditions.