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Diving briefs:
Dive Insights:
PepsiCo built an empire behind sugary soda drinks, including cola of the same name, MTN Dew and mug’s root beer. POPPI purchases show ocean changes in the soda category and test the increase in consumers craving more functional ingredients and sugar reduction in soft drinks.
PepsiCo Chairman and CEO Ramon Ragualta said it is following the company’s plans to strategically acquire the brand in new spaces to evolve this portfolio.
“More than ever, consumers are looking for convenient and fantastic fashionable options that suit their lifestyle and address the growing interest in health and wellness,” said Ragualta. “Poppi is a great complement to our portfolio transformation efforts to meet these needs.”
Poppi first attracted national attention after appearing on the 2018 episode of Shark Tank and received an investment from Rohan Oza, co-founder of Cavu Consumer Partners. It was released two years later at the beginning of the Covid-19 pandemic. The functional soda maker has increased its presence in recent years, following a $25 million funding round in late 2022.
PepsiCo initially planned to launch a better soda under the brand name SoulBoost, but it was Knicks in development amid signs that the product would not be successful. Bloomberg reported. Despite its deep financial, marketing and distribution resources, PepsiCo seems to have decided it would be better to go out and buy competition rather than struggle to compete with its own products.
That strategy is in contrast to Coca-Cola. Instead of going out and buying the brand, Coca-Cola decided to start offering prebiotic sodas under a simple juice brand.
Pepsico prioritizes buying trendy brands with healthier ingredients to diversify its portfolio and compete better in drinks and snacks. Last October, Siete Foods, a Mexican-American tortilla chip maker, acquired it for $1.2 billion, known for its clean label ingredients.
Poppi’s formula includes prebiotic blends like sparkling water, apple cider vinegar and agavelin. It has been expanded in 14 flavors including orange cream, root beer, and cherry rimed.
Poppi’s health claims also face some scrutiny, with a class action lawsuit filed last summer claiming that the drink is “basically sugary water.” This year’s highly-catching Super Bowl ads and marketing campaigns that include vending machine giveaways for social media influencers, It also sparked a controversy.
Christopher Doring contributed to this report.
