PepsiCo set to buy ‘healthy’ soda brand Poppi for $3 billion

Food and beverage giant, PepsiCo, is set to fork out billions of dollars as part of the company’s new “healthier” direction.

PepsiCo announced this week that it will acquire prebiotic soda brand Poppi for $3.06 billion ($US1.95b) as the food and beverage giant seeks to tap into the heightened consumer demand for healthy products.

The deal includes $471 million ($US300m) of anticipated cash tax benefits, making the net purchase price $2.6 billion ($US1.65b) and is part of Pepsi’s strategy to expand its “better-for-you” offerings, Fox Business reports.

PepsiCo CEO Ramon Laguarta said in a statement that the company has been evolving its food and beverage portfolio for years by innovating with its brands and “through disciplined, strategic acquisitions that enable us to offer more positive choices to our consumers”.

Mr Laguarta said now, more than ever, consumers are seeking choices that align with their lifestyles and growing interest in health and wellness.

Poppi is a prebiotic soda brand, that is marketed as a healthy alternative to regular soft drinks. Picture: Spencer Platt/Getty Images via AFP

This latest acquisition reflects the company’s commitment to meeting this growing demand for healthier options and underscores its ongoing portfolio transformation efforts.

Poppi, founded by a family in Austin, Texas, is described as a low-calorie soda that combines prebiotics and fruit juice.

The company said there is no more than five grams of sugar per serving.

In the early days, the founders sold the home-brewed concoction at farmers markets before nabbing a hefty investment on the ABC series Shark Tank. The drink later became available at major retailers nationwide.

Mr Laguarta told analysts on PepsiCo’s earnings call last month that the company recognised how “there’s a higher level of awareness in general of American consumers toward health and wellness”.

PepsiCo announced this week that is buying Poppi for more than $3 billion. Picture: Spencer Platt/Getty Images via AFP

He noted that this shift is potentially driven by “all the conversation around obesity drugs, but also other conversations that are happening around the space on health and wellness”.

“There is a health and wellness higher level of awareness by consumers, and that’s driving some behaviours that we’re addressing,” the CEO added.

He said that, while the company has been focusing on portion control for years, other long-term changes to its portfolio include “lower sodium, lower fat, lower sugar, positive ingredients, plant-based protein, whole grains”.

Meanwhile, PepsiCo rival Coca-Cola is also jumping into the space by launching its own prebiotic soda to keep up with trendy “gut-healthy” sodas.

Simply Pop launched last month on the West Coast, in the Southeast and online via Amazon Fresh after the company discovered that “wellness-focused Gen Z-ers and Millennials were really interested in juice and prebiotic sodas,” Becca Kerr, Coca-Cola’s CEO of nutrition, said in a statement.

The prebiotic soda market is expected to be valued at $85.6 million ($US54.5m) by 2034, according to Future Market Insights.

This article originally appeared on Fox Business and has been republished with permission.

Originally published as PepsiCo set to buy ‘healthy’ soda brand Poppi for $3 billion