PepsiCo acquires Poppi for $1.95 billion.

PepsiCo just announced it is acquiring prebiotic soda brand Poppi for $1.95 billion, a major accomplishment for a brand founded less than ten years ago. This transaction echoes the year-on-year growth of the functional drink market, especially the better-for-you soda category, with competitor Coca-Cola launching Simply Pop just a few weeks ago and Olipop raising a $50 million Series C, valuing the rival prebiotic soda brand at nearly $2 billion.

These industry moves might finally convince sceptics that gut-friendly and other healthier soda alternatives are here to stay, forcing traditional players to evolve and adapt to growing demand for less sugary drinks.

PepsiCo’s acquisition of Poppi and Coca-Cola’s launch of a direct rival brand are clear manifestations of how the soft drinks industry is evolving.

“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 Ramon Laguarta, Chairman and CEO of PepsiCo, in a company 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.”

Overall, this acquisition will allow Pepsi to come up with various offerings without disrupting their own brand messaging. This is how this strategic move can be utilised better.