Poppi soda
Getty Images for Poppi
PepsiCo just announced it is acquiring prebiotic soda brand Poppi for almost $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 skeptics 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.
From Kitchen Experiment to Number One Healthy Soda On Amazon
Poppi started out as home-brewed beverage sold at farmers’ markets by husband and wife Stephen and Allison Ellsworth, before making an appearance on Shark Tank, getting funding, distribution and a whole new rebranding from Mother Beverage to Poppi. By mixing fruit juices with apple cider vinegar, prebiotics, and sparkling water, Allison Ellsworth aimed to reinvent soda formulas to get rid of the excessive sugar levels while keeping the taste of soda. With flavors such as cherry soda, cream cola, root beer and many more, Poppi’s ambition is to attract soda drinkers looking for healthier alternatives without giving up on the classic taste and flavor of soda. Fast-forward just a few years and the brand became one of the fastest-growing beverage brands in the U.S., achieving more than $100 million in revenue and selling in over 120 retailers in the country.
By embarking on a journey to reinvent soda formulas, Ellsworth bet on the fact that Americans could be interested in healthier soda alternatives, and without knowing it became one of the first to disrupt the soda industry. What is now evident is that health and wellness has become a tendency, not a trend: consumers are increasingly eyeing and making healthier choices, affecting every category in the CPG world. And while Coke and Pepsi will likely always dominate the soft drinks market – at least for the foreseeable future – they cannot ignore the shift in the market towards healthier living, directly impacting their product offerings. In 2024, the functional beverages market reached $134 billion and is set to reach $231 billion by 2033. This alone demonstrates the growing interest and shift to healthier drinks, explaining the multitude of new brands wanting to respond to this demand.
PepsiCo’s acquisition of Poppi and Coca-Cola’s launch of a direct rival brand is a clear manifestation 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.”
Poppi’s Beach Bash event in Montauk in 2023 where dozens of influencers attended.
Getty Images for Poppi
There are dozens, if not more better-for-you soda and soft beverages on the market though. What makes Poppi so successful?
Poppi’s Recipe For Success: Keep The Cultural Significance Of Soda, Change Everything Else
What Poppi as a brand has done remarkably well is its approach to brand and marketing, contributing to making it a cultural phenomenon. Its colorful and retro cans echo the brand’s lifestyle aspirations, centered around fun and nostalgia, appealing to Gen Z and millenials alike (tapping into nostalgia to build an emotional connection is also a strategy built by rival Olipop). “Poppi’s become so much more than a soda, it’s a tight-knit community and lifestyle at this point. From exclusive merch to exciting collaborations with other brands, we’re creating hype and interest that goes beyond a product. As soda lovers, we want to share the joy and the freedom of drinking soda again and normalizing it. For a long time, soda has had a bad reputation and it’s our mission to turn that around. The response we see from Gen Z lets us know we’re on the right path!,” shared Ellsworth with Forbes.
Poppi has embraced a dynamic go-to-market strategy that blends traditional retail distribution—Whole Foods, Target, Costco, 7-Eleven, Publix, Amazon, and more—with a modern, influencer-driven approach. Much like Alo Yoga in the wellness space, the brand collaborates with popular influencers and celebrities while hosting eye-catching events, from beach parties to futuristic pop-up experiences, to amplify its presence on social media.
“Poppi hour” at Azul On the Rooftop at Hotel Hugo on July 26, 2022 in New York City.
Getty Images for poppi
But Poppi isn’t just targeting a niche audience—it’s making a bold play for mainstream recognition. For the second year in a row, the brand secured a coveted Super Bowl commercial spot, a stage typically dominated by beer and traditional soda brands. In fact, Poppi’s 2024 ad, The Future of Soda, became the most-watched commercial of the game, reaching 29.1 million households.
Creating a cultural buzz and refreshing a product category entirely to appeal to both young consumers and historic soda drinkers is something dominant brands like Coke or Pepsi simply cannot achieve, not even by launching a new brand as they most likely will not be able to build a community and lifestyle around it the way new brand founders are able to do when they have complete freedom around formula, creative choices and go-to-market, and their stories resonate more with consumers than large FMCG companies. Yes, starting small and from nothing sometimes does have its advantages.
PepsiCo’s acquisition of Poppi signals a clear shift – better-for-you sodas are not going away, and the soft drinks industry is finally evolving for the better. As consumers demand healthier, functional beverages without sacrificing flavor, legacy brands are being forced to adapt and take the health and wellness movement seriously. “Gut-friendly” claims might not last, but the underlying messaging, formulas and objectives of better-for-you drinks will. And if Poppi’s success is any indication, the next generation of soft drinks won’t just be about what’s in the can – it will also be about the culture, lifestyle and community behind it.
