Over the last few years, emerging healthier soda alternatives have disrupted the traditional soda market like never before. They are growing in popularity due to newer generations’ more health-conscious approach and attention to ingredients in the products they consume.
This considerable consumer trend has prompted even top companies like PepsiCo and Coca-Cola to report declining or flat revenues caused by a slowdown in the U.S. market, which used to be among soda’s most profitable clients.
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Although the traditional soda market has been facing a decline, companies that were once small startups, such as Olipop, Poppi, and Culture Pop, have grown impressively in a matter of a few years, something even the most veteran competitors couldn’t achieve after decades of existence.
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Many companies in the alcohol, energy drink, and soda manufacturing industry have entered the healthier-drink alternative sector, including Coca-Cola (CCHBF) , which recently launched its own prebiotic soda brand, Simply Pop, to compete against its rivals.
Poppi prebiotic soda.
Poppi creates a profitable empire and becomes a top brand in record time
Poppi is a Texas-founded prebiotic soda brand that markets itself as a healthier alternative to traditional sugar-filled soda.
Although Allison Ellsworth started the passion project in 2015, it wasn’t until 2018 that she and her husband went on the American television show Shark Tank to pitch the idea and struck a $400k investment deal with businessman and investor Rohan Oza to kickstart the company.
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Only four years after its official launch, Poppi delivered profits of over $100 million in 2024, with a gross margin of 65%. This was a huge jump from its initial $30 million in 2020, landing it among the fastest-growing soda brands in the U.S.
Although Poppi is a tasty soda on its own, its founders attribute its immense success to adopting a digital-first marketing strategy to promote the modern brand. It placed all its bets on social media to grow its customer reach, especially among Millenials and Gen Z, who use these platforms most.
The company relies on social media influencers to expand its reach. These influencers have a pre-established community and can more easily influence their followers to join the Poppi fanbase, promoting organic growth through sustainable brand awareness.
PepsiCo to purchase Poppi for nearly $2 billion
On Mar. 17, PepsiCo (PEP) announced it will acquire Poppi for $1.65 billion, with an anticipated $300 million cash tax benefit, for a total purchase price of nearly $2 billion.
However, if Poppi achieves specific performance goals, Pepsi must make additional payments after the acquisition is finalized.
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Neither company has publically disclosed additional terms within the deal or given an official expected closing date, as it is pending regulatory approval.
This purchase comes after Pepsi published its fourth-quarter earnings for fiscal 2024, reporting negative net revenue performance compared to the same time last year, with flat results in its North American beverage market.
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