In a move to broaden its portfolio, Pepsi will purchase Poppi, a prebiotic soda brand that has gained in popularity over the last several years, for nearly $2 billion, which further drove its shares upwards.
A combination of greater awareness around health and nutrition, changing consumer preferences, and economic conditions such as inflation have all played a role in the diversification of Pepsi and its rivals’ portfolios. At a time when soda consumption is on a downward trend, prebiotic sodas like Poppi promise to satiate people’s thirst for flavoured beverages with fewer calories, less sugar, added fiber, and all the flavour while promoting improved gut health.
The $1.95 billion includes $300 million of anticipated cash tax benefits, which brings the net purchase price to $1.65 billion, and promises that additional payments will accompany the achievement of certain performance milestones post-acquisition.
“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,” said PepsiCo CEO Ramon Laguarta in a statement. “Poppi is a great complement to our portfolio transformation efforts to meet these needs.”
