Behind Poppi’s Eye-Popping Price Tag After PepsiCo Deal

The food deal market is bumping after PepsiCo gobbled up yet another better-for-you brand with this week’s Poppi acquisition for a total of $1.95 billion.

That eye-popping price tag is a drop in the bucket for Pepsi, which has some $20 billion in earnings annually. But it’s a huge deal for emerging food and drink brands and their founders. One investor described it to me as “a new north star” for any entrepreneur or investor looking for an exit.

Poppi has become quite the success. What started in 2018 as a farmers market brand selling apple cider vinegar drinks from Austin-based couple Allison and Stephen Ellsworth has transformed into the brightly colored cans of prebiotic soda that now sell nationwide, thanks especially to the brand pivot incubated within Poppi chairman Rohan Oza’s CAVU Consumer Partners. Combine that marketing prowess with Poppi’s lineup of familiar and exciting flavors, and you can understand why the brand became a hot target for the beverage conglomerates that dominate what we drink.

BNP Paribas’ Kevin Grundy, who covers Pepsi along with other consumer brands, says Americans drink around 180 gallons of beverages a year, and that’s why Pepsi shelled out for Poppi. The brand resonates with a core consumer that skews younger and has found repeat sales in an up-and-coming and attractive category.

“It’s filling a void in their portfolio,” says Grundy. “Beverage consumption is a zero-sum game.”

Drink or be drank, in other words. Which is why Grundy says PepsiCo, Coca-Cola, Keurig Dr Pepper and other package goods conglomerates will continue to pay up, as long as the insurgent brand can deliver where it counts.

And the food industry is built on great rivalries—so don’t forget about Olipop. The Poppi acquisition could actually be a good thing for Olipop, which has roughly the same amount in retail sales as Poppi. Now it could be an even hotter acquisition target.

More on the Poppi deal coming from me soon! Enjoy the weekend! Spring is here!

— Chloe Sorvino, Staff Writer

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Chloe Sorvino leads coverage of food and agriculture as a staff writer on the enterprise team at Forbes. Her book, Raw Deal: Hidden Corruption, Corporate Greed and the Fight for the Future of Meat, published on December 6, 2022, with Simon & Schuster’s Atria Books. Her nearly nine years of reporting at Forbes has brought her to In-N-Out Burger’s secret test kitchen, drought-ridden farms in California’s Central Valley, burnt-out national forests logged by a timber billionaire, a century-old slaughterhouse in Omaha and even a chocolate croissant factory designed like a medieval castle in northern France.