From Shark Tank to Soda Giant: PepsiCo to Acquire Poppi for $1.95 Billion
PepsiCo is poised to expand its reach into the "better-for-you" beverage market with the acquisition of Poppi, the prebiotic soda that gained significant traction after appearing on the hit television show Shark Tank. In a news release on Monday, PepsiCo announced it had reached an agreement to purchase Poppi for a staggering $1.95 billion, a testament to the brand’s rapid growth and appeal to health-conscious consumers. The specific date for the finalization of the sale was not disclosed.
Poppi, known for its brightly colored cans and unique flavor profiles, captured the attention of investor Rohan Oza when he appeared as a guest on Shark Tank in 2017. At that time, the brand was known as Mother Beverage and sported a less eye-catching design, packaged in glass bottles. Founders Allison and Stephen Ellsworth’s vision for a healthier soda alternative impressed Oza, who ultimately invested in the company, setting the stage for its transformation into the popular brand it is today.
However, Poppi’s journey has not been without its challenges. Last summer, the company faced a class-action lawsuit alleging that its drinks did not contain sufficient prebiotic fiber to deliver meaningful gut health benefits. Poppi recently announced an $8.9 million settlement in the case, which is currently awaiting court approval. Despite this legal hurdle, the acquisition by PepsiCo signals a strong vote of confidence in Poppi’s future potential and market position.
As the Ellsworths prepare to relinquish control of their company, it’s worth examining Poppi’s remarkable rise in the beverage industry. The soda contains prebiotics sourced from agave inulin and cassava root fiber, as well as apple cider vinegar, fruit juice, and sugar, according to the company’s website. Each 12-ounce can contains five grams of sugar or less and no more than 35 calories.
The class-action lawsuit, filed in June by Kristen Cobbs of San Francisco against VNGR Beverage LLC, the Texas-based corporation responsible for manufacturing, marketing, and selling Poppi, centered on the amount of prebiotic fiber in each can. The lawsuit claimed that the two grams of prebiotic fiber in each can were insufficient to provide significant health benefits. To experience any potential advantages, consumers would have to consume more than four Poppi sodas per day. The suit further argued that the high sugar content of such a large number of sodas would negate any claimed gut health benefits.
In response to the lawsuit, Poppi defended its products and its mission to revolutionize the soda industry for the next generation. The company emphasized its dedication to innovation and the creation of a beverage experience that millions of consumers have enjoyed. Poppi maintained that the lawsuit was baseless and pledged to vigorously defend itself against the allegations.
The origins of Poppi, then known as Mother Beverage, can be traced back to Season 10 of Shark Tank, which aired in 2018. However, the episode featuring the Ellsworths was filmed in 2017. During the episode, Stephen stated that he and Allison had launched the brand approximately 18 months prior.
Allison revealed on Shark Tank that she was inspired to create Mother Beverage after discovering the health benefits of apple cider vinegar. She claimed that it helped her lose weight, reduce bloating, and improve her skin clarity. However, she found the taste of apple cider vinegar unappealing, so she began experimenting with different drink combinations in her kitchen.
Before appearing on Shark Tank, the Ellsworths sold Mother Beverage at farmers markets in the Dallas-Fort Worth area. Their most popular flavors included blueberry sage, lime ginger, raspberry rose, and pineapple turmeric. After 18 months in business, Mother Beverage had generated approximately $500,000 in gross revenue and was available in Whole Foods Markets throughout the Dallas-Fort Worth area, as well as over 200 Albertson locations. The bottles were priced between $2.99 and $3.59, and the couple projected $1 million in revenue within the year.
Rohan Oza was the only Shark to offer the Ellsworths a deal. He ultimately invested $400,000 in Mother Beverage for a 25% ownership stake in the company. The Ellsworths had originally sought a $400,000 investment in exchange for a 10% stake in the company. The episode featuring the Ellsworths pitch of Mother Beverage on Season 10 of Shark Tank is available for streaming on Hulu.
When the Ellsworths first presented Mother Beverage on Shark Tank in 2017, a glass bottle sold for between $2.99 and $3.59. Currently, a 12-ounce can of Poppi is priced between approximately $2.39 and $2.49 on Target’s website. According to Poppi’s website, the brand’s best-selling flavors are Doc Pop, Orange, and Strawberry Lemon.
PepsiCo’s acquisition of Poppi is a strategic move to diversify its product portfolio and cater to the growing demand for healthier beverage options. By integrating Poppi into its existing distribution network and leveraging its marketing expertise, PepsiCo has the potential to significantly expand Poppi’s reach and market share. This acquisition represents a significant milestone for Poppi, transforming it from a small startup nurtured on Shark Tank into a major player in the competitive beverage industry. For the Ellsworths, it marks the culmination of years of hard work and dedication, transforming a simple idea into a billion-dollar brand. As Poppi enters this new chapter under the PepsiCo umbrella, the future looks bright for this innovative and health-conscious soda alternative.