Young Americans are increasingly turning to healthier sodas and energy drinks as part of a broader shift to fitness and lifestyle products, and Coca-Cola is expanding its Simply brand with the launch of a prebiotic soda called “Simply Pop.”
The Poppi deal strengthens PepsiCo's presence in the health drinks category at a time when multiple price hikes are putting pressure on demand for its sodas and Lay's snacks, forcing the company to forecast weak annual earnings.
Prebiotic carbonated beverages have become the fastest growing category in the carbonated soft drinks (CSD) segment in the US, driven by a shift in preferences toward beverages primarily focused on gut health.
According to JP Morgan analyst Andrea Teixeira, the deal will help “establish a foothold in the fast-growing ‘modern’ carbonated beverage segment and strengthen CSD’s portfolio, which has been losing share to Coca-Cola and Keurig Dr Pepper for years.”
According to PepsiCo, Poppi combines prebiotics, fruit juice, and apple cider vinegar to create a low-calorie soda that contains no more than five grams of sugar per serving.
Poppi, founded by Steven and Allison Ellsworth, was originally known as Mother and was renamed in 2020. The founders appeared on Shark Tank in 2018 and received backing from investor and co-founder of CAVU Consumer Partners Rohan Oza .
Source: Reuters
