PepsiCo Buys Prebiotic Soda Brand Poppi: A Game-Changer in Functional Beverages

PepsiCo (PEP.O) said on Monday that it would buy prebiotic soda brand Popi in $ 1.95 billion, at one time expanding the “healthier soda” category when the company is struggling with the falling demand for its traditional beverages and snacks.

PepsiCo shares were 1.6% in early trade.

Young Americans are rapidly moving to healthy soda and energy drinks, as part of a comprehensive change for fitness and lifestyle products, rival Coca-Cola (KO.N) has expanded its brand to launch a prebiotic soda called “Simply Pop”.

Pathols like Celsius Holdings (Celh.O) and Keurig Dr Pepper (KDP.O) have also targeted the market by snatching small energy and wellness drink makers.

The Popi Deal increases the appearance of PepsiCo in a healthy drink category at a time when many value growth weighs on the demand for its soda and las, pushing the company to forecast a weak annual profit.

The prebiotic soda has become a top-grade category in the US within the Carbonated Drink Segment (CSD), which is powered by a change in preference for more intestinal health-focused drinks.

The deal helps in “establishing a foothold in the fast-growing ‘modern’ soda segment and shoring up a CSD portfolio that has been losing share for years to Coca-Cola and Keurig Dr Pepper,” J.P. Morgan analyst Andrea Teixeira said.

PepsiCo stated that Popi adds prebiotics, fruit juice and apple cider vinegar, with less calorie soda not serving more than five grams of sugar per.

According to the report, Texas based company retail sales 122%, year-on, 122%in 12 weeks, year-to-year jumped and now according to the report, there is about 1%of the total carbonated soft drink category.