PepsiCo Sparks Controversy with $2 Billion Purchase of Dubious “Health Drink”

PepsiCo has unveiled plans to enter the health drink sector by acquiring the contentious prebiotic soda brand Poppi for an impressive $2 billion.

Poppi soda, priced at $2.49 per can, has attracted a considerable fan base, even catching the attention of celebrities such as
JLo
and
Paris Hilton
who have signed profitable advertising contracts with the beverage’s producers

This product is promoted as ‘good for you’ because each can contains two grams of prebiotic fiber, which purportedly aids in increasing beneficial bacteria in your digestive system essential for various critical health processes.

Nevertheless, the brand has encountered considerable challenges in recent months — following an impact due to
$5 million lawsuit
Claims suggest that this so-called ‘healthy’ beverage offers no advantages and is packed with sugar.

On Monday, news about the acquisition upset some Poppi enthusiasts.

One person commented, “Bummer & Poppi were acquired by PepsiCo—large corporations alter the quality!”

“Poppi has just been acquired by Pepsi. It’s amazing how many people commented, ‘Yep, we’re finished.’ Honestly, I appreciate how today’s society recognizes that large corporations are ruining things,” noted someone else.

A third party chimed in, “There’s concern that Pepsi might alter the ingredient list, making it similar to yet another bland product with aspartame—a type of sweetener—something customers wouldn’t buy from them. That’s likely why they acquired Poppi. It’s disheartening because this leaves us without one more non-mainstream beverage option.”

This purchase provides PepsiCo with a rapidly expanding brand in the
popular functional beverage category
.

‘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 Chairman and CEO Ramon Laguarta.

PepsiCo stated that with an estimated $300 million in expected cash advantages, the overall cost of acquisition amounts to $1.65 billion.

Allison Ellsworth, who co-founded Poppi based in Austin, Texas, mentioned that merging with PepsiCo will broaden Poppi’s market presence.

We’re excited to start this new chapter with PepsiCo as we aim to introduce our soda to a larger audience,” Ellsworth stated. “I am confident that they will preserve what makes Poppi truly unique while fostering our expansion and creativity.

In 2015, Ellsworth created Poppi — originally called Mother Beverage — in her kitchen since she enjoyed sodas but was unhappy with how they affected her well-being.

She combined fruit juices with apple cider vinegar, sparkling water, and prebiotics, then offered the beverage for sale at local farmer’s markets.

In 2018, the brand gained significant traction when Ellsworth and her spouse presented it on ‘Shark Tank.’

On the show, an investor named Rohan Oza acquired a share in Mother Beverage and initiated a significant rebranding effort. This led to the creation of Poppi, which debuted with vibrantly colored cans featuring fruity flavors.

“We’re incredibly excited about our partnership with PepsiCo, allowing countless consumers throughout America and globally to experience Poppi,” stated Oza, co-founder of CAVU Consumer Partners, an investment firm that has backed beverage companies such as Oatly and Bai.

Poppi purchased an advertisement during the Super Bowl for the second consecutive year this time around, shelling out as much as $8 billion for the spot.

Prebiotic sodas have gained popularity among consumers due to assertions that they promote the growth of beneficial bacteria in the digestive system; however, these health advantages have yet to be definitively confirmed.

Currently, Poppi is engaged in negotiations to settle a $5 million lawsuit from the previous year. The suit alleges that their products do not provide the advertised benefits for gut health.
CNBC
reported.

A band of dissatisfied customers along with diet experts are pointing fingers at the creators for marketing their product as beneficial for digestion when they claim it’s essentially just sugary water.

In the class action lawsuit, the plaintiffs argue that consuming only two grams of fiber is insufficient to provide any benefits for individuals, except perhaps those who drink around four cans per day.

At this stage, the 20 grams of sugar — which is akin to eating three cookies — could negate any advantage provided by the prebiotic.

The legal action claims that the business deceived consumers by exaggerating the health advantages associated with the presence of agave inulin, which is a form of plant-based fiber and also acts as a prebiotic.

Read more