PepsiCo spends nearly $2bn on prebiotic soda brand Poppi

(Sharecast News) - Soft drinks giant PepsiCo is to spend nearly $2bn on fast-growing prebiotic soda brand Poppi, which it says is part of ongoing "portfolio transformation efforts" to adapt to changing consumer needs.

Poppi started life as a home-brewed brand called Mother Beverage trading at farmers' markets, before securing a Shark Tank investment in 2018, and is now available at major retailers across the US.

PepsiCo said it would spend nearly $1.95bn on the deal, including $300m of anticipated cash tax benefits for a net purchase price of $1.65bn.

"As we look to reorient our portfolio offerings to address white space consumer needs, the poppi brand's unique intersection with wellness and culture is a perfect addition to our portfolio," said Ram Krishnan, chief executive of PepsiCo Beverages US.

PepsiCo praised the brand's "consumer-first approach, cultural cache, and nutritional profile", which have supported a loyal fan base and drive rapid growth, the company said.

Chair Ramon Laguarta said the company has been making "disciplined, strategic acquisitions" to offer "more positive choices to our consumers".

"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. Poppi is a great complement to our portfolio transformation efforts to meet these needs."

PepsiCo shares were up 1.6% at $150.96 by 1227 ET.