PepsiCo agreed to acquire prebiotic soda brand Poppi for $1.95bn, securing a foothold in the rapidly growing functional beverage market. 

The deal reflects PepsiCo’s push into health-focused brands as consumer preferences shift toward functional drinks with perceived wellness benefits.

Prior to the acquisition, Poppi received funding from CAVU Consumer Partners, a private equity firm specializing in consumer brands. CAVU Consumer Partners invested in Poppi from its initial seed round through to its sale to PepsiCo, helping scale the brand’s market presence and distribution.

Poppi, which launched in 2018 with an investment from Shark Tank, has grown significantly, capturing 19% of the U.S. prebiotic soda market and surpassing Coca-Cola’s Simply Pop. Its sales topped $100m by 2024, driven by endorsements from celebrities like Hailey Bieber, Kylie Jenner, and Post Malone.

The acquisition underscores the rising investor interest in functional beverages, an emerging sector within consumer health. Private equity firms have increasingly backed companies in this space, capitalizing on the demand for alternatives to traditional sodas. With PepsiCo now moving aggressively into the category, private equity players will likely explore further consolidation and investment opportunities in functional drinks.

As PepsiCo integrates Poppi into its portfolio, the deal highlights the evolving landscape of beverage investments, where private equity and strategic buyers are competing for high-growth, health-focused brands.