Pepsi Buys Poppi: 6 Marketing Implications

1. The Market for Prebiotic Soda: What’s All the Fuss About?

Prebiotic sodas like Poppi or Olipop are designed to support gut health by containing prebiotic fiber, which feeds beneficial gut bacteria. Traditional sodas lack this benefit and often contain high amounts of sugar. According to Euromonitor International data, the U.S. market for digestive health drinks, also called prebiotic soft drinks, grew from US $197 million in 2020 to US $440 million in 2024 and is expected to grow to US $3.5 billion by 2032. While growing rapidly, digestive health soft drinks remained just 1% of the US $42.4 billion soft drink market in 2024, with the share expected to rise to approximately 8% by 2034.
However, sales volume is not the only thing soft drinks beverage companies chase; profitability is the name of the game. The profitability of prebiotic soda can be substantially higher than that of traditional soda’s. Prebiotic sodas typically command a higher price point than conventional soft drinks, often costing around US $20-US $30 for a 12-pack, while traditional soft beverages like Coke and Pepsi cost around US $10.

Beverage giants are seizing on the high growth opportunity and entering the market: In addition to Pepsi buying Poppi for US $1.95 billion, Coca-Cola recently announced the introduction of the Simply Pop drink. Starting in late February, consumers on the West Coast and Southeast could buy it in retail stores and on Amazon. The new drink, available in five fruit flavors, debuted under the Coca-Cola-owned Simply brand.

2. Pepsi Buys Poppi: Marketing Spend of Prebiotic Soda Brands

Startups in the highly competitive soft drink category, particularly companies like Poppi and Olipop, heavily invest in marketing and advertising. In fact, according to ad intelligence platform MediaRadar, during the first four months of 2024, Poppi’s advertising outspent energy drink Gatorade, a US 7 billion-plus sales-a-year brand, vs. Poppi’s approximately US $100 million in 2024.  Poppi spent more than US $$43 million on advertising from January to April, nearly six times the US $7.3 million it spent for all of 2023 . Meanwhile, Gatorade spent US $40 million, and Dr. Pepper spent US $32 million; only Coca-Cola and Red Bull spent more, at US $78 million and US $60 million, respectively. During that period, most of Poppi’s advertising focused on television ads and digital channels, with the company spending more than US $25 million on TV and US $18 million on digital ads.  An essential part of the expense was Poppi’s 2024 Super Bowl ad (Poppi also advertised at the Big Game in 2025).

 Poppi outspent energy drinks giant Gatorade in advertising.

3. What’s in it for Pepsi?

CPG giants like PepsiCo, Coca-Cola, and Keurig Dr. Pepper grow at a much lower rate than startups. They are constantly looking to enhance their brand portfolio with growing companies. This has been the case in the energy drinks category, e.g., PepsiCo’s acquisition of Rock Star Energy in 2020.  In the past few years, PepsiCo has acquired 50% of Sabra, a spread maker, that it didn’t already own, and last October, It bought Siete, a diversified Mexican American food maker.

4. Pepsi Buys Poppi: What Pepsi Can Learn from Poppi’s Marketing Practice  

Startups like Poppi are much more nimble and prone to unleash creativity in their marketing. Poppi has done a great job engaging the coveted GenZ and Millennial demographics. Features  of their marketing and advertising include:

• Clever use of social media. For example, the same color scheme is used for every 12 posts.
• Utilization of New Generation Creators like Alix Earle, comedian Jake Shane, and the star of “Love Island USA” Rob Rausch
• Amplification of User Generated Content, mainly through Poppi’s large TikTok community
• Use of big names attached to the Poppi product  like Post Malone, Olivia Rodrigo, and Paris Hilton
• Playful in-store presence
• Branding  prebiotic science as being cool and modern

“It’s just such a new day with these challenger brands in the last five years. The footprint that they have digitally and on social media, it resonates,” Barry Thomas, a senior global thought leader at Kantar, told Modern Retail.  “It’s so different than the traditional legacy marketing that happens at these big Fortune 500 companies. They’re just so wired into Gen Z, they’re so digitally native with how they go to market, and they’re radically changing CPG,” Thomas added.

 “Poppi’s marketing is so different than the traditional legacy marketing that happens at these big Fortune 500 companies. They’re just so wired into Gen Z, they’re so digitally native with how they go to market and they’re radically changing CPG.”

While traditional food advertising through TV, print, and radio still plays a role, digital marketing has taken center stage in engaging customers, building loyalty, and expanding reach. PepsiCo gains best practices and new marketing insights through the Poppi acquisition.

5. Who Are Poppi’s Marketing Service Providers?

• PR Agency: Magrino, a full-channel communications agency based in New York City
• Creative agency: Virtue Worldwide
• Media-buying agency: Tinuiti.
• Sport sponsorships include Los Angeles Lakers, Inter Miami CF
• Media buying profile: Heavy Social Media and CTV

6. PepsiCo Beverage Marketing Service Providers

• In-House: PepsiCo Beverages North America has an in-house content team, “The Content Studio,” that works with its 20+ beverage brand teams and agency partners The studio offers a customized approach to campaign development, communications strategy, brief writing, social listening, and analytics.
• Brand Consultancy: Sense Worldwide
• Media Agency: OMD
• Creative Agency: BBDO Worldwide

  
  Under the new PepsiCo ownership, some of Poppi’s marketing is expected to be streamlined into the larger organization. However, PepsiCo’s leadership must be careful and maintain some of the partnerships that helped Poppi’s marketing and advertising to excel.