Healthy soda brand Poppi denies being M&A target of large beverage companies
Poppi is not engaged in talks with a larger beverage company interested in acquiring the fast-growing company, co-founder Allison Ellsworth said in an interview. Instead, the prebiotic soda maker is focusing its attention on growth.
“As of now, no” we haven’t been approached by a potential buyer, Ellsworth said in an interview on the sidelines of the Beverage Forum in California. “I’m not creating this brand to make it really grow and then sell it. We’re just getting started. It’s really about the growth of the business right now.”
With flavors such as Doc Pop, Ginger Lime and Classic Cola, Poppi sales have topped $100 million, according to Inc., due to its nationwide presence in more than 120 major retailers including Target, 7-Eleven, Costco, Kroger and Whole Foods. The brand also is the top-selling soft drink on Amazon.
Ellsworth declined to share revenue, but noted that Poppi has posted triple-digit growth in recent years — a goal it expects to reach again in 2024. The company also is generating much of its growth not from entering new stores, but by increasing sales in locations where it already has a presence through higher product volumes. Poppi has strong customer repeat rates of over 40%, she said.
The figures have likely put Poppi on the radar of beverage companies interested in accelerating its growth and presence in better-for-you soda, even if they haven’t formally looked to acquire the beverage brand. Bloomberg reported in February that Coca-Cola was pursing an acquisition of Poppi, a report that surprised Ellsworth. “I actually don’t know where that came from,” she said.
Robert Ottenstein, a senior managing director and head of the global beverages and household products team with Evercore, praised Poppy, calling it “one of the most impressive, kind of new brands that I can think of in a long, long time.” He told attendees at the beverage conference that the brand’s taste, accessibility to different age groups, health focus and a fun/cool vibe are behind its rapid ascension in the beverage sector.
Poppy has also reached the “kind of scale” with its sales that would make it an acquisition target for a larger beverage company, Ottenstein added.
Texas-based Poppi was created by Ellsworth and her husband Stephen in their kitchen after she experienced gut problems. She found apple cider vinegar improved her health conditions, but it “tasted horrible.”
The pair eventually used apple cider vinegar, along with fruit juice and prebiotics, for their soda. Their first product debuted in March 2020 during the height of the pandemic. It quickly caught on due to its healthy halo, online presence and consumer interest at the time in pantry loading.
As people look to curtail their sugar intake, and increase their consumption of better-for-you offerings and products that contain functional ingredients, brands such as Poppi and Oligpop have thrived. Each Poppi can has about 25 calories or fewer and 5 grams of sugar or less. A serving of Coca-Cola has 240 calories and 65 grams of sugar.
Soft drink sales in the United States this year are forecast at $110 billion, according to Statista, providing Poppi and similar brands with an opportunity to attract consumers who enjoy soda but are looking to improve what they eat and drink.
“Soda is a huge category. And up until that point [that we reached the market,] there was really no other option,” Ellsworth said. “It was the right product at the right time with the right community.”
Poppi currently sells a dozen flavors. It plans to introduce new flavors, she said, but will be selective when it does. Instead, it will prioritize selling larger multi-packs for individuals who regularly consume the brand and build on its recent expansion into Canada and Mexico.
“We have this soda that tastes amazing, the story’s amazing,” Ellsworth said. Our goal is to “revolutionize soda for the next generation.”
Source: fooddive.com