In a nod to shifting consumer preferences toward health and wellness, PepsiCo is spending $1.95 billion to acquire Poppi, a rapidly growing prebiotic soda brand.

Functional beverages are popping: Adding Poppi to its portfolio will enable PepsiCo to capitalize on the growing demand for functional beverages, positioning itself to meet the needs of a new generation of consumers seeking healthier drink options. Other major beverage companies have moved in a similar direction: Coca-Cola recently launched a prebiotic soda line under its Simply brand, indicating a competitive landscape in the functional beverage sector.

"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," PepsiCo's Chairman and CEO, Ramon Laguarta, said in a statement announcing the deal. "Poppi is a great complement to our portfolio transformation efforts to meet these needs."

Shark Tank origins: Founded in 2017 by Allison and Stephen Ellsworth, Poppi began as Mother Beverage, offering apple cider vinegar-based drinks at local farmers' markets in Austin, Texas. The brand gained significant attention after the founders appeared on the television show "Shark Tank" in 2018, securing a $400,000 investment from Rohan Oza.

Poppi's portfolio: The Shark Tank investment facilitated a rebranding to Poppi in 2020, aiming to appeal to a broader, health-conscious audience. Poppi's product line features sodas infused with prebiotics, fruit juice, and apple cider vinegar, offering low-calorie beverages with no more than five grams of sugar per serving.