Russell Westbrook, Halsey and The Chainsmokers are among the many celebrities investing in Poppi, an emerging prebiotic soda brand, that garnered $13.5 million in a Series A2 funding round led by a slew of elite athletes, musicians and social media stars. So, what made this up-and-coming soda brand so attractive for celebrity investors and how does it differentiate itself from other better-for-you beverages?
Poppi’s Startup Story
Like many food startups, Poppi was founded out of necessity and lack of alternatives on the market. The brand launched in 2020 by husband-and-wife team Stephen and Allison Ellsworth after she began having stomach issues a few years prior. With little help from medical professionals, she turned to the Internet for crowdsourced solutions and found that prebiotic-rich food and drinks could play a large part in her healing.
Allison turned to apple cider vinegar (ACV) to help with her stomach issues, but its strong odor and flavor made it difficult for her to drink it straight on a daily basis. Instead, she began experimenting with ACV in the kitchen, formulating drinks that would help her tolerate the Poppi’s vinegar but also boast a flavorful taste. From there, Poppi was born.
The duo began selling the drink at a Dallas farmers market, where they were approached to sell Poppi in Whole Foods Market. Once quitting their jobs as oil and gas researchers, the pair pursued the business full-time and appeared on Shark Tank where they secured a $400,000 deal from CAVU Ventures co-founder Rohan Oza in late 2018. With the latest round of funding, Poppi has raised a total of $13.8 million.
The Functional Soda Market
In order to make the drink palatable, each can of Poppi contains about a tablespoon of ACV, sparkling water, real fruit juice and plant-based sweeteners. The formula provides a balance of gut-friendly prebiotics known to aid in digestion and delivers other benefits, like enhancing immunity and healthy skin. The drinks come in nine flavors, including Strawberry Lemon, Watermelon, Orange and Raspberry Rose.
The drinks cost $2.49 per can and can be found in over 7,500 retail locations, including Target, Kroger and Publix as well as online at Amazon.com. So how does its nutritional profile and price-point compare to other competitors on the market?
The low sugar content and colorful cans help the brand stand out among its competitors, which include Olipop, a high-fiber soda that also contains prebiotics. Within the functional soda category, which has grown 465 percent year-over-year based on data from research company SPINS, Poppi boasts its annual growth put it in the top spot based on four-week data ending June 13, 2021.
According to market research from Packaged Facts, millennial and Gen Z-aged consumers are willing to spend more money for high-quality prebiotic beverages, which aligns with Poppi’s consumer base. The Ellsworths told Food Navigator that the brand is pulling from the kombucha-, sparkling water- and lapsed soda-drinking consumers, as well as those that did not grow up on soda.
The functional soda market will likely continue to grow in popularity as consumers reach for healthier drinks, and Poppi is hoping to be a part of it. As consumers continue to learn about the benefits of prebiotics, they will drive the demand for functional beverages containing them. Redesigning classic drinks like water, juices, energy drinks and milk alternatives will be key in promoting beverages meant to improve gut health.