PepsiCo announced on Monday its acquisition of prebiotic soda brand Poppi for $1.95 billion, a strategic move to cement its presence in the fast-growing functional drinks market. The deal, which includes $300 million in anticipated cash tax benefits, reduces the net purchase price to $1.65 billion, aligning with PepsiCo’s push toward healthier, consumer-driven beverage options.

“Consumers are seeking convenient, great-tasting choices that match their health and wellness priorities,” PepsiCo Chairman and CEO Ramon Laguarta said, framing the buy as a response to shifting tastes. Poppi, founded in 2015 by Allison Ellsworth in Austin, Texas, blends fruit juices, apple cider vinegar, sparkling water, and prebiotics into a low-sugar soda. Initially sold as Mother Beverage at farmers’ markets, it skyrocketed after a 2018 “Shark Tank” pitch secured investment from Rohan Oza of CAVU Consumer Partners, sparking a rebrand to the vibrant Poppi.

Ellsworth hailed the partnership, stating, “With PepsiCo, we’ll bring Poppi to more people while preserving its essence and fueling innovation.” Oza echoed her enthusiasm, noting the deal’s potential to globalize the brand. Poppi’s retail sales surged 122% in the 12 weeks ending February 22, per BNP Paribas, capturing a 1% share of the U.S. carbonated drinks market.

The acquisition comes amid challenges, including a class-action lawsuit filed last summer questioning Poppi’s gut-health claims—a hiccup in its meteoric rise. Still, PepsiCo’s move mirrors industry trends, with rivals like Coca-Cola launching Simply Pop and snapping up wellness brands to combat declining traditional soda sales. As PepsiCo integrates Poppi into its $92 billion portfolio—including Lay’s, Gatorade, and SodaStream—the deal positions it to capitalize on the prebiotic soda wave, blending health trends with its commercial muscle.