Soda With (Possible) Benefits

Super Bowl viewers this year may have witnessed the coming of age of an emerging beverage category when they saw the 30-second commercial for poppi prebiotic sodas during the big game in February.

“This will be the last moment you ever think of ‘soda’ as being a dirty word,” the commercial intoned, over images of rows of poppi cans in a store, and people enjoying the carbonated beverage. “That’s because this soda, poppi, has none of the bad stuff.” Phrases like “5 g sugar,” “no fake stuff,” and “prebiotics” came up on the screen. “Instead, it has all the flavor,” the commercial continued. “The future of soda is now, and it’s called poppi.”

But not so fast. Remember that sock puppets and all-electric vehicles were also huge Super Bowl advertising sensations and then soon met various forms of marketplace comeuppance.

“People simply don’t know what is in these drinks,” says Tom Pirko, president of Bevmark, a beverage industry consulting firm. “In our age of nano-attention, when the vast majority of consumers are not interested enough to take a few seconds to read and decipher labels, it might be hopeless to suggest they will ever understand enough to take prebiotic soft drinks seriously and become repeat users.”

For now, prebiotic sodas—which employ inulin and other sources of fiber to help feed beneficial gut bacteria—are a phenomenon. Led by poppi and rival OLIPOP, U.S. sales of a dozen or more prebiotic brands are estimated at $100 million to $150 million, a level that is about triple year-ago sales, by Beverage Marketing Corp.’s calculation.

“This started from the health and wellness craze in vinegars and kombuchas,” says Duane Stanford, editor and publisher of Beverage Digest newsletter. “But they’re soda alternatives marketed like sodas, with colorful packaging, good flavors, tasty, and not with the challenges you might have with drinking vinegar.”

George Squire, business partner and technology lead at strategy and product development firm JPG Resources, adds, “What we’re seeing here is just putting two and two together. Soda is dead; water is key. But what if you could put good stuff in soda and make it relevant again?”

After getting a boost in American public interest from a Shark Tank appearance in 2018, poppi exploded in popularity, and so did OLIPOP. The two differentiate somewhat: poppi’s proposition is more about making soda consumption healthy overall than focusing just on gut health, with just 2 g of soluble fiber per can. OLIPOP offers a more efficacious 9 g of fiber per serving. “That’s a pretty hefty dose” of fiber, Squire says. “You actually should be able to get a therapeutic effect from that.”

But other experts say that prebiotic sodas broadly lack nutritional efficacy. “They’re ineffective from a public health perspective,” says Cathy Kapica, head of the Awegrin Institute for nutrition policy and former head of nutrition for McDonald’s.

“Fibers in formulation have little promise for being more than marketing hype, although you can see why beverage companies want to tap into the interest in gut health,” says Kapica.

Another drag on the new category is high price points: poppi and OLIPOP retail for $2 to $3 a can versus only one-third or one-quarter of that price for a typical can of soda.

“The drinks are currently too expensive [and] too specialized an offering to attract other than Whole Foods patrons,” says Pirko. “In the beverage business, small and undercapitalized brands are normally doomed to fail.”

Indeed, experts believe that existing beverage titans will ultimately determine the fate of the prebiotic soda category. Coca-Cola was pursuing an acquisition of poppi early this year, sources told Bloomberg News. But Pirko, who has regularly advised Coca-Cola and PepsiCo, believes PepsiCo is more likely to move on prebiotic sodas. “Its culture is more focused on the rapidly changing environment,” he says, and the company pays “careful attention to health-related messages.”ft