Gen Z drinks “gut pop,” and legacy soda makers are eager to supply it
Gen Z drinks “gut pop,” and legacy soda makers are eager to supply it
As health-conscious consumers shift away from traditional sugary sodas, major beverage retailers are jumping into the market for prebiotic soft drinks — drinks that contain dietary fibers that feed friendly bacteria in the gut — dominated by startups Olipop and Poppi.
Olipop’s co-founder and CEO announced a $1.8 billion valuation after a new investment round led by J.P. Morgan Private Capital. Coca-Cola has already released a prebiotic soda called Simply Pop, and PepsiCo is planning to enter the market. The prebiotic soda market is growing, particularly among Generation Z, those born between 1997 and 2012.
“Marketplace” host Kai Ryssdal spoke to Laura Cooper of The Wall Street Journal about the growing market for “gut pop.” Below is an edited transcript of their conversation.
Kai Ryssdal: Gut pop. What is this?
Laura Cooper: You’ve probably seen it in the supermarket, maybe walked by it, didn’t know what it was. But they’re prebiotic sodas, so like Olipop and Poppi. A lot of people know Poppi from their two Super Bowl commercials this year and last year, and yeah, Gen Z really enjoys it.
Ryssdal: Clearly I must have just spaced out during those Super Bowl commercials, because I have no memory of them. What are they supposed to do, this prebiotic thing, just to get the biology out of the way?
Cooper: I’m not a doctor, but I spoke to a lot of dieticians and gastroenterologists about this. And so essentially, prebiotic versus probiotic: Probiotic, you might know — kombucha, yogurt, things of that nature. This soda is prebiotic because it contains dietary fibers that feed bacteria already living in your system, and probiotic puts more microbes into your system. This is feeding what’s already inside your body. And when you think about prebiotic soda and any perceived health benefits you could get from that digestive health, people are all in on trying it. So, you know, as opposed to maybe having just a regular Coca-Cola or a Pepsi, people are, they’re still having those, just not as often.
Ryssdal: These things are going to cost me two and a half bucks a piece — did I read that right?
Cooper: It really depends where you’re buying them. But yeah, soda has similar pricing, depending on what you’re buying. There’s actually something at Walmart called “modern soda,” and this falls under that, an aisle where all these drinks live together.
Ryssdal: Coke and Pepsi clearly see this, and they say, “We got to get in on this.”
Cooper: Oh, 100%. I mean, Coca-Cola already put out their first prebiotic soda called Simply Pop. I tried the strawberry at a conference. Very strawberry. It has a lot of juice in it. It also has just things that are different from Olipop and Poppi. I believe it’s Vitamin C for one, and Zinc. So PepsiCo, I believe plans to enter this space as well. It is definitely, you know, it’s picking up steam with Gen Z. And as you know, Gen Z is a share of the market everyone wants to get a piece of.
Ryssdal: Hey, do you drink these things on the regular?
Cooper: I drink soda. I have drank these. I just don’t drink a ton of them, but I’ve tried them all, especially in reporting this, I drank a lot of them and have spoken to a lot of people who are just huge fiends of this.
Ryssdal: A word about the magnitude here. You point out that the co-founder and CEO of Olipop announced a valuation with a new round of investment, puts that company at like, $1.8 billion, which is, I mean, that’s not peanuts.
Cooper: Last month they raised money, I believe it was raised with J.P. Morgan in the lead. So, you know, this is a big business. Is it, Coca-Cola, Pepsi-sized business? Unclear. But Coca-Cola already put out their first prebiotic soda, called Simply Pop, and PepsiCo, I believe, plans to enter this space as well. It’s definitely picking up steam and getting a following. And I think that all the big guys are aware that they want to be involved with this. I wouldn’t be surprised if Dr Pepper was also interested.
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