Pepsi is making a bold bet that prebiotic sodas are here to stay

CNN

3 days ago

As younger drinkers shun traditional soda brands for gut-friendly alternatives, PepsiCo is hoping to lure them back with its iconic cola flavor.
On Monday, the company is unveiling a healthier version of its flagship flavor called 'Pepsi Prebiotic Cola.' The permanent addition to its lineup builds off its acquisition of prebiotic soda brand Poppi, further entrenching itself in the fast-growing 'better-for-you' trend that's been a hit with Gen Z.
The new soda is a 'reimagining what a traditional cola is for the changing consumer needs,' Ram Krishnan, CEO of PepsiCo's US beverage portfolio, told CNN. 'This is the natural evolution of what's next.'
Pepsi hopes the new version reignites interest with the roughly 120-year-old cola flavor, which Krishnan said has fallen out of favor as consumers are increasingly buying sparkling waters and hydration drinks.
A can of Pepsi Prebiotic Cola shares similar traits to Poppi, including having no artificial sweeteners, the same amount of sugar (5 grams of cane sugar), and roughly the same number of calories (30) and 3 grams of prebiotic fibers — an enhancement that has propelled the modern soda category to $1.8 billion, according to research firm Circana.
The new soda, which comes in original and cherry vanilla flavors, will first be sold online starting on Black Friday in November before rolling out to major retailers in February 2026. Prices for a 12-ounce can and an 8-pack of 12-ounce cans will be slightly higher than a traditional Pepsi and more aligned with Poppi's premium positioning.
Consumers are drinking the traditional cola flavor less often, which poses a problem for a company that's built itself around just that.
Over the past two years, the average number of times a consumer drinks the traditional cola flavor has dropped from 9.4 times each month to 7.7, Krishnan said, citing research from consumer insight firm Kantar.
Diet colas are falling out of favor even faster — showing a 27% decrease in consumption over the past three years — with Gen Z drinkers consuming the flavor substantially less than their older counterparts, he said.
Although Poppi has a cola flavor, Krishnan revealed the brand is having more success with its fruity flavors, leaving the door open for Pepsi.
'That's the problem to solve for us: No one's doing much to retain a lot of these consumer cohorts who are leaving for other options,' he told CNN.
Another demographic PepsiCo hopes to attract is Gen Z drinkers who buy 'better-for-you' beverage brands such as Olipop and Poppi but haven't tried Pepsi. Krishnan hopes they can be enticed with this new version that has the distinct Pepsi flavor.
'We think both of these complement each other because it addresses both ends of the spectrum,' he said. 'Poppi is the original modern soda category leader and then Pepsi is one of the founding fathers of cola.'
As for Poppi, Krishnan said the company is still operating separately. But Poppi's availability will be supercharged in September when it's integrated with PepsiCo's distribution system, giving the brand access to thousands of more locations, including restaurants, travel outlets and colleges, he revealed.
Launching a permanent flavor without trialing it has its risks. Coca-Cola learned that the hard way last year after its much-hyped Spiced flavor failed to resonate with consumers and was discontinued just six months after its splashy debut.
However, adding another healthier-aimed soda to Pepsi's beverage portfolio could spur sales. In its second quarter earnings report last week, PepsiCo (PEP) reported that North American volumes dipped 2% across its beverage unit. Its low-calorie sodas like Zero Sugar and Wild Cherry Zero were among the bright spots for the company.
Nate Rosen, editor-in-chief of consumer brands-focused newsletter Express Checkout, questions why PepsiCo is launching the new Pepsi when it owns Poppi, which has a young following and helped establish the modern soda category. However, he thinks the two brands can coexist.
'This prebiotic version is banking heavily on the Pepsi brand recognition, but it feels more like a defensive 'me-too'-type product,' Rosen told CNN. 'Poppi remains the clear winner in the 'better-for-you' soda category. It has the credibility and positioning that a 'healthified' Pepsi will struggle to match.'