Fact
In beverage, only three companies can buy you, and you can grow too big for them
Allison Ellsworth explains that a beverage brand's realistic acquirers are Keurig Dr Pepper, PepsiCo and Coca-Cola. A brand that grows too big to be bought has to IPO without a distribution partner. Celsius is the exception: it went public with Pepsi as its distributor and a minority holder.
“You can get too big to be bought, and then you're forced to go IPO. And within a beverage, that's not great because then you don't have a distribution partner. And so you're looking at who can be a great distribution partner. There's only 3 people that can buy you, which is Keurig Dr Pepper, Pepsi, and Coke.”
Story
Poppi went silent on Pepsi for a year, then sold after passing $500M in revenue
PepsiCo floated an early offer, and Poppi cut off contact for over a year. After passing $500M in revenue, the founders reopened talks, reasoning that fewer buyers can afford a $1B company. Pepsi bought 100% (not a two-step earnout deal) and diligence took about 6 weeks. 99.9% of employees held equity.
“we should probably reignite some of these conversations because it's a lot easier to, you know, buy a $500 million company than a billion-dollar company, and there's less buyers, and it's a whole thing. And look, we're having these conversations, and it's always about timing, And Pepsi came to us and they're like, hey, we see what's happening here. This is incredible. I know we haven't talked in a year, but we wanna reengage the conversation.”
Steal thisTurn down the early offer, keep growing, and reopen talks before you outgrow the buyer pool.
Story
Rohan Oza blew up a $1.6B offer holding out for $2B
Before the Pepsi deal, another acquirer offered Poppi $1.6B. Rohan Oza wanted $2B and threatened to walk out of the room, which killed the deal, but Poppi was already talking to Pepsi. Pepsi eventually paid about $1.95B.
“At one point, there was a company trying to buy us and Rohan, like, they offered us 1.6, he wanted 2, and he would like threaten to get up in the room. It like blew up the whole thing. But it was kind of like we were, we were in talks with Pepsi at the time, so it was like there was like no harm, no foul.”