From Coca-Cola to local Canadian brewers, the prebiotic soda industry is booming. Here's why
CBC
Coca Cola is introducing a line of prebiotic sodas, marking the legacy beverage brand's first foray into the "functional" soft drink market led by upstarts Olipop and Poppi — and further tightening competition as more Canadian brands launch their versions of the fizzy drinks.
The company announced on Tuesday that it would introduce the sodas, called Simply Pop, which it said will have prebiotic ingredients aimed at digestive health. They'll first be available in the U.S. before expanding to other markets later this year.
Prebiotic sodas usually pair low-sugar and high-fibre content with ingredients meant to promote gut health — similar to kombucha and other fermented drinks. They're referred to as "functional" because they're sold as a wellness product, though some health professionals have tempered expectations of their health benefits.
Olipop co-founder and CEO Ben Goodwin said in a statement shared with CBC News that it was validating to see the "modern soda category" had gone mainstream, and would have a bright future with Coca-Cola entering the market.
"It's a massive honour that the largest soda brand in the world has decided that the category … is a great place for them to seek growth," Goodwin said.
Coca-Cola, which will launch the sodas in three flavours, is making its entry into a market thirsty for younger drinkers and people opting out of alcohol. But even as the beverage giant goes probiotic, smaller Canadian brands are intent on carving out their own niche.
The prebiotic soda market is dominated by California company Olipop and its Texas-based competitor, Poppi. The latter was founded when its creators made a 2018 appearance on the business pitch reality show Shark Tank. Both brands have grown exponentially since then: Olipop was most recently valued at $1.85 billion US, while Poppi claims it made over $100 million US in sales in 2023. A spokesperson for Poppi had no comment in response to Coke's announcement.
Coca-Cola, for its part, thinks the overall category could generate $2 billion US in sales before 2030. Its research showed that Gen-Z and millennial consumers in particular "were really interested in juice and prebiotic sodas," said Becca Kerr, chief executive of nutrition at The Coca-Cola Company, in a news release.
"Since many brands in this category are new, they were looking to align with names they know and trust for both quality and taste. This was particularly true for those curious about prebiotic sodas but who hadn't yet taken the leap," she said.
Many consumers are trying to drink less pop and soda, but are still looking for fizzy alternatives with a health component, said Aleena Mazhar Kuzma, senior vice-president, managing director and partner at Toronto marketing agency FUSE Create.
There hasn't yet been consensus on the positive health benefits of these drinks, but experts say they generally don't do harm, which is why some consumers say they enjoy them as a guilt-free treat in moderation.
However, Poppi is currently facing a class-action lawsuit from a consumer who says the company's drinks aren't as "gut-healthy" as its marketing would have consumers believe, and that the increased sugar consumption that would come with regularly drinking its products outweighs the benefits of its prebiotic fibre ingredients.
Meanwhile, young adults in Canada are drinking less alcohol, according to Statistics Canada, and Gen Z is particular isn't imbibing as much as the generations before them. Studies conducted in the U.S. have shown similar patterns. Beverage retailers like Poppi, Olipop and sparkling water brand Bubly are skewing their products to a younger audience by branding their drinks as "bright and vibrant and fun, but also kind of functional," said Kuzma.
That demographic is "reaching for something that is fun to drink, but isn't going to compromise their health objectives," she said.
