Poppi outspent Gatorade & Dr. Pepper on advertising
Poppi, a popular alternative to major beverage brands, ramped up its advertising spending exponentially over the past year, outspending some of those very same players it intends to rival, according to a new report. This comes as it faces scrutiny over its claimed health benefits.
Poppi spent more than $43 million on advertising from January to April, nearly six times the $7.3 million it spent for all of 2023, according to a new study from ad intelligence platform MediaRadar. Meanwhile, according to MediaRadar, Gatorade spent $40 million and Dr. Pepper spent $32 million and only Coca-Cola and Red Bull spent more, at $78 million and $60 million, respectively. Most of Poppi’s advertising during that period was focused on television ads and digital channels, with the company spending more than $25 million on TV and $18 million on digital ads.
Poppi and Olipop were among the fastest-growing CPG brands in 2023, only topped by Prime and Feastables, according to Numerator, a division of Kantar.
“These are two of the most important brands in food and beverage right now; they’re just driving a lot of growth for retailers, and I think you’re going to see them in food service in many interesting ways,” said Barry Thomas, a former longtime Coca-Cola executive who is now a senior global thought leader for Kantar. “They’re just so wired into Gen Z, they’re so digitally native with how they go to market and they’re radically changing CPG.”
He said the more traditional food and beverage companies are recoding their marketing playbooks based on challenger brands like Poppi and that he expects one or two of them to launch a competing Gen Z and health-centered soda.
“It’s just such a new day, really in the last five years, with these challenger brands. That footprint that they have digitally and on social media, gosh it resonates,” Thomas said. “It’s so different than the traditional legacy marketing that happens at these big Fortune 500 companies.”
The Austin, Texas-based soda brand has led a bevy of new soda startups that have flooded the market claiming to be healthier than household names like Coke and Pepsi, launching TV ads and even sponsoring pickleball leagues. Poppi launched its first 30-second streaming TV commercial on Hulu titled “Soda’s Back” last year, hoping to target people who have long avoided soda out of health concerns.
As the brand’s popularity rose, so did scrutiny of its health claims. Poppi has said it provides gut health benefits by combining prebiotics and natural flavors, but a former customer filed a class-action lawsuit against the company in late May, claiming that a can of the soda doesn’t contain enough of the fiber inulin to benefit the digestive system. Because MediaRadar’s figures are only through April, prior to the lawsuit, it’s unclear whether the company has increased or decreased its ad spending since the claims were made.
“With lawsuits calling into question just how healthy it is, and with how much they have already invested this year, it will be interesting to see how much this affects their creative messaging and ad spend numbers, and if it tapers off by year’s end,” Todd Krizelman, CEO and founder of MediaRadar, said in a news release.
In a statement provided by Poppi’s director of PR and communication Farial Moss, the company said its advertising strategy is unaffected by the lawsuit. “We have built sustainable brand momentum, and we remain committed to delivering a better-for-you soda to consumers,” the company said. “This is a baseless lawsuit, and we are vigorously defending against these allegations.”
Poppi’s large media investment may have also helped boost its competitor, Olipop. The two brands push a similar message: Poppi with “the future of soda is now” and Olipop with “a new kind of soda.” Carly Sutherland, a brand and consumer experience strategy consultant, said Poppi seems to have a brand distinction problem next to the other alternative-soda brands. “A scan of both brands’ messaging, owned channels and performance marketing ads illustrates they are practically mirroring each other,” Sutherland said in an email.
Google Trends shows searches for “Olipop lawsuit” spiked in June, when the Poppi lawsuit gained attention, potentially signaling that customers aren’t distinguishing between the two brands and may have searched for Olipop when they meant to search for Poppi. “Once both brands have collectively changed consumer soda preference/behavior, they’ll need to prioritize distinguishing themselves from one another,” Sutherland said.
Kantar’s Thomas said he doesn’t know if the lawsuit would convince consumers who already drink Poppi and Olipop to stop. “These are consumers that are looking for a functional, healthy soda, and those are two that fit that need, regardless of how this may play out in the courts.”