Poppi gut health lawsuit—marketing experts on what’s at stake

A class-action lawsuit alleging Poppi made false and misleading claims about its “gut health” benefits could damage the health halo around one of the beverage industry’s biggest success stories. But the soda brand might be able to limit harm since it has already pivoted its marketing to move away from overt health claims, leaning more into lifestyle. The lawsuit, filed last week in U.S. District Court in San Francisco, alleges that a person would have to consume four cans of the prebiotic soda in a day to realize any gut-health benefits—at which point the consumption of sugar would offset those benefits. Poppi “concealed” this information, the suit added, in violation of California’s false advertising code. The suit was filed by San Fransico resident Kristin Cobb. Poppi called the lawsuit “baseless” in a statement and said it would “vigorously defend” itself. Check out the latest Ad Age events and award programs With origins as an apple cider vinegar beverage meant as a home remedy for a variety of ailments in 2015, Poppi took off following a “Shark Tank” investment from beverage entrepreneur Rohan Oza in 2018. Its marketing later went viral on TikTok, where it became the preferred soda brand among many young consumers. Poppi is the largest among a group of fruity challenger soda brands that highlight prebiotic or probiotic formulas, including Olipop, Culture Pop, Wildwonder and Turveda. Despite the boom in such functional sodas, there is some debate regarding their actual health benefits. Also read: Behind the rise of Poppi Olipop has nine grams of dietary fiber per can vs. Poppi, which contains two grams. “Olipop was founded on a commitment to setting a high standard in functional soda,” Ben Goodwin, co-founder and CEO of Olipop, said in a statement. He added that Olipop’s gut-health benefits have been independently researched and earned the NutraStrong Prebiotic-Verified product certification. Tens of millions of Americans can have their insurance companies reimburse them for what they spend on Olipop through “‘food as medicine’ benefits,” he said. The rapid growth of functional foods has come with inadequate checks on their claims, according to a marketing executive familiar with the beverage industry. “I think there’s challenges in the CPG space as a whole with overclaiming,” the executive said. “The functional beverage space has grown so rapidly in the last three years. ... It’s taken a long time for the FDA to catch up and police some of these facts and nomenclatures and selling points these brands are pushing.” That said, the executive feels Poppi can still consider itself a better-for-you brand, given it has lower sugar and lower calorie count than mainstream soda brands. Poppi drinks have 25 or fewer calories and 5 grams of sugar in a 12-ounce can. A full-sugar Pepsi has 150 calories and 41 grams of sugar; Coke has 140 calories and 39 grams of sugar. While gut health remains a part of its marketing message in the U.S., Poppi recently has been soft-pedaling the health aspect and emphasizing lifestyle. It recently launched without any gut-health messaging in Canada, where such claims are not permitted. John Craven, CEO of the beverage industry publication BevNet, described seeing Oza speak at a recent industry event in Los Angeles. “He was talking about how they realized it’s just easier to sell people on fun. Those were literally his words,” Craven said. “You can kind of connect the dots to where gut health is not fun.” The brand’s cautiousness was arguably visible in its Super Bowl ad, which made no overt health claims but instead contrasted Poppi with sodas that are “bad for you,” highlighting its formulation of prebiotics, low sugar and no artificial ingredients. The agency Virtue Worldwide was behind the spot. “It didn’t feel like they were trying to cram gut-health down anyone’s throat,” said Craven of Poppi’s Super Bowl ad. “It seemed like they wanted to make a Coke-style commercial, with people having fun.” Encountering lawsuits was “rite of passage” for growing beverage companies, particularly those generating acquisition interest like Poppi, according to Craven “The folks filing this suit probably expected that Poppi would have reason to make this go away with a settlement,” Craven said. “That’s the pattern we usually see with these things.” For the potential acquirers, it won’t likely matter. “Big Soda doesn’t care about this either,” Craven said. “They care about having a next-gen soda that can appeal where they have [customer] gaps.” Poppi provided Ad Age with the following statement: “We are proud of the Poppi brand and stand behind our products. We are on a mission to revolutionize soda for the next generation of soda drinkers, and we have diligently innovated to provide a tasting experience that millions of people have come to enjoy. We believe the lawsuit is baseless, and we will vigorously defend against these allegations.”

Poppi gut health lawsuit—marketing experts on what’s at stake

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