Poppi to PepsiCo: Building a $2B soda brand the industry couldn't ignore

25:48It's all over the news. And we all got together via Zoom that week and we decided we still need to launch this brand. and we had loaded into Amazon and we said we're going for it. So we ended up launching Poppy like March 3rd, 2020, the first week of COVID. And it was the best decision to go forward with that because it forced us to think differently from the beginning. We had to like literally throw the entire playbook out the window of what anyone had ever done before. We had to, how do we talk to our consumer digitally? How do we show up and get people to try a new product that they're not in the grocery store, right?

26:26You have to lean into Amazon and the Instacarts and the dot-coms of the world, target.com, walmart.com. And I look back on that and just force us to, I think why we grew so quick is because of that. Because usually if you're a better for you product, you will get really big in Miami, New York, LA, and you'll do a lot of in real life events and sampling and you're doing all of these things. Well, you'll be a better for you product then you slowly work your way into middle America. Well, Soda is middle America. And so we were marketing digitally, which meant there was no zip codes. Everybody was hearing about us, which we maybe wouldn't have really invested in until year two.

27:05So it allowed us to have some of our best performing stores in Fargo, North Dakota, Cincinnati, Ohio, Houston, Texas. And it was just such a movement of growth so quick that it was really fun to see that we could really build a brand digitally. Really bucking the trend there. And this actually transitions really well because I was going to say a year later, another big moment came when you posted a TikTok video sharing Poppy's origin story, which totally went viral. I've read reports that it generated$100 ,000 in sales within 24 hours. Is that right? Yeah, just on Amazon. And like the grocery store shelves were like cleared.

27:41It was crazy. What do you think specifically helped that take off? I think back then TikTok was the wild, wild west. And no brands were on there and especially brands doing founder content. And so I had some creators that were friends and they're like, just get on there and try it. Like, what's the harm? And I remember everyone telling me it was a really stupid idea and like I shouldn't be wasting my time on it. And I was like, OK, I'll do it nights and weekends. Like, I hear you. I won't take resources. I'll do it. And I was I remember making taco recipe videos. I remember dancing. I remember just like being goofy.

28:15And really what worked is me just sitting down one night and telling my founding story and why I started Poppy and how I had five grams of sugar and prebiotics and that I was nine months pregnant on Shark Tank and just hit post. And it was just me being so authentic and real. And it changed the entire trajectory of how Poppy operated. We started leaning into TikTok from that day going forward from a paid perspective. So organic posting plus paid. I spent so much time during the week creating content. Um, we used it as such an incredible driver to grow our email and SMS list. So we'd run ads on TikTok.

28:52It would drive people to our website. Then they would actually go to our website, go check out on Amazon. So it was like this interesting loop. So we were able to grow our email SMS list to like a million in just a year. And it just was so cool to open up this hacky new way of marketing. But I will say everybody is doing that now. And everyone's like, well, what is that success? Could I do that again? Yes, you do need to do that. I do think if you're a founder and you're not online talking about your product, your competitor is. So you do need to do it. But I think it's now and. Because going viral on these platforms, even Meta and TikTok and all of these things, it's just really hard without a paid strategy.

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30:14These shorts keep you locked in for miles with distraction-free storage and a waistband that doesn't budge. They might just be the shortcut to your summer goals. Shop the Shake It Out shorts now at lululemon.com. No, it's so fascinating, and I think it has truly evolved over time, but do you think it was that continued storytelling and kind of like that rawness that helped you guys really take off? And it sounds like it might have become even the biggest growth driver for you at the time, would you say, or one of the biggest? I would say a combination of that and working with creators and influencers.

30:47And I think it just went really well together because they were on the platforms talking about it. I was on the platforms talking about it. We did a ton of gifting. We had an unlimited like gifting budget, but we just really built community grassroots, like real people. I remember just we had a really interesting paid strategy where we would put paid behind just regular moms posting content. You didn't have to be a creator. We'd reach out like, hey, can we pay you to be to run paid against this? It's just an incredible piece of content. And so it's just real people posting. It didn't have to be some fancy, you know, Alex Earl or something like that.

31:23And I just think that strategy of just that organic, diverse community that really helped that growth. And, you know, speaking of that kind of conversation you had with yourself before you filmed that first video, I think I did see a clip of you talking about how as a founder, you often have to do really embarrassing things. Can you talk more about what you mean by that? Yeah. So the quote is embarrassment is the most underexplored emotion when it comes to success and how you have to be willing to go out and make a fool of yourself if you want to be successful in life. And yes, that can be online, but that can also be making a fool yourself standing at a farmer's market saying, hey, do you want to drink this apple cider vinegar?

32:05Like, that's so embarrassing. Or, you know, like going into retailers and not really knowing your numbers, but faking it till you make it. Right. So there's so much embarrassment that comes through success that so many people don't talk about those moments. and so that's kind of what I meant of I think people get really comfortable in like what they know and they don't put themselves out there and I think if you're an entrepreneur and you're doing something you've already really gone out there why not just go all in and that's why like you do have to be online you do have to think differently you do have to be risky and a lot of the things because to break through nowadays it's extremely hard definitely well poppy is known for its following among Gen Z and millennial consumers.

32:50And one thing that you often talk about is moving at the speed of culture. You've referenced a so-called black ops budget, which is really, really interesting. Can you explain what that really is and how you tried to think about it when you were leading Bran? You know, there's just cultural temples in society. Right now, you know, it's festival season. So you've got your Coachellas, you've got your stagecoaches. activate there however you can. Our first year we did, we couldn't afford to do a Coachella house. So you know what we did is we paid all of the creators that were already going to do Get Ready With Me.

33:28So Get Ready With Me while I go to Coachella and drink my poppy and tell you why. So it looked like we were everywhere in every house, but we actually just were paying the creators, right? So there's ways you can hack these cultural moments where it's like different stages of budget within your company. And you can't not everyone can afford to do all of those activations all at once. Another big cultural moment is Love Island during the summer. And so, you know, how do we work with them to create memes? And we did an Amaya papaya flavor last summer. And we started from a social postage of a meme, right?

34:04To allow us to move and do cultural moments, you can't have your entire budget allocated throughout the year. So when we talk about a black ops budget, it's allowing us to really, it's a budget put aside to allow us to jump on cultural trends and be opportunistic because a lot of opportunities came our way. And sometimes we didn't see the total return right away. You know, if Chapel Rhone calls us and says, hey, we need Poppy at our birthday, we make that happen knowing we might not see a single post from that until two years later, she calls and says, I want you guys in our music video. That is long term brand building, just like trusting the process.

34:44And it's really hard for people to do that and to like trust and to invest in it and not be able to track the immediate return on your investment. Right. People are always like, oh, well, what's the conversion on that? What's the ROI? And like, I think it's interesting because you're looking at it as like, well, this is about awareness more than anything else. Yeah. Brand awareness was our number one KPI for the first three, four years of business. 100%. I just mentioned to you off cam that we had Chriselle Lim on the show this week. And we talked about influencers and ownership and that landmark deal between Poppy and Alex Earl, who for those who don't know, is a huge influencer who originally broke out on TikTok as a star there.

35:23A couple of years back, you made headlines for kind of structuring that partnership, let's say a little differently, right, from the traditional influencer deal because it included equity. What was the thinking behind this, Allison? And do you see it becoming more of the norm going forward? We were pretty early on, even just before Alex, we did like an incredible advisory deal with like Olivia Munn. And it was really successful for us because we saw she overly posted us. We saw showing up in her stories from, you know, just on vacation. And it's because she had invested in the brand and we were giving her equity.

36:00So she was like an owner of the brand. And it was just really eye opening for us of like how much they felt like they were part of the journey. When you do this equity plus investment strategy and people think that, you know, it's really hard to give up equity as a founder. I'm a big fan of giving up equity. We gave every employee at Poppy equity. We were really big on advisory agreements and surrounding us with people around us. So it was just a really familiar thing that we did. And it wasn't just me deciding this. It was the board and senior leadership. And so when it was time to work with Alex and really structure that deal, she had been posting us since college and we were growing with her and seeing all of her growth and just knowing that she was such a star and we wanted to be part of her journey.

36:49And it was so authentic. That's the biggest thing is she loved Poppy. She was authentic to the brand. It just worked really well. And so we would pay her. She's invested, there was equity, there's advisory. It doesn't have to be like a one size fits all. You have to kind of figure out what works for that talent, if that makes sense. That is incredible. I had no idea that you guys gave it to every single employee. That is extremely rare. You know, even like you said, for founders to want to give that up, because everybody knows that like, sometimes you kind of have to, if you want to attract the best talent.

37:22But it sounds like there was no struggle there for you, which is remarkable. And I don't think we knew it at the beginning. So like the first year, we didn't really think about it. Nobody had equity. And then it got to the point where we started bringing in senior leadership that had seen that structure at other companies. So we issued the shares to everybody at that time. And we created like a structure depending on the level that you were at. And if you say went from a coordinator to a manager, we would up your equity depending on how that structure was. And I love it because we made, I think over 44 people millionaires.

37:59People bought houses, they paid off their cars and their student loans. And I, you know, we had people calling us and in tears that we had changed their lives. And it's like, they built that with me. I get a lot of credit for a lot of work other people did. I just happened to be the face of Poppy. But there's 250 people behind me keeping that engine roaring. And I couldn't do it without him. So why not give back where we could? I love that story. And it's something I don't feel like gets talked about enough when it comes to Poppy. And it sounds like it's from that exit, by the way, the millionaire was from the exit.

38:33And, you know, I say everyone at Poppy was like 99.99%. If you were if we were we were in the process, we were talking to Pepsi and we knew we were going to sell. We'd had to stop issuing shares. And so there were some people that kind of came in the last few months and didn't get it, which makes sense. They weren't part of the build. Right. They shouldn't have really gotten the upside of that, which makes total sense. We even had two employees start the day we announced the sale. Could you imagine the look on their face? They coming into a poppy and then being like, just kidding, we're selling to Pepsi.

39:02But yeah, they're both still there and they're thriving. Well, let's talk about the industry because poppy and the brand Olipop are often grouped together as pioneers of the so-called prebiotic soda category. I'm curious to know how you thought about differentiation as the space started to get more crowded and what you focused on to stand out. Me and our poppy and Ollie pop needed each other. Think of Coke versus Pepsi. We were the modern soda wars. And what it created since we were both on the rise at the same time was double awareness for a category of modern soda, functional pop, prebiotic soda.

39:44it was actually easier that we were doing it together even if they hated us or we hated them there was a rivalry you know like all of that fun stuff it's true like even if we don't have to like each other we needed each other because I talked about they didn't know where to put us on the shelf the funniest thing us and Ollipop never sat next to each other on the shelf they were in the cold set we were in the shelf stable set so for five years we actually never sat next to each other but everyone put us against each other but it was totally okay because we were as double awareness for a new category that we were both building to a billion dollar category.

40:17And the beauty is we were the first two movers and shakers of that category. So we own still to this day, like 98 % of the category. So everyone's seen all these new sodas launching and emerging, but it's sub 5%. It's really not affecting our business. And so, you know, I'm here for it. I'm here for the entrepreneurial dream and that I can inspire. But I will say that movement has passed. It's you look at like kombucha, you look at sparkling water. There's these moments where they have their moments, but then they die. So go find out what the next movement is. I always say I have like 13 people saying they're trying to start a healthy soda.

41:00I'm like, it's been done. Right. Well, speaking of that confidence, by the way, you've described how years ago you would say you wanted Poppy to be the number one soda brand, period. And people would like correct you and be like, you mean the number one healthier, better for you soda brand? Have you always kind of, we've kind of touched on this, but have you always had that outlook with such strong conviction, you know, not caring what people think essentially, because going after industry behemoths that have essentially been this longstanding duopoly, that's really rare. I think having that challenger mindset, it's actually really fun, right?

41:38Where you're disrupting a category that hasn't ever been disrupted, by the way. Everyone is trying to disrupt soda for the last hundred years. Kombucha tried it, Sparkly Water tried it. Nobody could really break through. So then to finally be the brand that gets there and breaks through and is really revolutionizing soda for the next generation is really exciting. Like it gives you like a little fire in your belly to give you the liberty to think that way, act that way. But I will say something that we did at Poppy that was really good is we were always very respectful. So when Olipop would hit at us with like a rude comment or trying to get us into some like online war of debate, we never engaged in those conversations.

42:23Same thing with just like there's so many internet trolls. We just did not engage with that stuff because we were so focused on our mission. And I think it worked out. Poppy was a very professionalized business. We had a lot of fun outwardly. And you guys saw that online with our creators, influencers, and our creative. But internally, we had the best senior leadership that you could ask for. We had the best team, systems, processes in place. We're a professional company at the end of the day. And I think some people forget that like you have to have both if If you're going to take all this risk, you have to have like true process in the background.

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43:32So imagine. Let's talk about PepsiCo because obviously, you know, this was just a big life event that only happened less than a year ago. You landed one of the biggest exits in this space in years, as we just mentioned, acquired Poppy for$1.95 billion. Did you ever think in your wildest dreams that you were going to have this kind of landmark sale? Well, yes, because I'm a confident queen, but not maybe to this level. I always like why would I be doing and working this hard for nine years of my life and sacrificing everything if I didn't in my head think I was going to be standing there someday.

44:09And I think that's OK. Like you can want to one exit your company and be successful and create generational wealth for your family. Like that is an OK goal to have. It's not selfish and it shouldn't be looked down upon. And in the same vein, I want Poppy to live on to be the soda my kids and grandkids love and know a soda. So there's a balance. There's emotion that kind of goes through that and finding the right partner and when is the right time. And, you know, we we hired on a banker, but we didn't do like a formal process. And who is the right partner to partner with? Like all of those conversations were happening for years.

44:48And when it comes to beverage, you actually have to partner with the strategic for distribution. If we really want to be a global brand, we need someone that has global distribution. So all of these things go back to the professional side of the business to allow us to get Poppy into more hands. To that point, you and Stephen have talked about how you actually built it to sell, in part because there were, I think, legacy contracts in place that prohibited you from going to places like stadiums and college campuses. Is that really what the big unlock was for you as well with regard to PepsiCo? Because who doesn't have distribution as much as PepsiCo or Coke, right?

45:25Right. And some people forget that PepsiCo's also Lays. They're actually a bigger company. And I do think absolutely now we can get into the Jersey Mics of the world and college campuses and the subways and music venues. And those were just totally off limits for us. I mean, we were getting like cease and desist to get off college campuses at one point. And college was like one of our biggest programs and college kids loved us. Right. So I think it was a huge unlock. Also, the distribution, yes, is amazing. But the operational, like who knows how to make soda but Pepsi. So now comes all of these resources with their labs and their innovation and their operational side and the cost savings of the cans.

46:09And there's just so many synergies when it comes to those things that you have to look at. You know, most entrepreneurs dream of this billion dollar exit, the F you money, the chance to sell to a conglomerate. What strikes me, Allison, is that you've been very open about how emotional this process has been for you and the sense of loss you initially felt. I know you have three boys at home. I wonder if you see Poppy as kind of your fourth child. Oh, it's absolutely my fourth child. I have three boys, four, seven and nine. and I always wanted a girl. So Poppy is my girl. And I do see it as that.

46:43And I kind of see Poppy as this kid that's off at college. I'm here to help, but you kind of has to like figure it out on its own. And I'm here to like advise and kind of be there, but it has been very emotional. It's something you're working towards for so long to then hand off. You know, I don't think anyone really prepares you for that. And of course people say, oh, poor girl, she sold her company and she's sad. I'm human at the end of the day. And it's okay to have these conversations. But the difference is, is I did something about it. I got a business coach, I had conversations, I cried, you know, like, you have to work through those emotions.

47:20And I am the happiest I've ever been right now in my life, because Poppy is doing great. We're about a year, we've, I've get to spend more time with my kids. I'm getting to do incredible stuff like we're doing here today. I was a shark on Shark Tank this season. You know, like there's so many other opportunities that I wouldn't have been able to do if I was still in the weeds working at Poppy. And absolutely, I cannot wait to do something again. We're already working on other projects. So stay tuned. I was going to say anything you can tease? No, I mean, nothing I can tease yet. We're not quite ready to talk about it, but we're definitely there's something in the works.

47:59OK, we will stay tuned. Watch this space. You know, one thing that was really interesting was I just felt like I try to put myself in your shoes after reading about all the headlines. Right. And I just wondered after such an epic exit, like, do you ever feel like the bar is just so high on whatever you do next? Right. Like, is there a lot of pressure for lightning to strike twice, so to speak, on whatever your next venture might be? Yes, there's a lot of pressure, but also I have a lot of knowledge and I think that I had so much fun the first time. I cannot wait to see what I can do the second time when it comes back to the fun piece.

48:34Like I get a the beauty of like having an exit. You can do what you want with whomever you want when you want. Right. You have this liberty to have this freedom. But with freedom doesn't have purpose. I think having a purpose and not retiring at 39 is so important. And money doesn't just make you happy. It's paper. At the end of the day, sure, it makes my life easier. Absolutely. And I'm so blessed that I am where I am today. but purpose is more important than money. And so for me, figuring out that next purpose is more fun than being scared to do something next. 39, you're still so young. It's like your whole life's still ahead of you.

49:14Literally, I was like, I can't, I tried, I took up golf. I tried to play golf for like six months and I actually got really good, but I was like, I cannot play golf. I have to like get back to my life. And I miss working with the team the most, like the collaboration and the team and the build. Honestly, that's the funnest part. You're still advising, though, I hear, right? I am. Yeah. So I was like a Pepsi HQ this last month. I was in Poppy's HQ last week, still doing content, like more just like on the creative brand side. Would you have wanted to stay on, honestly, or do you feel like you always knew like this is what it's going to be?

49:45You know, I think if they would have given me an employee badge, I probably would have stayed just as intense as I was. But I don't think that would have been good for my mental health of really seeing stuff change. whereas it's so much control and so many decisions and it just doesn't work that way at scale. And it's been really fun to see our team thrive and them kind of step into those roles and just absolutely kill it. So that's really rewarding as well. All right. This brings me to a segment we're calling What It Takes, where an audience member gets to ask for advice or hear more on what it takes to get where you are.

50:20Today, Ria, founder of a female centric co-working space in Dubai, asks, as fellow founders, we assume a lot of our audience, which was later debunked and made us pivot. What belief did you hold on to tightly early on in your poppy journey that you had to let go of? I think there's a myth that success looks like seriousness. So early on, I felt like as the only woman in the room or the only woman in senior leadership or fighting this status quo, I thought I had to be a little bit more of on the serious side and be professional. And I actually think the opposite is true. I think being yourself and surrounding yourself with people that are better at you to allow you to do your superpower.

51:03So figuring out like, what are you really good at? And then hiring for people that don't. So you don't have to be serious. I'm fun. I love fashion. I was goofy online. I cuss a little. I dance on Zooms. I was breastfeeding on Zooms. Like, I think fun is fuel to allow culture to allow us to have those heart get through those hard times. Right. And so I think at Poppy, we just had the best culture with like the fun and everything, but we were working so hard. So I think it's just a myth that you have to be serious to be successful. Thank you, Allison. Now we're going to do a quick rapid fire round.

51:37Don't overthink it. Just say whatever comes to mind. Ready? Okay. Who has been the most unexpected Poppy super fan? Pedro Pascal. What's one trend in beverages you think is overhyped? Protein. How do you mentally prepare for a big event? Get a good night's sleep. Pet peeve in the workplace. Camera off on Zoom. It's like if we're all here trying to like work and like most people are working remotely, having that human interaction, I think it's very weird if you try to have an entire call. Unless you're like eating a sandwich or a salad. I get that. But turn your camera on. Who cares if you don't have makeup on?

52:13Favorite way to unwind after a long day? Reality TV and white wine. What do you like to ask when hiring? You know, I'm actually like a horrible interviewer. I see the goodness in everybody. So my favorite question is, tell me your three favorite brands that are on trend right now. And if they don't know anything cultural, you can see right through if they actually get branding versus the typical, can you sell this pin? or tell me about your most biggest strengths. Like that stuff to me is just like, you can't really see how people are. Tell me about a problem you solved. Yeah. I'm like, no, tell me what cool marketing thing you saw this week or what cool thing did a brand do that inspires you?

52:53Like those are the good ones. Yeah, that tracks. If you could go back to that kitchen 10 years ago and give yourself one piece of advice, what would it be? You know, I think it goes back to the fun piece. like be have fun earlier that's I was just like so serious and so working hard in those early days versus I was a little bit hard on myself like it's okay like enjoy the process stop and smell the roses like poppy was lightning in a bottle that growth is not the norm people have to realize what happened to poppy it does not happen every day and to go back and just like stop and smell the roses and like enjoy being present in that moment.

53:35Yeah. Well said. Alison, thank you. I've enjoyed this. Thank you for having me. Thanks for joining us on Behind the Business. For more stories on business and leadership, follow us on Apple Podcasts, Spotify, YouTube, or wherever you get your podcasts. See you next week.

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