Key Moments
$2B founder reveals the niches that can make you $$$ (ft. Allison Ellsworth, Poppi)
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Key Moments
Poppi founder Allison Ellsworth reveals how a personal gut health issue evolved into a $2B beverage brand by prioritizing brand and digital-first marketing, despite initial skepticism and the chaos of launching at the start of COVID.
Key Insights
Poppi experienced exponential growth, going from $3 million in revenue in its first year (2020) to over $550 million before being sold in approximately 4.5 years.
The brand's rapid growth was significantly fueled by being an early adopter and leaning into TikTok when it was the 'wild, wild west' of social media.
Poppi's strategy was 'brand first, digital first,' with brand awareness as the primary KPI, influencing decisions from product variety packs to marketing campaigns.
The company intentionally reinvested all capital back into the brand, not focusing on profitability until the year before its sale, with total funding reaching approximately $70 million.
Poppi initially launched as 'Mother Beverage' with a focus on apple cider vinegar and gut health, but pivoted its positioning to directly compete with soda after observing consumer use occasions.
The founder attributes her confidence to years of 'failing and making a total fool of herself' in entrepreneurial endeavors, starting from farmer's markets to the Shark Tank pitch.
The genesis of a gut health drink
The story of Poppi, originally Mother Beverage, began with a personal need: the founder, Allison Ellsworth, experienced tummy troubles with drinking apple cider vinegar and sought a better-tasting alternative. This kitchen-table innovation, born from a personal problem, eventually grew into a beverage empire. Ellsworth admits that if she had known the intensity of the beverage industry beforehand, she might not have embarked on the journey, highlighting the power of naivete in entrepreneurship. The initial phase involved selling at farmer's markets for about two years before the brand's significant transformation.
From Shark Tank to a pandemic launch
After the farmer's market phase, Mother Beverage appeared on Shark Tank, securing a deal which provided a catalyst for change. This was followed by a significant rebrand, leading to the launch of Poppi on March 3rd, 2020, precisely at the onset of the COVID-19 pandemic. This timing proved fortuitous, as consumers were increasingly focused on health, wellness, reading labels, and seeking ways to boost their immune systems. The initial year saw $3 million in revenue, followed by $22.5 million, and then a dramatic leap to $200 million, ultimately leading to a sale for over $550 million within roughly 4.5 years. This hyper-growth was described as 'lightning in a bottle,' making it difficult to even process the success in real-time.
Digital-first and brand-centric marketing as growth drivers
A key domino that caused Poppi's rapid expansion was its early and aggressive adoption of TikTok. While initially met with skepticism, even from advisors like Rohan Oza, Ellsworth saw its potential. She personally dedicated nights and weekends to experimenting with the platform, creating fun, viral-worthy content. This digital-first approach allowed Poppi to break through traditional CPG marketing patterns, which often focus on major hubs like LA and New York. Instead, Poppi gained traction in unexpected places like Fargo and Cincinnati, demonstrating the power of a digital-first mindset. The brand's primary Key Performance Indicator (KPI) was brand awareness, with every decision—from packaging aesthetics to product selection for variety packs—prioritizing vibrancy and shelf appeal over purely data-driven choices, even if it meant going against buyer recommendations.
The strategy behind significant branding investments
Poppi's growth trajectory was supported by substantial investment in branding, reportedly around $70 million. This capital was intentionally reinvested into the brand, not for immediate profitability, which wasn't achieved until the year before the sale. This strategy fueled high-impact marketing efforts, including multiple Super Bowl commercials, extensive TV advertising, creator collaborations, and experiential marketing like pop-ups with celebrities such as 50 Cent. Crucially, Poppi operated on an Amazon-first model from day one, leveraging the platform for mass awareness rather than direct sales profit, viewing it as a critical marketing tactic given Amazon's vast household reach.
The critical role of branding and positioning
A pivotal element of Poppi's success was its meticulous brand positioning, heavily influenced by Rohan Oza and his associate Stevie. After securing the Shark Tank deal, the team took nine months to rebrand and deeply understand their consumer. This led to a shift from a niche gut-health product ('be good, happy, be good, healthy') to a direct soda competitor ('soda's back, better than ever'). This repositioning tapped into nostalgia and emotion, making the product more accessible and appealing to a mass market. The founders emphasized that while the brand's core mission ('revolutionizing soda') remained constant, they were agile in adapting messaging and packaging based on consumer feedback and cultural shifts. They learned that consumers primarily noticed the appealing packaging and taste first, with the health benefits becoming a secondary, delightful discovery.
Confidence born from failure and embracing embarrassment
Ellsworth highlighted that her confidence stems from a history of failure and a willingness to appear foolish. She described standing at farmer's markets with an apple cider vinegar drink as embarrassing, but these experiences provided the foundational learning needed for later success. This perspective allows her to be authentic and relatable, sharing her journey openly. She believes that embarrassment is an under-explored emotion in achieving success, encouraging entrepreneurs to pitch ideas, start businesses, or create content without fear of sounding stupid or looking ridiculous. This approach fosters learning and iteration, such as when Poppi received negative feedback on a root beer flavor and packaging, leading them to acknowledge the criticism, reformulate, and re-release the product.
Navigating the exit and post-exit landscape
The M&A process with Pepsi was described as surprisingly smooth, largely because Pepsi understood Poppi's vision and aligned with its focus on 'better-for-you' products. The acquisition provided Poppi with immense distribution power, opening doors to venues like stadiums and restaurants previously inaccessible due to existing contracts. Post-exit, Ellsworth found that life didn't change drastically overnight, but the real shift came from making conscious decisions to improve lifestyle, such as hiring help and gaining more time for family. While she didn't experience 'post-exit blues' in terms of loss of purpose, she acknowledged the need to redefine her next chapter and find new challenges, emphasizing that purpose is crucial, and money often follows.
Identifying future opportunities and market trends
When considering future ventures, Ellsworth focuses on personal needs and mass-market appeal rather than hyper-niche products. She pointed to the GLP-1 medication trend as a potential area for innovation, seeing a gap in products that support or mitigate side effects for users. She also discussed the importance of being 10-15% better than the established norm, especially in CPG, rather than aiming for a 10x improvement which is often unrealistic. She prefers entering markets where there's a 'sea of sameness' or an opportunity to disrupt through differentiation, drawing parallels to how Poppi differentiated itself from kombucha and sparkling water by focusing on the soda occasion. She also touched upon the rise of 'calming' products like magnesium powders (e.g., Nello) and sleep-tracking devices (Oura Ring), and the growing market for aesthetically pleasing, clean home cleaning products (Preston Lane).
Mentioned in This Episode
●Supplements
●Products
●Software & Apps
●Companies
●Organizations
●Books
●Drugs & Medications
●Concepts
●People Referenced
Founder's Playbook: Building and Selling a Multi-Billion Dollar Brand
Practical takeaways from this episode
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Common Questions
Poppi started as Mother Beverage, focusing on apple cider vinegar. After a rebrand and a strategic pivot to position itself as a 'better-for-you' soda alternative, combined with a digital-first marketing strategy and TikTok engagement, it experienced rapid growth, leading to a $2 billion sale.
Topics
Mentioned in this video
Resurfaced a database created by the guest about successful entrepreneurs, which was a valuable resource for her early career.
Mentioned as one of the first companies to extensively advertise on podcasts, followed by Athletic Greens (AG1).
One of the three major distribution partners in the beverage industry capable of acquiring a large company like Poppi.
A fast-food chain where Poppi could not be sold without a major distribution partner.
A stock that the founder's children were interested in investing in with their initial $5,000 allocation.
Mentioned as a retail partner where Poppi had to make intentional decisions about variety packs based on brand aesthetics rather than just data.
The acquiring company of Poppi, chosen for their prioritization of 'better-for-you' products and strong distribution network.
A cleaning product brand mentioned as a competitor, though considered less aesthetically pleasing than Preston Lane by the speaker.
A stock that the founder's children were interested in investing in with their initial $5,000 allocation.
A company that successfully innovated within the supplement market by offering gummies, leading to an exit.
A brand of cleaning products praised for its clean ingredients, pleasant scents, and aesthetic packaging.
A competitor in the sustainable cleaning products market, known for its focus on reducing plastic and using dissolvable tablets.
The company where the founders set up investment accounts for their children to learn about investing.
A beverage company that went public with Pepsi as a distributor and minor stakeholder.
Poppi's primary sales channel from day one, used as a strategic marketing tactic for brand awareness despite lower profit margins.
Referred to as AG1, this supplement brand's pervasive advertising on podcasts was used as an example of a marketing craze.
A hotel chain mentioned as an example of a place requiring a distribution partner for product placement.
A stock that the founder's children were interested in investing in with their initial $5,000 allocation.
A key platform for Poppi's early growth, where founder-led content and viral marketing strategies were employed.
A fast-food chain where Poppi could not be sold without a major distribution partner.
A Pepsi product from which ingredients are being removed, indicating the company's shift towards healthier options, which aligned with Poppi's vision.
An AI company whose stock the founder's children were interested in investing in with their initial $5,000 allocation.
A beverage company founded by Allison Ellsworth and her husband, which was sold for $2 billion. It transitioned from 'Mother Beverage' to Poppi, focusing on a 'better-for-you' soda alternative.
A company whose acquisition at a high valuation served as a benchmark and inspiration for Poppi's founders.
A stock that the founder's children were interested in investing in with their initial $5,000 allocation.
The original name of Poppi, which started as a kitchen-based venture to create a better-tasting apple cider vinegar drink.
Collaborated with Poppi on pop-up events as part of their 'big brain building' marketing activities.
Author of 'Zero to One', whose concept of 'brand' as a business moat was discussed.
Featured in Poppi's second Super Bowl commercial, focusing on 'vibes' and brand enjoyment.
Mentioned as a high-profile individual from whom aspiring entrepreneurs could seek advice.
Poppi's CMO who negotiated the purchase of a Super Bowl ad slot.
The president of Y Combinator at the time, who provided a direct and instructive response to the host's poorly phrased request for a meeting.
An investor and strategic partner who helped Poppi with early hires, brand positioning, and rebranding from Mother Beverage.
A luxury handbag mentioned as an example of a material item the founder did not purchase post-exit, prioritizing experiences instead.
A supplement brand whose widespread advertising on podcasts was noted as an example of aggressive marketing.
One of the three major distribution partners in the beverage industry capable of acquiring a large company like Poppi.
A sleep tracking system that regulates temperature, used by the founder for optimizing sleep quality.
A calming powder supplement containing magnesium, recommended for sleep health.
One of the destinations on the founder's month-long post-exit 'FU trip' with family.
One of the destinations on the founder's month-long post-exit 'FU trip' with family.
One of the destinations on the founder's month-long post-exit 'FU trip' with family.
One of the destinations on the founder's month-long post-exit 'FU trip' with family.
A venue where Poppi could not be sold due to existing contracts, illustrating the need for major distribution partnerships.
A reality television show where Allison Ellsworth and her husband pitched their beverage company, receiving a deal that was crucial for their rebrand and subsequent growth.
The podcast where this interview is taking place, known for its blunt discussions about entrepreneurship and wealth.
Mentioned as an ingredient in some beverages that consumers may not actively care about, contrasting with Poppi's focus on flavor and reduced sugar.
The initial ingredient and focus for Mother Beverage, created to address personal tummy problems and improve the taste of the drink.
Mentioned as an ingredient in some beverages that consumers may not actively care about, contrasting with Poppi's focus on flavor and reduced sugar.
A key ingredient in Nello, discussed for its benefits in aiding sleep.
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