Why Pepsi's launching prebiotic soda after paying ~$2b for Poppi
Plus, tax rules for startups and early stage investors just got better
This week:
Boring stuff first — tax rules around QSBS just changed and you need to wake up to it
Some USDA farmer grants are going away
Cheese making loses money, but whey makes up for it
Beef protein isolate is an up-and-comer
Pepsi’s prebiotic cola launch makes sense
The whole David/Cod thing explained in full, once and for all
✅ Founders and investors! New QSBS rules expand tax benefits
*Do not take tax advice from me — consult your legal tax advisor*
Early-stage C corps raising money via SAFEs, issuing stock options, and compensating advisors or early team members with equity should understand Qualified Small Business Stock (QSBS) rules. I’m not going to explain it all here, read this, but I’ll cover what’s new —
Under Section 1202, investors and certain equity holders (like advisors or employees) may be able to exclude up to 100% of their capital gains from federal taxes when they eventually sell their stock. Most food, CPG, and service businesses qualify for QSBS, and the tax benefits just got better under the the One Big Beautiful Bill Act (signed July 4, 2025)
gains can now be tax-free up to $15M or more per person (used to be $10M)
held for at least 3 years (reduced from 5 years under new law) to receive phased tax exclusion (50% at 3 years, 75% at 4, 100% at 5+)
the 83(b) election lets early equity recipients start the QSBS clock earlier—a huge advantage for tax savings
the 83(b) form must be filed with the IRS within 30 days of the stock grant date—no exceptions
✅ For those of you who have not been glued to LinkedIn the past couple weeks I will explain the whole David/Cod thing
because most of you get that it’s a joke but are confused as to why people are actually ordering the cod.
I’ve been pointing out on these pages that David was never meant to be unprocessed. That the positioning as the most perfect bar (perfection = David, nod to Michelangelo) is that if you want 150 calories and 75% of it be protein, and no sugar, in the most convenient, shelf stable, on-the-go food — it is a perfect solution.
Then I wrote about the lawsuit where David purchased the supplier of the proprietary ingredient Epogee, which was criticized as foul play, bad-actor move for taking away supply to other brands, and I wrote that Epogee has been around for over a decade, languishing because the other brands were not scaling and that food tech needs big capital and big brand dollars to ever get anywhere. Then the backlash turned into David is pushing chemicals and some analogies to Olestra (remember the fat replacement that launched in potato chips that made everyone sick). So in response to all this, Peter Rahal (ex RX bar, and now founder of David) did a clapback, PR stunt where he launched cod, which is theater — literally offering pure, unprocessed protein. It’s making a point and reinforcing the brand image. Genius. So my comment last week
In the absurdity of clean label compromises, we have a hyperbolic response
points out the absurdity of people wanting perfect protein with perfect convenience and being critical for it not being a whole food. It’s not meant to sell cod.
You get it now ; )
✅ It’s over for USDA RFBC Grants
It was just a matter of time.
(Washington, D.C., July 15, 2025) – U.S. Secretary of Agriculture Brooke L. Rollins today announced the termination of the Regional Food Business Centers (RFBC) program. This pandemic-era, Biden program was created using one-time, temporary funding from Congress. The Department is terminating this program that should not have been established in this manner in the first place, but are doing so in a way to honor commitments made to farmers.
✅ A lot of cheese makers are breaking even on cheese but making money on whey NYT
✅ Carnivore and allergen-sensitive consumers (dairy-free, soy-free) seeking collagen + complete amino acid are turning to beef protein
Honey Mama’s + Equip Foods new Chocolate Mint Beef Protein Isolate is launching in a category dominated by whey protein, which accounts for ~60–70% of the global protein supplement market
✅ Why prebiotic Pepsi is a good idea
When you want a Coke or a Pepsi, nothing else is a substitute. Pepsi has figured that out. Poppi and Olipop may offer impressive flavor in their fruit variants, but they don’t deliver on cola.
Among early adopters who’ve tried Coca‑Cola, Diet Coke, Olipop cola flavor, and Poppi cola flavor, survey results from the New Consumer show Coca-Cola wins on taste preference, even though consumers think the others are more healthy.
So a healthified cola by the OG brand makes sense. Pepsi is now positioned with the acquisition of Poppi to regain share in Carbonated Soft Drinks. Available online starting in the fall and in retailers next year.
All my best,
Jennifer