Pepsi (PEP.US) has stated that its prebiotic soda brand Poppi failed to achieve the growth targets required to trigger an additional earnout payment.

According to a securities filing, as of September 5, Pepsi estimated the performance-linked payment related to the Poppi acquisition at approximately $12 million. This amount represents a sharp decline from the $117 million recorded in June and is far below the $278 million projected in December.

Last year, Pepsi spent nearly $2 billion to acquire Poppi; the two parties agreed that if the brand reached undisclosed growth milestones by the third quarter of 2027, Pepsi would pay an additional $300 million.

Poppi gained prominence for its highly shareable, social-media-friendly marketing approach, featuring low-sugar flavors such as Shirley Temple and sour apple. Earlier this year, Pepsi allocated one of its four Super Bowl advertisements to the brand. The soda brand has also recently secured promotional partnerships with the Dallas Cowboys and the reality show Love Island (US version).

Pepsi declined to comment on the declining valuation of the future Poppi payment. A Pepsi spokesperson said on Monday that Poppi achieved double-digit volume growth in the third quarter and gained share in the carbonated soft drink market.

Pepsi has been struggling with its North American soda business. The beverage division reported overall third-quarter sales of $7.7 billion, but organic volume growth slipped slightly, missing Wall Street expectations. CEO Ramon Laguarta said on last week's earnings call that the company is "not satisfied" with the performance of its soft drink business and noted that overall execution needs improvement. He added that the company will increase investment in Poppi as well as Pepsi and Mountain Dew.

This payment valuation, which represents a contingent consideration liability measured at fair value, reflects the company's best estimate of the future amount payable. According to the filing, the valuation is based on simulated projections of future operating conditions, including Poppi's net revenue and margin forecasts. Pepsi has not yet disclosed extensive sales details for the brand.

Beverage industry analyst Kenneth Shea said: "Based on the current trajectory, unless Poppi's performance rebounds significantly over the next year, they may not pay any portion of that $300 million."

Should the payment be made, it would go to Poppi's shareholders and founders Allison and Stephen Ellsworth. Laguarta told analysts in July that transitioning Poppi from its previous distributor to Pepsi's system had "some impact" on the soda brand's performance in the first half of this year. He said at the time that the issue had been resolved and the brand was still growing.

Over the past several years, Pepsi has been increasing its focus on healthier snack and beverage product lines. To pursue further growth, Pepsi is pushing Poppi beyond the traditional soda category. Last week, Poppi announced two new additions to its beverage lineup: Poppi Lift, an energy drink containing 70 milligrams of caffeine, and Poppi Chill, which adds magnesium and theanine and is positioned for relaxation and stress relief.