Coke And Pepsi Boycott Over Gaza Lifts Muslim Countries' Local Soft Drinks

Coca-Cola and rival PepsiCo have spent hundreds of millions of dollars over decades building demand for their soft drinks in Muslim-majority countries from Egypt to Pakistan, Ariba Shahid, Jessica DiNapoli, and Farah Saafan reported for Reuters.

Being a symbol of America is no longer a feasible marketing strategy for Coke and Pepsi in countries with a Muslim majority.

Now, both companies face a challenge from local sodas in those countries due to consumer boycotts that target the global brands as symbols of America, and by extension, Israel, during the Gaza war.

In Egypt, sales of Coca-Cola have plummeted this year, while the local brand V7 has exported three times as many bottles of its own cola in the Middle East and beyond compared to last year.

In Bangladesh, an outcry forced Coca-Cola to cancel an ad campaign against the boycott. Across the Middle East, Pepsi’s rapid growth evaporated after the Gaza war started in October.

Pakistani corporate executive Sunbal Hassan kept Coke and Pepsi off her wedding menu in Karachi in April, saying she didn’t want to feel her money had reached the tax coffers of the U.S., Israel’s staunchest ally.

“With the boycott, one can play a part by not contributing to those funds,” Hassan said. Instead, she served her wedding guests the Pakistani brand Cola Next. She is not alone.

While market analysts say it is difficult to put a dollar figure on lost sales, PepsiCo and Coca-Cola continue to see growth in some countries in the Middle East. However, Western beverage brands suffered a 7% sales decline in the first half of the year across the region, according to market researcher NielsenIQ.