Boycotts Hit International Soft Drink Brands in Muslim-Majority Countries

Coca-Cola and Pepsi, two of the world’s largest soft drink manufacturers, are facing significant challenges in Muslim-majority countries due to consumer boycotts. The boycotts, which began in solidarity with Palestinians in the Gaza Strip, have resulted in decreased sales for both companies.

In Egypt, sales of Coca-Cola decreased, while exports of the local brand V7 tripled in the Middle East region this year compared to last year. Similarly, in Pakistan, local drinks such as Cola Next and Pakola have gained popularity, now accounting for 12% of beverage purchases.

A Brief History of Boycotts

Boycotts have been used as a form of consumer protest for centuries. The concept dates back to the 18th-century sugar boycott movement in Britain, which protested against slavery. Boycotts were also used against apartheid South Africa in the 20th century and have been employed extensively against Israel.

Impact on Sales

According to earnings data, total revenue from PepsiCo’s Africa, Middle East, and South Asia units will reach $6 billion in 2023. In the same year, Coca-Cola’s revenue from the Europe, Middle East, and Africa region reached $8 billion. However, sales volumes in PepsiCo’s Africa, Middle East, and South Asia units did not grow significantly in the six months following the Israeli war on the Gaza Strip.

Coca-Cola sales in Egypt fell by a double-digit percentage in the six months ended June 28, according to company data. In the same period last year, the volume was down 10%.

Local Brands Gain Popularity

Local brands such as Cola Next and V7 have gained popularity in Muslim-majority countries. Cola Next, whose products are cheaper than Coca-Cola and Pepsi, changed its advertising slogan in March to “Because Cola Next is Pakistani” to emphasize that it is a local product.

V7 founder Mohamed Nour said in an interview that the company’s exports are up 300% this year compared to 2023. Noor, a former Coca-Cola executive who left in 2020 after 28 years there, said V7 products are now sold in 21 countries.

Long-term Damage to Consumer Loyalty

Paul Musgrave, associate professor at Georgetown University in Qatar, warned of long-term damage to consumer loyalty due to boycotts. “If you change your habits, it’s going to be hard to attract you back in the long run,” he added.