Localising the Global Strategy
In the world of brands, perception is reality and social media largely shapes this reality. People are too busy in today’s hectic world to verify the accuracy of information unless it is shared sufficiently and often enough. Social media evangelists have an all-too-easy time spreading false information that eventually gains traction. This dynamic can be detrimental to brands, making them the first casualties of political confrontations. The flip side is that large brands may invest millions of dollars in making their brand the most top-of-mind, and for some, this very visibility comes back to haunt them, as has been recently observed in the fast-food and carbonated beverage categories.
The question today is: how much has the BDS movement impacted the hospitality and cola industries? Will brands like PepsiCo and Coca-Cola be able to overcome the negative perception some people have of them and reclaim the market share they seem to have lost to brands like Gourmet Cola and Cola Next? Will McDonald’s reputation be restored by using discount pricing strategies and can they ever be seen again as an innocuous, child-friendly dine-out rather than a complicit party in the destruction of the homes and lives of the Palestinian people?
Choosing between McDonald’s and KFC or Coke and Pepsi has political and moral implications even in normal times. Combining political awareness with the possibility of conflict can strengthen allegiances, leading consumers to buy only from businesses that share their political views or steer clear of those that do not align with their political or moral stance. Companies that attempt to maintain their neutrality are frequently under pressure to adopt a strong position.
Customer activism extends beyond removing or adding brands from shopping baskets; it has become a form of advocacy, encouraging or dissuading brand purchases across platforms and impacting brand equity and sales long after the dispute is resolved.
What is the BDS movement?
On July 9, 2005, a coalition of 170 Palestinian civil society organisations made a call to “people of conscience” worldwide, sparking the start of the BDS (Boycott, Divestment, Sanctions) movement for the preservation of the rights of Palestinians. Since October 7, 2023, at least 35,903 Palestinians have died and 80,420 have been injured in Israel’s war on Gaza. There have been 1,139 deaths in Israel as a result of Hamas attacks and more are currently in detention (Source: Al Jazeera). In the backdrop of this, a McDonald’s franchise in Israel started to provide free meals to Israeli soldiers, causing outrage among Muslim populations. This was followed by an apology by McDonald’s and the company’s intention to buy back its franchises in Israel.
This was followed by the publication of a list of brands online, highlighting the ones said to support Israel. The question is: is this consumer activism misplaced? Is the Israeli-Palestinian conflict anywhere closer to a resolution because Coca-Cola and McDonald’s have experienced declining sales? And why are the brands with direct links to Israel not impacted by this boycott? Brands such as HP, Caterpillar, Fiverr, Upwork and Ahava.
History of the Coca-Cola Boycott in the Muslim World
Coca-Cola faced a far more serious challenge when it became embroiled in the Arab-Israeli conflict in the sixties. After World War II, Coca-Cola found a big market in the Middle East, especially in Egypt. By 1950, the company had set up several bottling operations in Egypt and boasted that it was creating jobs and improving living conditions through its investments. Then, in 1966, the Anti-Defamation League, a New York-based international Jewish NGO and advocacy group, accused Coca-Cola of supporting the Arab boycott of Israel because the company had refused to provide a franchise to an Israeli bottler. Coca-Cola refuted the accusation and the company was then boycotted by the Jewish community. In order to safeguard its American market, Coca-Cola acquired an Israeli partner soon after, which resulted in a new set of issues, with the Arab League imposing a boycott of Coca-Cola. The result was that Coca-Cola was forced to leave the Arab world in 1968, aligning the company by default with the Zionist cause.
Aftermath of BDS in Pakistan
Both Coca-Cola and McDonald’s have been severely impacted by the BDS movement, particularly in the Middle East and Pakistan. According to a survey conducted by Pulse Consultants covering the top 12 cities in Pakistan, juices, soft drinks, fast food and chips are the top four categories to have been the most severely impacted by BDS. According to the study in April 2024, the percentage of people who supported the BDS movement increased from 60% to 65%, and the percentage of consumers who are boycotting MNC brands has gone up from 68% to 84%. Carbonated soft drinks are the most affected (83% – an increase of eight percent over eight months). The impact on fast food has increased from 29% in December to 39% in April 2024 (a 10% increase). The percentage of consumers who said they were boycotting juices rose by seven percent (21% in April 2024). Furthermore, almost all SECs appear united in their desire to boycott the products of MNCs, although SECs D and E are comparatively less inclined towards boycotting big brands.
Consumers aged between 36 and 55 appear more inclined to boycott compared to other age cohorts.
In addition to all this, financial reporting for Coca-Cola, PepsiCo and McDonald’s has shown the impact on their sales in the Middle East and South Asia as a result of various boycotts sparked by geopolitical unrest. It is important to pay attention to this movement in customer behaviour, as it represents a significant shift in the competitive environment. In Malaysia, BDS led to the closure of several McDonald’s franchises. In November 2023, Turkey’s Parliament banned Coca-Cola and Nestlé from restaurants, and customers in Saudi Arabia, Qatar, Turkey, Egypt and the UAE have boycotted brands like Dominos, Carrefour, McDonald’s, Coca-Cola and PepsiCo.
The Impact of BDS
The BDS movement may not have stopped Israeli aggression in Gaza, but it has undoubtedly harmed the revenues of these businesses. There is no end in sight to this ongoing conflict and its persistence may have major consequences for the brands in question. The flip side is that new brands such as Cola Next and Gourmet Cola have seen significant increases in their sales, to the extent that last year, they started experiencing shortages and complaints about their quality.
The Way Forward
Most multinationals tend to keep a low profile during geopolitical conflicts, waiting for conditions to stabilise. However, in order to stop further losses in their sales, new strategies need to be adopted.
Dissociate Culturally from the Parent Brand: Companies like Coca-Cola and McDonald’s have strong cultural ties to their American origins, which can be a liability in certain geopolitical climates. They need to build localised brand identities that resonate with regional audiences.
Regional Communication Strategies: Multinationals should create campaigns that are rooted in the identities and values of a specific region and thereby build stronger connections with local communities.
Community Engagement: Brands should participate in community-building initiatives. Rather than focus on global agendas, they should address local issues such as clean water, hygiene, better living standards, employment and education.
Long-Term Commitment: Initiatives aimed at community engagement and local relevance will not yield immediate results and consistent efforts in these areas are key.
Adaptability and Sensitivity: Global and geopolitical issues are ongoing and unpredictable. Brands must remain adaptable and sensitive to changing landscapes. This involves constantly assessing the geopolitical climate and adjusting strategies accordingly.
Omar Farooq is a marketer by profession.
omar.farooq@packages.com.pk
Coke Pakistan PepsiCo Pakistan KFC Fiverr cola next McDonald’s Gaza BDS Omar Farooq The Boycott, Divestment, and Sanctions (BDS) movement Gourmet Cola History of the Coca Cola Boycott in the Muslim World Aftermath of BDS in Pakistan Impact of BDS
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This was followed by the publication of a list of brands online, highlighting the ones said to support Israel. The question is: is this consumer activism misplaced? Is the Israeli-Palestinian conflict anywhere closer to a resolution because Coca-Cola and McDonald’s have experienced declining sales? And why are the brands with direct links to Israel not impacted by this boycott? Brands such as HP, Caterpillar, Fiverr, Upwork and Ahava.
Consumers aged between 36 and 55 appear more inclined to boycott compared to other age cohorts.
In addition to all this, financial reporting for Coca-Cola, PepsiCo and McDonald’s has shown the impact on their sales in the Middle East and South Asia as a result of various boycotts sparked by geopolitical unrest. It is important to pay attention to this movement in customer behaviour, as it represents a significant shift in the competitive environment. In Malaysia, BDS led to the closure of several McDonald’s franchises. In November 2023, Turkey’s Parliament banned Coca-Cola and Nestlé from restaurants, and customers in Saudi Arabia, Qatar, Turkey, Egypt and the UAE have boycotted brands like Dominos, Carrefour, McDonald’s, Coca-Cola and PepsiCo.
The Impact of BDS
The BDS movement may not have stopped Israeli aggression in Gaza, but it has undoubtedly harmed the revenues of these businesses. There is no end in sight to this ongoing conflict and its persistence may have major consequences for the brands in question. The flip side is that new brands such as Cola Next and Gourmet Cola have seen significant increases in their sales, to the extent that last year, they started experiencing shortages and complaints about their quality.
The Way Forward
Most multinationals tend to keep a low profile during geopolitical conflicts, waiting for conditions to stabilise. However, in order to stop further losses in their sales, new strategies need to be adopted.
Dissociate Culturally from the Parent Brand: Companies like Coca-Cola and McDonald’s have strong cultural ties to their American origins, which can be a liability in certain geopolitical climates. They need to build localised brand identities that resonate with regional audiences.
Regional Communication Strategies: Multinationals should create campaigns that are rooted in the identities and values of a specific region and thereby build stronger connections with local communities.
Community Engagement: Brands should participate in community-building initiatives. Rather than focus on global agendas, they should address local issues such as clean water, hygiene, better living standards, employment and education.
Long-Term Commitment: Initiatives aimed at community engagement and local relevance will not yield immediate results and consistent efforts in these areas are key.
Adaptability and Sensitivity: Global and geopolitical issues are ongoing and unpredictable. Brands must remain adaptable and sensitive to changing landscapes. This involves constantly assessing the geopolitical climate and adjusting strategies accordingly.
Omar Farooq is a marketer by profession.
omar.farooq@packages.com.pk
Coke Pakistan PepsiCo Pakistan KFC Fiverr cola next McDonald’s Gaza BDS Omar Farooq The Boycott, Divestment, and Sanctions (BDS) movement Gourmet Cola History of the Coca Cola Boycott in the Muslim World Aftermath of BDS in Pakistan Impact of BDS
Email
In addition to all this, financial reporting for Coca-Cola, PepsiCo and McDonald’s has shown the impact on their sales in the Middle East and South Asia as a result of various boycotts sparked by geopolitical unrest. It is important to pay attention to this movement in customer behaviour, as it represents a significant shift in the competitive environment. In Malaysia, BDS led to the closure of several McDonald’s franchises. In November 2023, Turkey’s Parliament banned Coca-Cola and Nestlé from restaurants, and customers in Saudi Arabia, Qatar, Turkey, Egypt and the UAE have boycotted brands like Dominos, Carrefour, McDonald’s, Coca-Cola and PepsiCo.
The Way Forward
Most multinationals tend to keep a low profile during geopolitical conflicts, waiting for conditions to stabilise. However, in order to stop further losses in their sales, new strategies need to be adopted.
Dissociate Culturally from the Parent Brand: Companies like Coca-Cola and McDonald’s have strong cultural ties to their American origins, which can be a liability in certain geopolitical climates. They need to build localised brand identities that resonate with regional audiences.
Regional Communication Strategies: Multinationals should create campaigns that are rooted in the identities and values of a specific region and thereby build stronger connections with local communities.
Community Engagement: Brands should participate in community-building initiatives. Rather than focus on global agendas, they should address local issues such as clean water, hygiene, better living standards, employment and education.
Long-Term Commitment: Initiatives aimed at community engagement and local relevance will not yield immediate results and consistent efforts in these areas are key.
Adaptability and Sensitivity: Global and geopolitical issues are ongoing and unpredictable. Brands must remain adaptable and sensitive to changing landscapes. This involves constantly assessing the geopolitical climate and adjusting strategies accordingly.
Omar Farooq is a marketer by profession.
omar.farooq@packages.com.pk
Coke Pakistan PepsiCo Pakistan KFC Fiverr cola next McDonald’s Gaza BDS Omar Farooq The Boycott, Divestment, and Sanctions (BDS) movement Gourmet Cola History of the Coca Cola Boycott in the Muslim World Aftermath of BDS in Pakistan Impact of BDS
Email
Most multinationals tend to keep a low profile during geopolitical conflicts, waiting for conditions to stabilise. However, in order to stop further losses in their sales, new strategies need to be adopted.
Dissociate Culturally from the Parent Brand: Companies like Coca-Cola and McDonald’s have strong cultural ties to their American origins, which can be a liability in certain geopolitical climates. They need to build localised brand identities that resonate with regional audiences.
Regional Communication Strategies: Multinationals should create campaigns that are rooted in the identities and values of a specific region and thereby build stronger connections with local communities.
Community Engagement: Brands should participate in community-building initiatives. Rather than focus on global agendas, they should address local issues such as clean water, hygiene, better living standards, employment and education.
Long-Term Commitment: Initiatives aimed at community engagement and local relevance will not yield immediate results and consistent efforts in these areas are key.
Adaptability and Sensitivity: Global and geopolitical issues are ongoing and unpredictable. Brands must remain adaptable and sensitive to changing landscapes. This involves constantly assessing the geopolitical climate and adjusting strategies accordingly.
Omar Farooq is a marketer by profession.
omar.farooq@packages.com.pk
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