Across Muslim-majority nations, from North Africa to Southeast Asia, consumers are boycotting products from well-known Western brands. Companies like Coca-Cola, KFC, Starbucks, Krispy Kreme, and Pizza Hut are facing backlash due to perceptions of their stance on the Gaza war – if they sell to Israeli consumers, it must mean they support Israel’s security policy.
This aggressive consumer movement is significantly impacting the financial performance of multinational corporations and their local franchise partners. The boycotts are compounding the challenges these companies already face from a worldwide economic slowdown, further straining their profitability.
However, analysts have suggested that the decline in sales experienced by companies facing boycotts may be attributed to a combination of factors. While the boycott movement has certainly played a role, the overall economic downturn and reduced purchasing power of Egyptian consumers have likely contributed significantly to the drop in sales.
Amarpal Sandhu, CEO of the Americana Group, the largest integrated food company in the Middle East, told The Financial Times on Monday: “This event is unprecedented. The length of this conflict is unprecedented. The intensity is unprecedented.”
According to Forbes, Americana Restaurants has a portfolio of 12 global brands. It employs more than 40,546 people in 2,465 outlets across 13 countries: Egypt, Morocco, Bahrain, Iraq, Jordan, Kazakhstan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, and the UAE. In the First half of 2024, the company’s revenue stood at $1.05 billion, with a net profit of $80 million.
In 2023, Pakistan, home to the world’s second-largest Muslim population, saw a significant shift in consumer behavior and government policy. The Pakistani government announced plans to establish a committee tasked with identifying and boycotting products from companies with direct or indirect ties to Israel or its military.
This boycott movement, arguably the most extensive in recent years, gained traction through social media platforms and received support from both governmental bodies and Boycott, Divestment, and Sanctions (BDS) campaigns. The situation highlights the potential for social movements to rapidly escalate and impact major corporations.
The government’s action followed a week-long protest by thousands of activists from an Islamist party, who blocked a major road near Islamabad, demanding a ban on all Israel-linked products.
The impact of this boycott became evident in early 2024. Coca-Cola İçecek, the company responsible for bottling Coca-Cola in Pakistan, reported a nearly 25% year-on-year decline in sales volume for the first quarter. While the company attributed this drop to “macroeconomic headwinds,” it did not explicitly mention any effects from the ongoing conflict in Gaza.
As a result of the boycott, some stores began replacing Coca-Cola products with local alternatives that were perceived as less controversial. However, establishments that continued to stock Coca-Cola products faced public backlash and harassment.
In Indonesia, Starbucks has been actively distancing itself from any association with the conflict in Gaza. Many of its stores in Jakarta have posted notices stating: “Starbucks has no political agenda. We do not use our profit to fund any government or military operations. Neither Starbucks nor Howard Schultz financially supports Israel in any way.”
However, this stance has been complicated by recent revelations about Howard Schultz, the 71-year-old Ashkenazi Jewish businessman from Brooklyn who has long been associated with the company. From October 2023 to early May 2024, Schultz was reportedly part of a private group chat that included several high-profile business leaders. This group, according to reports, was focused on strategies to support Israel in the Gaza conflict.
The chat group allegedly included notable figures such as Michael Dell (founder and CEO of Dell), Daniel Lubetzky (founder of Kind Snacks), hedge fund managers Daniel Loeb and Bill Ackman, billionaire Len Blavatnik, real estate investor Joseph Sitt, Joshua Kushner (founder of Thrive Capital and brother of Jared Kushner), and Israeli billionaire real estate investor Yakir Gabay.
In May 2024, PepsiCo found itself at the center of controversy in Egypt due to an ill-timed advertising campaign. The company launched a series of advertisements featuring giant billboards with the slogan “Stay thirsty,” which many interpreted as a provocative message aimed at those participating in boycotts. This campaign, coinciding with ongoing tensions related to the Gaza conflict, sparked significant public backlash.
Further fueling the controversy, PepsiCo’s television commercials featuring prominent Egyptian celebrities such as singer Amr Diab and Liverpool soccer star Mohamed Salah drew intense criticism on social media platforms. The public’s negative reaction to these high-profile endorsements highlighted the sensitive nature of corporate advertising during times of geopolitical tension.
Compounding the situation, Egypt has been experiencing severe economic challenges. The country has been grappling with a significant surge in inflation and a critical shortage of US dollars, which has led to a sharp devaluation of the Egyptian pound. These economic factors have considerably reduced consumer purchasing power.
