Summary

• Since 7 October 2023, when Israel initiated military operations in Gaza, several major international companies, including Coca-Cola, have experienced a significant decline in sales in Muslim-majority countries and countries where Muslims are a significant minority.
• Consumer activists specifically targeted mostly American companies, like Coca-Cola, with boycotts in protest of US foreign policy that supports Israel. Coca-Cola has been targeted by the non-government organisation (NGO) Friends of Al-Aqsa with the #BoycottCocaCola online campaign, as well as by individual activists on social media platforms like X.
• To address a reported 23 percent slump in sales in Bangladesh, Coca-Cola released a TV and social media advertisement on 9 June 2024 that aimed to counter ‘misinformation’ that Coca-Cola is an Israeli product. By attempting to disassociate the brand from Israel, Coca-Cola may have been hoping to win back consumers in Muslim-majority Bangladesh. However, the advertising campaign backfired, and prompted an angry response from Bangladeshi news outlets and social media users.

Key Takeaways

• The boycott campaign targeting Coca-Cola and the reputational damage it has incurred from the Gaza conflict demonstrates how companies are increasingly exposed to geopolitical risks in new and unpredictable ways. Beyond more familiar threats like supply chain disruption, geopolitical risks increasingly appear in the forms of consumer activism and boycott campaigns.
• The negative response to Coca-Cola’s advertising campaign in Bangladesh highlights the need to approach public relations (PR) and crisis communications in relation with sensitivity and tact. Efforts to diminish reputational damage from geopolitical events can have the opposite affect if inadequate care is taken to craft the right message attuned to the appropriate cultural context.

Coca-Cola Faces Backlash Amid War in Gaza

The intersection between the corporate and geopolitical worlds has deepened in recent years with an increasing number of consumer boycotts targeting companies based on perceived injustices on the international stage. The ongoing Israel-Hamas War fought in Gaza has corresponded strongly with this trend. The broader and pervasive Israeli-Palestinian conflict has historically attracted significant levels of international attention and controversy, so it is unsurprising that the most recent round of fighting has galvanised activism at a time when consumers are more socially and politically consciousness in their purchasing decisions than ever before.

Coca-Cola, like other large companies, has been hit with criticism for allegedly ‘supporting’ Israel since the Israeli Defense Forces (IDF) commenced operations in Gaza on 7 October 2023. The company has been criticised for the presence of a factory in the Israeli occupied West Bank. Amid fighting in Gaza, consumer activist efforts to boycott Coca-Cola intensified. One prominent campaign is led by the NGO Friends of Al-Aqsa, who organised a #BoycottCocaCola National Day of Action in November. The organisation claims that ‘Coca-Cola operates on stolen Palestinian land and is therefore directly profiting from Israel's illegal occupation and apartheid in Palestine.’ Friends of Al-Aqsa encourages activists to hand out leaflets to restaurants, persuading them to stop stocking Coca-Cola products.

Amid the ongoing controversy, Coca-Cola has experienced a decline in sales in Muslim-majority countries. The hit to sales was especially prevalent in Bangladesh, dropping by up to 23 percent nationally. Induvial stockists in Bangladesh who spoke to the media have reported a slump in sales anywhere between 30 and 70 percent, with consumers increasingly turning to beverages produced domestically by companies like Mojo. With the total revenue generated by soft drinks in Bangladesh expected to grow to $3.96 billion USD in 2025, decisionmakers at Coca-Cola have an interest in reversing this trend.

Coca-Cola’s Advertising Campaign Backfires

In June, Coca-Cola initiated a PR campaign in Bangladesh to address consumer concerns that it ‘supports’ Israel in an attempt to address negatively trending sales. The campaign included a TV and social media advertisement.

In the advertisement, a shopkeeper offers a regular customer a Coca-Cola on a hot day, only to be told the customer has stopped drinking it because it supposedly comes from ‘that country,’ without referring directly to Israel by name. The shopkeeper discovers the ‘misinformation’ originated from an unreliable Facebook page. He then educates the locals, clarifying that Coca-Cola is not from ‘that country’ (Israel) and has been enjoyed for 138 years in 190 countries, including Turkey and Spain.

The advertisement backfired, prompting Bangladeshis to protest on social media and in some cases on the streets. Coca-Cola was accused of lying and propaganda. The advert was pulled and could no longer be viewed on the company’s YouTube profile by the evening of 13 June. The actors and director of the advertisement issued public apologies and sought to distance themselves from notions that they personally support Israel. Bangladeshi media outlets have subsequently reported induvial stockists of Coca-Cola, such as restaurant and grocery store owners, experiencing lower sales for Coca-Cola products, with consumers preferring alternatives.

Learning From the Coca-Cola Controversy



• Messaging must be consistent with action: The target audience responded negatively to Coca-Cola’s PR campaign because they felt that the company’s message was inconsistent with its actions, leading to accusations of hypocrisy and dishonesty. In this case, Coca-Cola’s crisis communication strategy was to tell consumers what they thought they wanted to hear, instead of a message that was more consistent with the company’s business operations.
• Political, social, and cultural contexts matter: Coca-Cola recognised the importance of addressing the issue that was driving consumers away from their product but failed to appreciate the political, social, and cultural sensitivities of their target audience in Bangladesh. PR campaigns and crisis communications need to be based on a thorough understanding of the target audiences’ sentiments and beliefs, whilst also remaining true to the core values of the business. Finding points of convergence between core company values and the sentiments of the target audience is key to strong and successful messaging. If there is a wide divergence between a company’s core values and business practices with the sentiments and beliefs of its target audience, then a more thorough strategic revaluation may be necessary.
• Messaging must strike the right tone: Beyond disagreeing with the content of the PR campaign itself, many viewers felt that the tone of the advertisement was condescending. Even with the right message, poor delivery can cause PR efforts to backfire. Coca-Cola decided that it needed to combat ‘misinformation’, which can be difficult because it involves reshaping the entrenched beliefs of the target audience. Therefore, care needed to be taken that the delivery of the message did not further alienate an already sceptical audience.

Geopolitical Instability Is a Risk for Some and an Opportunity for Others

Whereas the War in Gaza and other conflicts and points of geopolitical tension have exposed major corporations to increased risk, geopolitical upheaval provides opportunities to others. Firms whose brand identity and messaging resonates with socio-politically conscious consumers have taken advantage of major international events to grow their businesses.

For example, Palestinian-Swedish drinks maker, Palestine Drinks, has seen sales and social media engagement grow exponentially in recent months. The brand, founded by Hussein, Mohammed, and Ahmad Hassoun – brothers of Palestinian descent – features prominent symbols of Palestine on each can of soda. The brand has appealed tremendously to consumers and retailers participating in boycotts of popular drink brands like Coca-Cola and Pepsi. As consumer behaviour is increasingly influenced by popular perceptions of major international events, companies will have to be more vigilant about geopolitical trends and the sentiments they generate amongst target audiences. Doing so will determine whether they can seize opportunities and steer away from threats.

There is already quite a wide body of research concerning domestic political and social issues and their relationship with consumer choices. Most boycotts in the past targeting various companies have been in response to domestic controversies. More research is needed to identify salient trends concerning geopolitics, foreign affairs, and consumer activity. For example, one research paper found that the financial impacts of a boycott begun to subside after one financial quarter, but this was based on a singular case study, so it is impossible to say whether this trend could be validly generalised for the effects of consumer activism on a wider scale. Until more research is conducted and there are more case studies to draw from, it will be difficult to predict what companies should expect from consumer activism. Nevertheless, it is already clear that consumers care more about events on the international stage and that this is impacting their spending.