Israel-Hamas & Brand Boycotts
Since the Gaza conflict began in response to the October 7 attacks, pro-Palestine activists have called for a boycott of businesses they perceive as supporting Israel, including Coca Cola. Pro-Palestine activists want a boycott of Coca-Cola due to allegations it operates a factory in Atarot, an Israeli settlement in the occupied West Bank.
While calls for a Coca Cola boycott have been consistent since early October, it appears the campaign has struggled to gain momentum. So far, Pyrra has detected around 500 posts, primarily on Reddit, calling for a boycott. Statements have been primarily negative in tone and have not yet called for harm towards Coca Cola or its employees.
Mentions of Coca Cola & Israel
Coca Cola is not the only company facing boycott calls for ongoing operations in Israel. Lays Chips, Starbucks, Domino's Pizza, and McDonalds are among several companies facing a boycott from far-left, pro-Palestine, and pro-Islamic activists over their supposed operations in Israel.
Financial impact
Consumers increasingly link their purchasing decisions to their ethical and political views, which can impact a company's public image and customer base. In Egypt, Jordan, and Morocco, venues such as Starbucks and McDonalds are facing empty stores as customers show their unhappiness with ongoing pro-Israel policies by voting with their wallets. In Turkey, Coca Cola products have been removed from sale at government offices.
While it can be easy to disregard these social media discussions based on scale, it's important to consider the window they offer into the minds of consumers. Historically, Coca Cola and other large multinational corporations have managed to navigate through various geopolitical landscapes in a fairly A-political manner. But with geo-political tensions and domestic divisions on the rise, this will be harder to achieve. And Coca Cola has been stung before. Historically the company has always had a large presence in Arab countries. But in 1966, the Anti-Defamation League accused the company of obeying the Arab boycott of Israel on the grounds that Coca Cola had not given an Israeli bottler a franchise even as it sold elsewhere in the Middle East. Coca Cola responded too late, and by the time they had found an Israeli partner the damage had been done, and the company was forced out of Arab markets by 1967, not returning until the 1980s.
It’s too early to discern how these localized boycotts may impact the overall financial health and stock performance of Coke. Indeed, according to company statements and open source reporting, Coca Cola revenue and stock has not experienced a decline since the conflict in Gaza began. However, it will not be until Q4 is over analysts will understand if boycotts achieved any real goals.
Outlook Coca Cola will need to watch this issue closely in coming months. While the company has so far managed to avoid any security incidents amidst the Gaza conflict,brands like Starbucks and McDonalds have faced protests at some of their locations. It’s likely that Coca Cola could fall victim to the same activities in the shorter-term, especially given the surge in anti-Semitism since October 7. ADL documented 312 anti-semitic incidents from October 7-23, 2023, with 190 of these directly linked to the Israel-Gaza conflict, according to a recent report. The potential risk of anti-Semitic threat actors targeting Coca Cola due to its alleged connections with Israel is not negligible.
Beyond this, any policy missteps by the company with regards to operations in Israel and the Arab world could easily create a communications and security crisis. The company would do well to prepare for a viral social attack and how that could translate to real-world harm.
