Coke Muscles In On Arabian Pepsi Territory

03/28/2008 02:45 am ET | Updated May 25, 2011
  • Raed Rafei Los Angeles Times

Prompted by a recent surge of prosperity in the Middle East, the giant American beverage companies have engaged in a fierce race to win the soft-drink allegiance of Arabs, especially youth. In the last few years, Coca-Cola Co. and PepsiCo Inc. have recorded more than 10% growth in their annual sales in the region, and executives from both companies say future prospects look promising.

Though the two soda giants have been global rivals for decades, the Arab world until recently was almost exclusively Pepsi territory. For almost 25 years, Coca-Cola was boycotted in many Arab countries over its alleged support for Israel. It started selling again in the Middle East in 1990 and has built its market share to about 35%, according to Ahmed Rady, the company's Bahrain-based Middle East marketing manager.

"Coca-Cola has finally found its ground here," Rady said. "What's beautiful about this part of the world is its thriving youth, and we are here to get these young people closer to their passions."