In Saudi Arabia, Pepsi is the market leader and has been for nearly a generation. Part of this is due to the absence of its archrival, Coca-Cola. For nearly 25 years, Coke has been exiled from the desert kingdom. Coca-Cola's presence in Israel meant that it was subject to an Arab boycott.
Because of this, Pepsi has an 80% share of the $1 billion Saudi soft-drink market. Saudi Arabia is Pepsi's third largest foreign market, after Mexico and Canada. In 1993, almost 7% of Pepsi-Cola International's sales came from Saudi Arabia alone.
The environment in Saudi Arabia makes the country very conducive to soft-drink sales: alcohol is banned, the climate is hot and dry, the population is growing at 3.5% a year, and the Saudis' oil-based wealth "make it the most valuable market in the Middle East". Coca-Cola, long known as "red Pepsi", has finally started to fight back.
The battle for Saudi Arabia actually began 6 years ago, when the Arab boycott collapsed and Coca-Cola began to make inroads into the Gulf, Egypt, Lebanon, and Jordan.
The start of the Gulf War, however, temporarily stunted Coca-Cola's growth in the region. Pepsi's 5 Saudi factories worked 24 hours a day to keep the troops refreshed. The most significant blow to Coca-Cola's return to the desert, however, came at the end of the war, when General Norman Schwarzkopf was shown signing the cease-fire with a can of diet Pepsi in his hand.
Coca-Cola aims to control 35% of the Saudi market by the year 2000. Coca-Cola, which plans to pour over $100 million into the Saudi market, is focusing on marketing to get there. Recently, it shipped some 20,000 red coolers into Saudi Arabia over the last 9 months.
Also, Coca-Cola put $1 million into sponsoring the Saudi World Cup soccer team. This alone has doubled Coca-Cola's market share to almost 15%. America's Reynolds Company is among the investors looking to cash in on Coca-Cola's return to Saudi Arabia.
The company is among the investors in a new factory, which, by 1996, will be producing 1.2 billion Coca-Cola cans per year. This equates to nearly 100 cans for every Saudi in the country. Pepsi, trying to fight off the Coca-Cola onslaught, has responded with deep discounting.
Because of this, Pepsi has an 80% share of the $1 billion Saudi soft-drink market. Saudi Arabia is Pepsi's third largest foreign market, after Mexico and Canada. In 1993, almost 7% of Pepsi-Cola International's sales came from Saudi Arabia alone.
The environment in Saudi Arabia makes the country very conducive to soft-drink sales: alcohol is banned, the climate is hot and dry, the population is growing at 3.5% a year, and the Saudis' oil-based wealth "make it the most valuable market in the Middle East". Coca-Cola, long known as "red Pepsi", has finally started to fight back.
The battle for Saudi Arabia actually began 6 years ago, when the Arab boycott collapsed and Coca-Cola began to make inroads into the Gulf, Egypt, Lebanon, and Jordan.
The start of the Gulf War, however, temporarily stunted Coca-Cola's growth in the region. Pepsi's 5 Saudi factories worked 24 hours a day to keep the troops refreshed. The most significant blow to Coca-Cola's return to the desert, however, came at the end of the war, when General Norman Schwarzkopf was shown signing the cease-fire with a can of diet Pepsi in his hand.
Coca-Cola aims to control 35% of the Saudi market by the year 2000. Coca-Cola, which plans to pour over $100 million into the Saudi market, is focusing on marketing to get there. Recently, it shipped some 20,000 red coolers into Saudi Arabia over the last 9 months.
Also, Coca-Cola put $1 million into sponsoring the Saudi World Cup soccer team. This alone has doubled Coca-Cola's market share to almost 15%. America's Reynolds Company is among the investors looking to cash in on Coca-Cola's return to Saudi Arabia.
The company is among the investors in a new factory, which, by 1996, will be producing 1.2 billion Coca-Cola cans per year. This equates to nearly 100 cans for every Saudi in the country. Pepsi, trying to fight off the Coca-Cola onslaught, has responded with deep discounting.