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Halal Industry

Gaza conflict: Local food brands rush to supplant disengaged global ones. Can the momentum last?

Israel’s war on Gaza has had a deep emotional impact on Muslim consumers around the world, creating an unprecedented “buy local” movement. Are homegrown brands ready to fill the void? 

The shock waves from the war on Gaza’s civilian population have reverberated throughout the Middle East, generating resentment against Israel and a sense of helplessness among fellow Arabs. 

As the conflict enters its fifth month, consumers across the region continue to use their purchasing power to avoid brands they perceive to be supporting the Israeli occupation, whilst redirecting their spending to alternative brands. Advocates said that this was their small way of taking a stand for Palestine.

Unexpected business boom

The movement, both sudden and intense, has paved the way for homegrown food brands to grow, and for halal consumers to rediscover local alternatives. 

But not all brands were prepared. 

Spiro Spathis, a 104-year old Egyptian soda brand which had been struggling to revitalize its popularity, scrambled to hire more workers and increase production after experiencing a 350% surge in its revenues since October. As consumers turned to local brands, the nostalgic soft drink made a huge comeback and for the first time, received franchise offers from Egypt and beyond. 

To meet the rising demand, Spiro Spathis made a hiring call for over 50 new employees, which ended up attracting some 45,000 applicants, chairman Morcos Talaat said in an interview with El Podcasters. The brand recently launched larger bottles and rolled out slogans like '100% Made in Egypt'.

A similar jump in consumer demand was seen by Matrix Cola, a Jordanian soda manufactured by snack and beverage producer Defaf Al-Nahrayn Company (DNC). 

Since the boycotts gained steam, DNC has expanded its distribution across Jordan by increasing its workforce and fleet, according to a report by Arab News. Moreover, the company created new social media pages for Matrix Soda, with slogans such as 'Made in Jordan' and '100% Jordanian'.

Grocery stores, too, have joined the movement. In Egypt’s Downtown Cairo district, Atalla Market rebranded itself as the 'first Egyptian-only goods supermarket', whilst expressing sympathy for Gaza and support for pro-Israeli brand disengagement. The grocery store now carries local dairy products by Egyptian companies Fern and El Hamd, as well as frozen food by Three Chefs and Koki, among others. 

The decision was praised by consumers and boosted Atalla Market’s sales, prompting it to launch a daily delivery schedule to cover all parts of Cairo as well as seek more workers. 

In the UAE, homegrown e-commerce grocery retailer Kibsons witnessed increasing demand for local products even before the calls to shun brands.

“There is clearly a buy-local movement in the country to support local entrepreneurs. Relative to just over two years ago, the number of local brands on our platform has more than doubled, the products more than tripled, and the turnover increased by over 25%,” Halima Jumani, director at Kibsons told Salaam Gateway.

“I believe the trend has just picked up pace and the stories and journeys of entrepreneurial success will serve as inspiration for many more product innovations and growth to come,” she said.

Kibsons, which has been operating in the UAE for more than 40 years, carries local halal brands such as Delektia, Carne Meats by Indoguna, and Golden Ibil. “For local businesses, a consistent demand is a pre-requisite to build capacity from a financial and operational planning perspective," said Jumani. 

Regional fast food chains gain ground

The rise of the buy-local movement has been particularly noticeable among quick service restaurants.

UAE-based Drip Burgers, a permanent pop-up restaurant concept that serves an Emirati-inspired burger menu, has seen its popularity grow in recent months. The brand, launched by an Emirati couple in 2021, recently opened its second location in Dubai.

“We have seen an increase in demand, and we donated to the Red Crescent to support those in the Palestinian conflict. The awareness we received from that initiative allowed us to be on people’s radar as a local business and one supporting a real cause,” Nadia Shah, CEO of Drip Burgers told Salaam Gateway.

“We have noticed that supporting local brands really carries a lot of weight within people’s hearts at this time. People understand the importance of this and are taking action to ensure businesses they care about survive and flourish.”

Drip Burgers is now incorporating more plans into its calendar to continue to raise awareness for Gaza and show support for local brands. 

“We are a community brand, and we showcase this on our socials and on our branding, including featuring the Palestinian flag at our events. We are not shy to mention and to support them, and our audience shows support back by acknowledging and commending us for the same,” said Shah.

In Saudi Arabia, BBQ chicken fast food chain Al Tazaj, which has branches in the UAE and Morocco, opened new outlets in recent weeks in Riyadh, Jeddah, and Makkah to cope with the increasing demand. The group had announced in November it was donating one million Saudi Riyals toward Palestine relief efforts.

Similarly, Saudi Arabia’s Al Baik, one of the most popular fast food chains in the region with more than 120 branches, has expanded since October, with new restaurants in Riyadh, Dhahran, and Tabuk. 

Bahraini burger joint Jasmi’s, too, has launched three new branches since October, including a 24-hour drive-thru location on King Fahd Causeway, which links the country with Saudi Arabia. It has more than 30 branches in Bahrain. 

The expansion came after the fast food chain announced donation of all proceeds from its delivery fees toward relief efforts in Palestine. The donations were made through Bahrain’s Royal Humanitarian Foundation for a week in October, and another in November. While the move was praised by consumers, many called on Jasmi’s to also replace Western beverage brands like Pepsi and Aquafina with local alternatives.

In Oman, local brand Moo Burgers appears to be benefitting from the changing position of diners, having announced a major expansion last November. The fast food chain, which has been promoting itself as a 'Omani brand competing with international restaurants, said it would be launching a new drive-thru network in 2024. 

“We are currently negotiating with an oil marketing company to purchase 17 stations from Al Qurum to Al Maabilah,” Moo Burgers said in an Instagram post. The brand is operated by Muscat-based hospitality company Qafila Al Madina.

In Jordan, coffee chain Astrolabe experienced a boom in business immediately after the calls to shun certain brands, with sales surging 30% at some locations, according to a recent Bloomberg report. 

Astrolabe has been vocal in its support for Gaza and has hosted several awareness-raising events as part of its Astrolabe Social Circle. The coffee chain is now looking to hire a new marketer ahead of the launch of its first coffee roastery in Amman.

Invest or wait?

Clearly, the shift in consumer preference has been a huge catalyst for local brands, who now have the opportunity to present themselves as permanent substitutes and prove that their quality can rival that of foreign brands.

Drip Burgers’ Shah expects this shift to be permanent. “The distress and destruction these conflicts have caused have really touched people deeply and moved them to make conscious decisions over their spending for the foreseeable future. I believe what everyone has learnt from all of this is how much power each individual truly has to affect change.”

Yet, while many brands are considering how to leverage this increase in demand, experts have cautioned against rushing into big decisions.

Mohamed Fattah, chairman of Egyptian NGO Nahdet El-Mahrousa and lecturer at the American University in Cairo cautioned against rapid growth in the wake of the conflict. “Egyptian companies should be patient before thinking about any expansion decisions after the boom,” he wrote in a LinkedIn post, several weeks ago. 

He said that immediate decisions regarding rapid growth would be a strategic mistake as companies need three to six months to observe market trends.

This perhaps explains why Egypt’s Atallah Market, despite skyrocketing sales and 12 franchise offers, chose not to rush into expanding.

Responding to calls for additional branches, the grocery store said last December that local brands needed time to establish themselves among consumers and that some did not have the production capacity to meet increased demand. 

“The reason for the rejection of some Western brands, no matter how obvious, is temporary where its scale and magnitude [might] not be the same as at the time of its peak now. It is not wise to set your strategy at the best-case scenario,” said Fattah. 

Unconsidered expansion, he warned, could cause financial and moral obligations on the investor that could completely destroy the business.

Instead, companies should make a temporary increase in production to cover the sudden surge in demand, whilst exploiting the growth in financial resources to develop the quality of their products and services, explained Fattah. 

“In this case, after things calm down, even if relatively, the consumer would choose the local product because of its quality and service.”