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Thu 16 Aug 2018 02:12 PM

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Saudi's Almarai takes brand beating after boycott campaign

BrandIndex says Saudi Arabia's biggest dairy saw big declines in its brand perception during July following a price increase

Saudi's Almarai takes brand beating after boycott campaign

Saudi Arabia’s biggest dairy has seen big declines in its brand perception among residents in the kingdom during July following a price increase, BrandIndex has announced.

The company became a boycott target of citizens and a social media campaign launched circulating photos of a popular yogurt drink plastered with a red X and the phrase “let it go sour” after Almarai raised the price of a litre of milk by 0.25 riyals, or 7 cents.

In a statement, the dairy said it raised prices because its own costs went up after the government cut energy subsidies and introduced new fees on foreign workers.

BrandIndex, the region’s only daily brand perception tracking study, said the campaign negatively impacted the brand that only a few weeks before had achieved the top position in the YouGov BrandIndex Saudi Arabia rankings for 2017-2018.

BrandIndex, which tracks 16 key metrics for around 500 brands in the kingdom on a daily basis, said on 10 of these metrics Almarai saw a "statistically significant decline" in scores.

Since July 3 when the “let it go sour” social media campaign started, Almarai’s Index score declined by over 26 points from a relatively stable score of +52.2 down to +25.5.

Perceived value, as a direct result of the price rise, declined from +48.9 on July 3 down to a score of +17.5 a month later, the lowest registered for Almarai since tracking of the brand on BrandIndex began in April 2015.

In addition, sentiment towards the brand also declined from +42.1 on July 3 down to +9.0 in the same time frame. This has directly impacted consideration for the brand which declined from 55 percent to 43 percent.

The boycott campaign against Almarai comes hot on the heels of a similar boycott around price hikes suffered by Centrale Danone in Morocco. The impact of that boycott on Danone was significant with reported declines in revenue and market share by up to fifty percent.

"It remains to be seen if Almarai will suffer a similar drop in Saudi Arabia or if the recent intervention by the ministry of commerce, which essentially forced the brand to revoke the price increase introduced in early July, stems off any lasting impact on the brand," BrandIndex said.

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