PepsiCo builds $82 million hub to serve UAE’s new generation of cola lovers

PepsiCo, whose signature soft drink has long rivaled or surpassed Coca-Cola in markets across the Middle East, is gearing up for future sales battles in the Gulf.

The 128-year-old corporate giant is now working with franchisee Abu Dhabi Refreshments Co. to build an $82 million bottling plant and logistics hub in the UAE capital, aiming to localize production and strengthen its distribution networks.

“What is most important is investing in the future and not just looking at what’s happening today,” Wael Ismail, Vice President of Corporate Affairs in PepsiCo’s  International Beverages division, told The Circuit.

Across the Middle East, U.S.-based PepsiCo has battled Coke through partnerships such as its contract with Saudi Arabia’s Qiddiya megaproject, a $40 billion sports and entertainment city backed by the kingdom’s Public Investment Fund. Strong ties with retailers, robust distribution networks and stylish Arabic-language marketing have been key to its success.

“If you look at Qiddiya, it’s an entertainment space,” Ismail said, “It makes sense for us to be there – this is where people are… having fun, enjoying their beverages.”

Worldwide, Pepsico signed a multiyear partnership with Formula One last year, covering trackside advertising, fan experiences and exclusive sponsorship rights for brands including Gatorade and Doritos through 2030.

In Abu Dhabi, the new manufacturing and distribution facility will be built in the KEZAD Logistics Park, a unit of state-owned AD Ports and one of several special economic zones where authorities have used tax incentives to attract large-scale investments in food, logistics, and manufacturing. 

Most recently, the war with Iran has heightened concerns about supply chain disruptions and food security, reinforcing the UAE’s push to expand localized manufacturing and reduce reliance on imports from far away.

“Despite wider geopolitical challenges across the region, we worked closely with authorities and strategic partners… to maintain uninterrupted delivery of essential products to the market,” Mohamed Itani, CEO of Dubai-based United Foods Co., told The Circuit. 

United distributes a broad range of products throughout the Gulf, including Toblerone chocolate, Oreo ice cream sandwiches and Sriracha Hot Sauce. Itani said the company has worked throughout the war with the Ministry of Economy and Trade, DP World and several ports to reroute shipments and maintain supply continuity across the Gulf.

PepsiCo sells more than Pepsi-Cola. In the Middle East, the company distributes a wide range of drinks and snacks, including 7Up, Mountain Dew, Lay’s Potato Chips and Doritos.

Other multinational companies in the UAE with major logistics operations include Unilever, Nestlé and Siemens, which have all expanded operations as the Gulf pushes to reduce dependence on imports and build domestic supply chains.

The rivalry between PepsiCo and Coca-Cola is legendary in the annals of corporate business. In the Middle East, politics plays a part. Coca-Cola’s entry into Israel in 1966 prompted many Arab countries to boycott the brand, giving Pepsi the opportunity to expand rapidly across the Arab world and become especially dominant in Saudi Arabia, Egypt, and Iraq. The competition continues to reflect regional politics, with both companies periodically facing consumer boycotts during major geopolitical conflicts because of their American identities.

KEZAD, established in 2010, now hosts more than 2,300 companies and competes with other industrial hubs in the region, such as Jebel Ali Free Zone in Dubai, King Abdullah Economic City in Saudi Arabia and Ras Bufontas Free Zone in Qatar.

The Abu Dhabi zone attracts companies with incentives such as 100% foreign ownership, full repatriation of profits and capital, eligibility for 0% corporate tax, and customs advantages for global manufacturers and logistics companies.

The PepsiCo project reflects a broader Gulf strategy in which logistics infrastructure, foreign investment and food security are becoming increasingly intertwined

“We are seeing a steady and sustainable increase in local production, particularly during peak seasons, driven by growing demand for fresher, more traceable, and locally sourced produce,” Mohammed Alrifai, Group CEO of NRTC, one of the UAE’s leading importers of fresh fruits and vegetables, told The Circuit.

Alrifai said that producing in the region lets international companies respond more quickly to market demand, improve supply chain resilience, and reduce their reliance on long-distance logistics. It also enables businesses to keep food fresher for longer and to trace shipments.

“By balancing global sourcing knowledge with local production and distribution infrastructure, international companies can build a more agile, resilient, and sustainable food ecosystem that benefits both businesses and consumers,” Alrifai said.

PepsiCo’s Ismail said that beyond selling soft drinks and snacks, the company is committed to addressing consumer demands, such as developing new hydration and zero-sugar products.

“We’ve been here for 60 years,” Ismail said. “Reinventing ourselves is something that we do here very well.”