Ahead of the New Year weekend, Nour was doing her supermarket shopping for a small gathering bringing together four couples and their children aged between eight and 14. In her shopping cart there were a wide range of soft drinks.
“We don’t drink alcohol, and for gatherings like New Year’s Eve fizzy drinks are essential. I serve them with nuts, sandwiches, and all types of finger food,” she said.
Nour’s cart contained several colourful bottles of Spathis, one of the oldest made-in-Egypt soft drinks that has been making a slow but steady comeback over the past couple of years.
Nour first “discovered” this drink in the summer of 2020. “It was the first summer of the pandemic, and I was doing my shopping with my daughter Malak. She pointed to a bottle of Spathis, and we picked out three for her and her two sisters. They all liked it, and now we get it every once in a while for them —for the weekends or the summer holidays,” Nour said.
The colourful bottle that the then nine-year-old Malak picked out was a Spathis classic — red apple in a plastic bottle with an easy-to-twist cap. Malak liked the red apple flavour, which is not very common in the fizzy drinks market in Egypt. According to her mother, “the girls also probably liked the fact that the drink has a lot of soda, which makes it bubbly when they pour it in a glass, and that it has a strong and sweet flavour.”
Nour, in her mid-30s, had not been introduced to this drink before, but her parents, in their early 60s, were familiar with the Spathis trade mark. They welcomed a few bottles of the ultimate classic: Spathis lemonade soda.
According to Youssef Talaat, chair of the board of the Spiro Spathis Company which makes the drink, “it was precisely this mixture of curiosity and nostalgia that allowed for the re-introduction of the drink in a market dominated by international labels and growing competition.”
It was in 1909 that Nicolas Spathis, a Greek Alexandrian, started a business making lemonade soda drinks that he sold in green glass bottles. Twenty years down the road in Cairo, Spiro, a nephew of Nicolas, started a bigger business that carried his name. It also carried the logo of a buzzing bee, an association with the apiaries that the family was then running.
In addition to the lemonade soda starter, Spiro, working out of his factory on the then very happening Rue Emadeddin in Cairo, added the red apple fizzy drink that was also very popular.
Hamed, an older attendant at one of the few remaining bars in downtown Cairo, recalls that both drinks were not just soft drinks but also served as the base for cocktails.
CHANGING TIMES: Spiro’s son and daughter kept the business running in Egypt after the death of their father in the early 1950s. According to Hamed, it was around 1977, when he started working as a bar attendant, that the decline of this previously buzzing bee started.
This was the moment of the Open Door economic policy that allowed big international companies to enter the Egyptian market with heavy campaigning that attracted clients eager to explore the new brands.
It was more about the introduction of US soft drinks and fast-food chains that started opening up stores in Downtown Cairo and elsewhere than about the declining quality of national products, Spathis included.
Hamed says that it took fewer than 10 years for demand to be almost fully directed towards the new drinks. Local drinks, except for the famous Stella beer, were pulling out, first into limited budget markets and then out of the market altogether.
According to Talaat, however, with the introduction of the first wave of the International Monetary Fund (IMF)-sponsored economic reforms in the early 1990s, “what we call class B of the market expanded.” This allowed national soft drink manufacturers, including ASPA, the company of his father and uncle, to find a place.
Talaat added that the fact that the 1980s and early 1990s saw a decline in the alcohol market with the increasing association between alcohol and poor religion practices meant that “more and more people were moving to replace alcoholic drinks with soft drinks.
“This allowed for the expansion of the market in general and also for a wide range of products at a wide range of prices,” he added.
Talaat said that the heavy campaigning of the international soft drink companies that were joining the Egyptian market “indirectly” promoted the concept of consuming soft drinks in general as they were being branded to associate fun, good digestion, and leisure time.
Soft drinks became what people would share in the evenings and what they would drink at birthdays, parties, and weddings. “This was the case in summer as in all other seasons,” he added.
All this led to the social-media campaigning that relaunched Spiro Spathis in December 2019. “In almost every house and certainly in almost every café there is a slot for soft drinks, big or small, all year round. This is what has been keeping the business going and expanding it for smaller firms like ours,” he said.
The Talaats originally started their soft drinks business in Suez in the early 1970s, aiming at the governorates of the south. However, with the 1973 War the business moved out of Suez and was relaunched in Ain Shams in Cairo.
The Open Door policy soon created growing consumerism or what investors like the Talaats call “growing shopping trends.” Whatever the label, the market for soft drinks was expanding. According to Saber, a sales assistant in a Downtown grocery, by the mid-1980s, when he started working, most houses would buy boxes of soft drinks for the summer.
“Some would buy 10 bottles every three days or so,” he said. By that point, it was new drinks produced in Egypt by multinationals that controlled the market. “I am not sure why, but I think it was part of the mood of the time of looking to imported items and international brands. Maybe it was considered a form of modernisation,” Saber said.
BUSINESS SCHEMES: The only surviving member of the Spathis family, the daughter of Spiro himself, resisted calls to relaunch the business.
Yet, by the late 1990s she was willing to accept that the bee that had been buzzing since the early decades of the 20th century was now failing. In 1998, the company and the brand were sold to ASPA.
“The production lines by that time were really old, even for the class B market that our business had targeted. Interest in local brands was not great either at that point in time,” Talaat said. However, he added that taking over Spathis seemed a good bet to make for the future.
“We thought there was potential there. We were not thinking that we would relaunch the brand the way we did, but we saw business potential,” he said.
It took the Talaats close to a quarter of a century to start the relaunch, which required entirely new production lines and a new concept. “Things were changing, and the competition was bound to be hard, especially as by 2017 or 2018 when we started working on the relaunch, the multinationals already dominated the market,” Talaat said.
It was not just the introduction of new production technology that helped Spathis to be “comfortably re-launched.” There were also other factors, including the decision of the company to mix “something old with something new.”
“Re-introducing the original two flavours was essential, not just because of the ‘nostalgia’ element, which was of course key to our relaunch, but also because the lemonade soda is very compatible with the dominant Egyptian taste for fizzy drinks and because the red apple flavour was not very common, either from local companies or the multinationals,” Talaat said.
He added that at the same time there was the introduction of another “all-time favourite for fizzy drinks in Egypt, mandarin.” Then, he said, “came the popular taste of pineapple that was not available as a fizzy drink but only as a non-alcoholic beer.
“To compete in a market dominated by tycoons, one has to create a particular niche,” Talaat said. It was the clever crafting of this niche that allowed Spathis products to slowly climb up the ladder to the higher end of the market, “even if with just small margins”.
The test was the summer of 2021, when profits started to pick up significantly after an already successful market performance in Ramadan and Sham Al-Nessim, among the high seasons for soft drinks sales in Egypt.
Despite the negative impact of the Covid-19 pandemic on the market in general, Talaat said that the company was “satisfied with the performance of the relaunched Spiro Spathis during the past couple of years.” He added that it is planning to introduce new flavours, new sizes, and diet versions of the drinks ahead of next summer.
“Soft drinks sales pick up with every holiday season, but ultimately the summer is the real test, and in Egypt the summer starts right after Easter and lasts for nine months. So, we are currently busy preparing for May 2022,” he said.
COMPETITION: The challenge that the new owners of Spiro Spathis had was not just about re-branding, but also about plans by the multinationals to expand in Egypt.
“This was a tough challenge because they work with big budgets and big promotional campaigns that no local company can afford,” Talaat said.
According to Salma Hussein, Middle East and North Africa (MENA) regional research manager at the Friedrich-Ebert-Stiftung, a German NGO, the hegemony of the multinationals over the soft drinks business in Egypt cannot be underestimated, and their ability to force much smaller local businesses to sell or sink is only too obvious.
“Their domination of the market is clear, and smaller businesses are allowed to survive for as long as they remain within the limited range of five per cent or so,” Hussein said.
This is not just a function of the power of the budgets of the multinationals. It is, she explained, also a function of the lack of efficient mechanisms preventing monopolies. “There is a monopoly authority in Egypt, but it is unfortunately short on capacity and on efficient legislation that could enable it to act promptly to defend local industries,” Hussein added.
She said the dominance of multinationals, big regional companies, or very large Egyptian companies is a feature of the food industries in Egypt. The negative impact of this goes beyond the limits on expansion and profits of smaller local companies, she argued.
The business patterns of the large companies significantly limit profit margins for medium-sized traders in favour of augmenting the profits of companies that divert their profits out of the local economy, she concluded.
Still, Hussein noted, there is a considerable expansion in the market of soft drinks and packed pastries and crackers. This, she explained, is not necessarily a function of successful business models. It is rather a function of the “expanding context of poverty and hunger.”
More and more, she said, people are counting on less expensive food items that are essentially composed of sugar and carbohydrates at the expense of the healthier, but probably more costly, alternatives of fruits and vegetables.
According to Ahmed Ismail, consultant of internal medicine, diabetes, rheumatology and immunology, the impact of this pattern on the health of Egyptians has been “very disturbing”.
“This pattern of indulging into fast food and soft drinks has been taking over during the past two to three decades – and it has not just been in the context of poverty, but also in the context of having larger budgets to spend on buying high-end fast food and soft drinks,” Ismail said.
The outcome, he added, has been increasing numbers of cases of diabetes and obesity, coupled with malnutrition, digestive disorders, cardiological problems and a wide range of immunity issues.
And, he added, it is a vicious circle. “People get overstuffed with a fast-food meal so they opt for a fizzy drink to help digestion and shortly after they are again hungry and craving a big portion of dessert or another big meal and so on,” he said.
In his practice, Ismail said, he has often heard patients, of both genders and of all socio-economic backgrounds, admit a high daily consumption of fizzy drinks and fast food as a source of pleasure. For some people, the consumption of fizzy drinks has become an "addiction".
“There has certainly been a significant change of eating patterns in our society; it is no longer fashionable for people to have lunch at home where they get a balanced meal, even if on a very low budget; it is much more common to order and eat out,” he said. “And whether one is ordering on a limited or a big budget, the impact on health is bound to be negative,” he argued.
According to Ismail, there is a definite need for an effective awareness campaign to introduce a change – or maybe a change back – in the eating preferences of people.
“I think people have to be told every day that when one consumes a bottle or a can of any fizzy drink they are effectively consuming a bottle full of white sugar, which is destructive to the health of young people and older people with some chronic diseases,” Ismail said.
He added that soft drink companies should not be allowed to promote that their products “enhance good digestion” simply because “this is not true.”
The promotion of sugar-free fizzy drinks, Ismail added, should come with a reminder that the aspartame and other artificial sweeteners used in low-calorie drinks are related to cancer.
“Egypt is already having very high rates of Type 2 diabetes that come with excessive eating and the consumption of sugar and sweets. It also has quite significant high rates of cancer; we don’t need to make our challenge tougher than it already is,” Ismail stressed.
“Usually, I advise my patients to cut out fizzy drinks and fast food completely or to significantly reduce their consumption of these items,” Ismail said.
A moderate and unharmful consumption of soft drinks in the medical view of Ismail is only the occasional bottle. “Maybe one evening every couple of weeks or alongside a big family lunch, but never ever, not even with the young and healthy, on a daily basis.”
Ismail is aware of the fact that the pandemic had especially in the weeks of partial lockdowns came with some excessive eating and drinking habits for some people. “This was a very bad thing because people were sitting at home and not moving and they were consuming above their average of fizzy drinks as they watched TV for hours,” he said.
“However, the fact of the matter is that obesity and low immunity, which are both among the very common side effects of fast food and fizzy drinks, are among the most threatening factors for patients diagnosed with COVID-19,” he said.
Ismail accepts the fact that fizzy drinks have become part of the lives of so many people all around the world. He is just hoping that the health awareness that has partially picked up with the pandemic will encourage people to cut down on these drinks and opt for healthier options.
Talaat, for his part, is aware of the growing health awareness mood. This is why he is planning to introduce sparkling water that could cater for the new “healthy segment of the market” who wish to replace their old soft drinks with a glass of sparkling water and a slice of lemon or a slice of orange.
“But the market for soft drinks will always be there,” he said. “Out of social responsibility we do not really promote our drinks as a match with fast food but rather as a match with good healthy local inexpensive meals like falafel or Koshari; we are also promoting our drinks to be consumed in contexts of physical movement on a beach or in a garden,” he argued.
*A version of this article appears in print in the 6 January, 2022 edition of Al-Ahram Weekly.
Short link: