00:54 27/11/2023 How Much Do Boycotts Affect a Company’s Bottom Line?

Jesús Escudero

MARKETING JAN 1, 2023

How Much Do Boycotts Affect a

Company’s Bottom Line?
There’s often an opposing camp pushing for a “buycott” to support the company.
New research shows which group has more sway.
BASED ON THE RESEARCH OF
Jura Liaukonyte Anna Tuchman Xinrong Zhu

When a company you like takes a political stance that disagree with—you may feel pressured to join a
you oppose—or the CEO makes a statement you boycott.

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But will it get the results you want?

After all, for every punch thrown on the

internet, someone is ready with a
How much impact do
counterpunch. Another camp, supportive of
the policy or politician, may urge their boycotts really have?
followers to go shopping. That opposing
move is called a buycott. In July 2020, Robert Unanue, the CEO of
Latin food purveyor Goya—who had
Anna
Anna Tuchman,
Tuchman a professor of marketing at
AnnaTuchman
previously hit a nerve with his
Kellogg, wanted to find out what really
inflammatory remarks about immigration
happens to consumer behavior —and sales
—praised then-President Trump during a
—when a company finds itself in a political
meeting at the White House. The comments
social media storm. “While there have been
triggered immediate backlash, and many
a lot of boycotts in the past, there are more
Latino leaders called for a boycott. The
buycotts happening now,” she says.
hashtags #Goyaway and #BoycottGoya
Business leaders want to understand how trended on Twitter.
social media outrage affects their bottom
Meanwhile, Trump supporters started a
line, Tuchman says. Earlier research mainly
#BuyGoya and #BuycottGoya
looked at boycotts, but Tuchman was
countermovement.
interested in the more comprehensive view
of the impact of simultaneous boycotts and At the time, the impact on the company of
buycotts. #BoycottGoya versus #BuycottGoya was as
clear as black-bean soup. Media reports
When Tuchman and her coauthors, Jūra Jūra
Jūra
predicted calamity for the company: media
Liaukonytė
Liaukonytė of Cornell University and
Liaukonytė
outlets posted over 1,500 stories with Goya
Xinrong
Xinrong Zhu
Zhu of Imperial College, dove deep
XinrongZhu
in the headline, and only 18 mentioned the
into one company’s experience, they found
buycott; and calls for a boycott far
the buycott effect swamped the boycott
outnumbered calls for a buycott on Twitter.
action, and sales actually increased. But the
Yet Unanue claimed sales were up 1,000
impact evaporated in just a few weeks.
percent.
It’s a counterintuitive result, Tuchman says.
To find out the actual impact on sales,
Calls for a boycott often outnumber those
Tuchman and coauthors obtained detailed
voices who offer the company support on
shopping data from the market-research
social media or in news articles. “In the
company Numerator for 33,486 households
absence of sales data, you’d think it’s
that purchased a Goya product at least once
probably catastrophic for the brand.”
between January 2019 and December 2020.
The information included dates of shopping
trips and the quantity, prices, brand name,

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and parent brand of each purchased

product. The data also included
demographic information such as
household size, income bracket, age,
Why didn’t the boycott
race/ethnicity, and zip code. The
researcherss were able to match the have a bigger impact?
households to county-level voting statistics
from the 2020 presidential election. Of course, the Goya boycott and buycott
took place within the larger context of U.S.
Over a two-week period immediately after
political polarization. Research shows there
the CEO’s remarks, 16.9 percent of buyers
is a political divide among U.S. consumers
who bought Goya products were first-time
in their brand preferences—a divide that
Goya buyers—evidence of the buycott’s
only increased after the election of Donald
impact. The buycott movement
Trump.
disproportionately brought in first-time
Goya buyers from heavily Republican areas Tuchman and her coauthors calculated
—sales increased by 56.4 percent in heavily that, pre-scandal, of 300 top consumer-
Republican counties. packaged-goods brands, Goya was the most
Democratic, based on the high
Meanwhile, “we find that the brand’s most
concentration of its customers in left-
valuable customers, Latinos, did not
leaning counties.
decrease their purchases of Goya products,
despite vocal support for the boycott This makes it a somewhat unusual case. “In
movement from prominent Latino figures,” the majority of cases, when brands take
the paper points out. political stances, they are trying to give
their core customer base what they want to
Altogether, the buycott effect overwhelmed
hear,” Tuchman says. “In this case, the
the boycott effect, raising Goya’s sales 22
message touted by the CEO was actually in
percent during the two-week period. But
opposition to the preferences of many of the
the impact was temporary; there was no
core customers.”
detectable sales increase after three weeks.
(In their analyses, the researchers So what accounted for Goya’s customers’
controlled for the effects of seasonal loyalty during the boycott? Tuchman points
variations, price changes, holiday impacts, out that brand loyalty can be powerful—
and the longer-term increase in sales driven particularly for products that do not have
by the pandemic.) an equivalent substitute, such as Goya’s
Adobo seasoning.

And, in one important way, the failure of

the boycott in the face of a buycott was
completely predictable, Tuchman points

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out. Only seven percent of American She and colleagues are currently
households were already buying Goya investigating how other companies fare
products regularly and could effectively during boycotts. For example, Tuchman
take part in a boycott. In contrast, any
recently published data showing a boycott
shopper can participate in a buycott. of the audio-streaming-service Spotify did

As for buycotters, the stakes of switching not stop growth in its subscriber base.
grocery-store brands are pretty low: you can
There is one potentially confounding factor
always switch back. Buycotts on higher- that Tuchman and other researchers say
ticket items, where consumers are likely to needs to be examined. When a brand is in
be more risk-averse, may be less effective. the news or trending on social media, the

Finally, grocery-store brands are not highly wave of publicity may act like advertising to
boost sales, meaning people may be more
visible signifiers of political identity. “No
one knows what brand of beans your family likely to buy a product not because they’re

buys,” Tuchman says. Products that are actively participating in the buycott, but
more visible, such as clothes or cars with a because they’ve heard the brand name a lot

brand logo, may see a larger or longer-term recently.

impact from boycotts or buycotts.
While business leaders shouldn’t assume
their experience in a boycott will be the
same as Goya’s, they can still take comfort
in these results, Tuchman says.

What can company “I’d feel a sense of relative calm knowing

leaders learn from that the building evidence suggests, even

when there is a big scandal, the effects don’t

Goya’s experience? seem to last very long,” she says.

Tuchman is quick to say the Goya case may

be unique, not least because Goya is a FEATURED FACULTY
private, family-owned business, so its CEO
can say whatever he wants without Anna Tuchman
blowback from shareholders or a board of Associate Professor of
directors. Marketing

But the extreme political difference

between Goya’s CEO and his core customers
ABOUT THE WRITER
provides strong empirical evidence that a
boycott does not equate to a poor business Melody Bomgardner is a freelance writer in Bend, Oregon.
outcome if a buycott is also in effect,
Tuchman says.

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ABOUT THE RESEARCH

Liaukonytė, Jūra, Anna Tuchman, and Xinrong Zhu. 2022.
“Frontiers: Spilling the Beans on Political Consumerism: Do
Social Media Boycotts and Buycotts Translate to Real Sales
Impact?” Marketing Science.
Read the original
Liaukonytė, Jūra, Anna Tuchman, and Xinrong Zhu. 2022.
“Rejoinder: Spilling More Beans on Political Consumerism: It’s
More of the Same Tune.” Marketing Science.
Read the original

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