How Much Impact Do Boycotts and Buycotts Actually Have on Brand Sales?

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How Much Impact Do Boycotts and Buycotts Actually Have on Brand Sales?

Political controversy triggered by Goya CEO’s Political Statements in 2020 Sheds Light

Key Takeaways:

 

  • The buycott generated an increase in sales that lasted for three weeks, especially among first-time buyers and in heavily Republican counties.
  • Social media chatter and news media coverage was largely negative about the brand and incorrectly predicted severe negative consequences for the brand.
  • Goya’s Democratic-leaning core customer base, largely made up of Latinos, did not decrease their purchases of the brand.

 

BALTIMORE, MD, November 3, 2022 – At a campaign event in the midst of the 2020 U.S. presidential election, the chief executive officer of Goya, a large Latin food brand, publicly praised and endorsed then-president Donald Trump. The comments triggered both a boycott and a counter “buycott” movement in support of the brand. 

Do such boycotts or “buycotts” have any impact on brand sales in both the short- and long-term? These questions were at the center of a study that found the immediate increase in Goya sales due to the buycott, while significant, was not sustained over time. At the same time, the researchers found that the boycott did generate a small countervailing impact in heavily Democratic counties, but that effect was also temporary.

The researchers’ study, published in the current issue of the INFORMS journal Marketing Science, titled “Frontiers: Spilling the Beans on Political Consumerism: Do Social Media Boycotts and Buycotts Translate to Real Sales Impact?” is authored by Jūra Liaukonytė of Cornell University, Anna Tuchman of Northwestern University and Xinrong Zhu of the Imperial College Business School in London.

“After the CEO made his statements, Goya sales temporarily increased by 22%,” says Jūra Liaukonytė. “But this net sales boost fully dissipated within three weeks.”

Anna Tuchman adds, “There was a lack of empirical evidence on buycotts, and we wanted to know, ‘What was the net effect of the boycott versus the buycott movements on sales? How long did the sales impact last, and how did it vary across local markets based on political affiliations?’”

To get the answers, the researchers analyzed sales data over time and by market, as well as the rates of social media and news media activity on the issue.

“Goya’s sales were historically stronger in more Democratic markets,” says Xinrong Zhu. “Among consumer packaged goods (CPG) companies, Goya is one of the most Democratic brands. Consistent with this, we found that the boycott generated 75% more chatter on social media than the buycott. And related media coverage was overwhelmingly dominated by the boycott narrative.”

Still, the researchers found that the actual sales response went in the opposite direction, which suggested that in the case of political consumerism, social media metrics may not be a good proxy for actual demand. In fact, the buycott effect dominated the boycott effect, increasing the company’s sales by around 22% on net in the weeks after the scandal. The effect, however, was short-lived. 

“We found that the temporary increase in Goya’s sales came from consumers not traditionally thought of as the brand’s core customers,” says Tuchman. “First-time Goya buyers were from heavily Republican areas who did not continue buying the brand, and thus were not particularly valuable in the longer term.” 

In heavily Democratic counties, the researchers found that the buycott effect was outlasted by a modest boycott effect that persisted up to eight weeks after the event. At the same time, the study authors found that the brand’s most valuable customers, Latinos, did not decrease their purchases of Goya products.

Ultimately, neither the boycott nor buycott had a lasting impact on sales.

 

Link to Study

 

About INFORMS and Marketing Science

Marketing Science is a premier peer-reviewed scholarly marketing journal focused on research using quantitative approaches to study all aspects of the interface between consumers and firms. It is published by INFORMS, the leading international association for operations research and analytics professionals. More information is available at www.informs.org or @informs.

 

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