The Barilla Boycott: Companies Wade In; Consumers React
Oct 6th 2013 9:00AM
Updated Oct 6th 2013 9:02AM
Who would have guessed pasta could stir the public pot? Who knew that consumers' chicken sandwich options could spark crying foul about serving fowl? Consumers get angry over businesses and their relationship to many of the biggest topics of modern times, and some don't want to take it anymore.
In just one example in current events, well-known companies like Barilla and Chick-fil-A have faced massive public anger concerning comments or stances against homosexuality and gay marriage.
Very recently, the president of Italian pasta company Barilla commented that its ads wouldn't feature homosexual couples; Guido Barilla wanted to show "traditional" families. Outraged, some stated that they would no longer buy Barilla products. He has apologized, stating that he will reach out to gay groups to discuss what family units look like in the modern world.
Not as recently, consumers widely discovered that Chick-fil-A President Dan Cathy's religious and conservative beliefs included the view that marriage is defined as the union between a man and a woman. A major public outcry began, including threats of boycotts and awareness-raising, such as "kiss-ins."
Wearing hearts on sleeves
In these days of hot topics, sharp opinions, and social-media scrutiny, plenty of strong yet honest opinions or stances have outraged people with diverse beliefs.
A couple of years ago, Men's Wearhouse supported the Occupy Oakland rally, an offshoot of the Occupy Wall Street movement, by closing an Oakland, Calif., store and putting a sign in the window that boldly read, "We stand with the 99%."
A couple years before that, Whole Foods Market founder and co-CEO John Mackey's 2009 op-ed in The Wall Street Journal suggesting ways to solve health care issues without government intervention was met with fiery angst from some readers.
Whichever side one personally falls on, honesty deserves respect. Many, many companies and their managements are too afraid to reveal any controversial strategies or true opinions about anything at all.
The surprise factor
Sometimes the surprise element can be the worst part of these issues, since many people feel duped. However, conducting some Web searches about corporate managements and CEOs often can reveal many CEOs' beliefs or corporate policies in black and white way before controversies erupt.
Whole Foods' John Mackey's beliefs have been reported for years -- and yes, in mainstream news for those paying attention. His recent book Conscious Capitalism publicly outlines his beliefs, and those of many other companies and managements that operate within the perspective. These are positive, stakeholder-friendly, holistic businesses that certainly aren't looking to exploit people and beat them down instead of pulling them up.
Former Costco CEO Jim Sinegal has often been quoted regarding his beliefs in treating employees well in order to build a strong foundation for the warehouse retailer. That information has been out there for ages, but it's more recently reached mainstream knowledge.
Dan Cathy's feelings about religion and the Chick-fil-A business aren't a particular secret either, but it still shocked. However, just the simple cue that the restaurants close on Sundays might have caused some curiosity as to why they do so. (Employees don't have to go to church, but they are guaranteed a day without work.)
Sometimes, the public's dislike of a company can result in the spreading of disinformation on the Internet, too. Monsanto is a lightning rod for consumer angst over its core business: genetic modification for agriculture.
A recent social media meme claimed that Monsanto "owned" just about every huge consumer goods company for boycott purposes. It was impossible not to take the opportunity to debunk this. It's outlandish that Monsanto could possibly have the money and the monopolistic power to "own" absolutely massive companies like Pepsi and Kellogg. Lies should not be used to persuade.
Don't underestimate the power of the pocketbook
In addition to sounding off via social media, consumers and investors can vote with their dollars, and by simply stop showing up. They can write letters and sign petitions to companies to explain why they no longer consume companies' products. Investors can contact companies' investor relations office and tell them why they're selling their stock, or they can simply decide not to buy.
Whole Foods and Costco are both public companies, so we can check their financial numbers, where we'd see that both have been doing great in terms of share price and financial metrics over recent years. Whole Foods and Costco have both built in goodwill from their more positive business aspects, and therefore it doesn't seem like customers have defected in droves, and in fact, some business elements might have brought customers in. Both companies do offer positive aspects for shoppers, and their business metrics and stock returns have been robust over the years.
Chick-fil-A's a private company, as is Barilla, so we can't check their financial numbers, but we can watch to see how customers react and how the companies react to their customers.
For any company finding itself in the spotlight, some customers may leave, some shoppers may come, and others may not care in relation to the issues at hand. Still, eventually, PR issues could indeed inspire change and even occasional real changes of heart. Consumer opinion can and does shift on a massive level, and real evolution will take place. The dollar votes do count.
Boycotts are legitimate forms of expression, power, and brand effects. Voting with one's dollars is part of a healthy marketplace, and in fact, choices are what it's all about, in investing, too. For those who want to use a values-based stance in their own shopping and investing, it's better to conduct the research before jumping on the controversy. The truth is out there.
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The article The Barilla Boycott: Companies Wade In; Consumers React originally appeared on Fool.com.Alyce Lomax owns shares of Costco Wholesale. The Motley Fool recommends Costco Wholesale and PepsiCo. The Motley Fool owns shares of Costco Wholesale and PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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