The Barilla Boycott: Companies Wade In; Consumers React

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 (NYSE: MW  ) 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 (NASDAQ: WFM  ) 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 (NASDAQ: COST  ) 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 (NYSE: MON  ) 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.

Retail game changers
Speaking of consumer habits, the retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.


Read/Post Comments (9) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 06, 2013, at 11:04 AM, hbk72777 wrote:

    I've been buying Barilla for years, and will never stop.

    I'm sick and tired of people boycotting every damn company that has a different opinion of them. The world would be a boring place if we all thought alike.

  • Report this Comment On October 06, 2013, at 1:15 PM, lilyvonshtupp wrote:

    Boycott , schmoycott. LOLOL I just purchased 4 boxes of Barilla. Wont stop. LOL

  • Report this Comment On October 06, 2013, at 1:26 PM, Mangosalsa wrote:

    I wonder if the John Mackey mentioned as co-founder of Whole Foods is the same John Mackey who an investigator at the SEC believed he had evidence of in-sider trading by Mackey who was a Wall Street big shot at the time. That investigator submitted a request to interview Mackey--and he was fired. The SEC recently had to pay him $700,000 for wrongful termination.

    Voting with your dollars is a time honored right. Back in 2000 I was told by friends that the best place for Texas style barbecue in my Southern California town was a restaurant named "Taste of Texas". I love Texas style barbecue--whenever I drive thru Texas I always stop at towns like Ft. Stockton to have a meal. However, when I went into this joint I was immediately struck by a wall of anti-Gore and anti-Democrat posters behind the cash register. The owner was obviously vehemently pro Bush. That was his right--my right was to turn around and walk out of the store. I'm not a democrat, I'm a registered Independent--but subjecting me and other customers to his personal political opinions when I'm just trying to get a meal--I found it offensive.

  • Report this Comment On October 06, 2013, at 1:48 PM, Wasatcher wrote:

    What happened to freedom of speech? We're all entitled to our opinions, which is why I purchased my first Barilla product Friday, thin spaghetti! My new preference for pasta!

  • Report this Comment On October 06, 2013, at 2:10 PM, jirrgang wrote:

    Ok, people, when things went to the "LOVE EVERYBODY" phase, it did not mean love everything! I never used to buy Barilla but I sure am now! People have a right to express their beliefs. I'm sick of the liberal minority dictating to everyone else. Barilla FOREVER!!!!!!

  • Report this Comment On October 06, 2013, at 2:15 PM, timmy1234 wrote:

    I will not buy Barilla as people can not place labels on any particular group of people because the CEO gets up on the wrong side and decides to hate a group of people. I don't care if its Jews, gays, Russians or puppies or motherhood, Catholics or anyone else. A corporation must not be used as a personal sounding board for a CEO, any CEO. People in high places form public opinion and to single out anyone is simply wrong.

  • Report this Comment On October 06, 2013, at 2:58 PM, vet212 wrote:

    When what you do is against the REAL societal norm you better be ready to have opposition and to realize that many wont ever and for good reason accept your perversety

  • Report this Comment On October 06, 2013, at 8:17 PM, laukik wrote:

    I choose my suppliers very carefully and it does matter what they think of certain issues that are close to my heart.

    And although I am in the gay folks corner, in the case of Barilla I will not join the boycott. It's a ridiculous request.

    Freedom of speech goes both ways and Barilla didn't slam gays. He only said they don't represent the traditional family as he knows it and so won't use them in commercials..

    Live with it gay people. Not everyone and everybody loves you and is on your sides. Why would you even want them to?

    That is what diversity is all about.

  • Report this Comment On October 12, 2013, at 6:12 PM, matheuskramer wrote:

    Chick-fil-A is selling more than ever so Barilla should follow their example and double down.

    A boycott from 3% is nothing if front Conservative Christians that are 10 time bigger.

Add your comment.

DocumentId: 2669396, ~/Articles/ArticleHandler.aspx, 4/20/2014 8:01:24 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement