Should Investors Be Worried About The 2023 Boycotts?
by Mary Scott
The Power of Boycotts: A History
Boycotts have long been used as a strategy to pressure companies to change unethical or harmful business practices. One prominent example is the Coalition of Immokalee Workers (CIW) four-year boycott of Taco Bell , culminating in 2005. The CIW, representing tomato pickers in Florida, launched a boycott to push Taco Bell's parent company 百胜集团 to improve wages and working conditions.
As described in an article by labor activist Elly Leary, the CIW's "Boycott Campaign" employed a "boomerang effect" strategy. By leveraging student groups, faith-based organizations, labor unions, and other allies to apply public pressure, they aimed to force concession from the fast-food giant. After four years, YUM Brands finally agreed to the workers' demands, marking it as "the most significant victory since the successful grape boycott led by the UFW Foundation in the 1960s."
Yet contrary to assumptions, analysis of YUM Brands' 10-Ks from 2002-2005 during the boycott period showed no notable financial impact. Revenue continued growing steadily throughout. This suggests boycotts tend to succeed through publicity and public image pressure rather than direct consumer action. Facing mounting scrutiny, companies may concede demands to end damaging media campaigns, even absent financial incentives.
In the Taco Bell case, parent company YUM Brands likely predicted that agreeing to the tomato pickers’ terms presented less risk than allowing the boycott generating negative headlines to persist. By giving in, leadership cooled criticism and protected the brand's reputation. This demonstrates how consumer boycotts, though not reducing revenue themselves, can wield power through attention and perceived threat. Their potency relies predominantly on PR factors rather than consumer behavior shifts. Understanding this empowers activists in strategizing effective campaigns for corporate accountability and policy reform.
The recent attacks on American franchises like 麦当劳 and 星巴克 echo the earlier Taco Bell boycott campaign led by the Coalition of Immokalee Workers. As we saw then, these boycotts aim to pressure corporations through negative publicity rather than financial impact.
Today, Taco Bell’s parent company YUM Brands once again finds itself in the crosshairs for its Israel affiliation. This time, with Pizza Hut . It’s worth noting that YUM Brands’ KFC is also being boycotted, but due to outrage over their posts related to Kashmir Solidarity Day rather than a relation to the conflict in Gaza. Just as the CIW succeeded by generating controversial headlines, today’s Middle East activists utilize social media outrage to force brand concessions.
They have an engaged audience in Gen Z. Documented on platforms like TikTok , young people are enthusiastically supporting BDS calls for targeted company boycotts. From pressuring Starbucks over union-busting to viral worker testimonies of sales declines, awareness, and conversation drive impact more than consumer behavior shifts.
While these campaigns may not financially harm mega-corporations like YUM Brands, McDonald’s, or Starbucks itself, they still succeed in their goals of solidarity messaging and keeping Palestine injustice in the mainstream. They inspire continued resistance by leveraging perceived threat and voice.
However, just because it’s not typical for companies to be impacted financially, doesn’t mean it’s impossible. The recent anti-LGBTQ+ boycotts of Bud Light and 塔吉特百货 provide stark examples of campaigns that directly damaged sales and operations, contrasting with the prevailing wisdom that boycotts rarely financially harm corporations.
The Bud Light boycott over its partnership with a transgender influencer was uniquely damaging, fueled by nonstop media coverage that bolstered the anti-LGBTQ+ campaign. This led to double-digit sales declines, the loss of Bud Light's top-selling beer status, and stock hits for parent company Anheuser-Busch.
Similarly, Target removed some Pride-themed merchandise after threats to retail workers over its LGBTQ+ positioning. While the financial fallout was less severe, both cases demonstrate a departure from past boycott successes relying purely on publicity pressure absent revenue impact. They show how in today's hyperpolarized climate, vocal ire can amplify online to directly threaten corporate performance.
However, some leaders like 华特迪士尼公司 have stubbornly withstood the loss of favorability for upholding LGBTQ+ support, preventing reactionary calls for boycotts from fully unraveling years of mainstreaming inclusion efforts. Still, the rare instances where campaigns directly damage sales merit examination as an emerging boycott trend that defies conventional wisdom.
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A Quick Summary: Israel vs Palestine
The recent conflict between Israel and Palestine, as detailed by BBC , began when the Palestinian militant group Hamas initiated a significant assault on Israel. This attack resulted in approximately 1,200 casualties. In response, the Israeli military conducted air and artillery strikes in Gaza, leading to over 14,000 Palestinian deaths.
The historical context provided traces the conflict back to the establishment of Israel in 1948, stemming from tensions between the Jewish minority and Arab majority in the region. It highlights key moments such as the 1967 war when Israel occupied East Jerusalem and the West Bank. These events have contributed to the ongoing struggle and animosity between the two sides.
The recent escalation was attributed to tensions between Israel and Gaza, with Hamas possibly seeking to increase its popularity among Palestinians. The group might have used hostages as leverage to pressure Israel.
The international response varies, with the U.S. and the European Union condemning Hamas' actions. Meanwhile, Russia and China have refrained from condemning Hamas and maintaining contact with both sides in the conflict. Iran, a key supporter of Hamas, denies involvement in the recent attack despite questions raised about its role.
Overall, the conflict remains deeply rooted in historical disputes, territorial claims, and differing aspirations, contributing to the ongoing hostilities between Israel and Palestine.
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What Does This Mean?
According to Aisha Ijaz, the ongoing Gaza boycotts targeting American brands like McDonald's and Starbucks are unlikely to heavily impact the U.S. economy. Past cases involving Denmark and Russia suggest that while such boycotts raise awareness, they don't significantly affect a nation's economy without coordinated sanctions. Without broader international action against Israel, these boycotts may primarily serve to create awareness rather than cause substantial economic change in America. Moreover, many Western brands have been cautious about taking stances on humanitarian crises like Gaza, fearing backlash or appearing inauthentic. Therefore, while the boycotts draw attention to the Palestinian situation, their direct economic impact on America might be minimal.
In essence, while the recent Free-Palestine boycotts targeting American brands like McDonald's and Starbucks may not wield direct economic impact on the U.S. economy, their significance lies in their capacity to elevate awareness and sustain a crucial dialogue around the Palestinian situation. These boycotts, reminiscent of historical strategies, primarily serve to spotlight humanitarian concerns rather than enact immediate financial changes. However, they stand as a powerful testament to the enduring strength of collective voice and activism in advocating for global causes, underscoring the need for broader international action and solidarity to address deeply rooted conflicts like the Israel-Palestine issue.
Acknowledgements:
Thank you to Adrian Cheung for his valuable input, adding depth to this article.
Thank you to Tim Scott, CPA for being my dad and listening to me vent as I researched this topic (particularly the 10-K aspect).
Direct Links (Work Cited further down):
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10-Ks:
Sites:
Work Cited:
Form 10-K 2005. Yum! Brands Inc., 2005
Form 10-K 2004. Yum! Brands Inc., 2004
Form 10-K 2003. Yum! Brands Inc., 2003
Form 10-K 2002. Yum! Brands Inc., 2002
Schedule 14A Information. Yum! Brands Inc., 2005
BDS. “Get Involved - Know What to Boycott.” BDS, 23 Nov. 2023, bdsmovement.net/get-involved/what-to-boycott.
(BNC), Palestinian BDS National Committee. “Act Now against These Companies Profiting from the Genocide of the Palestinian People.” BDS Movement, 16 Nov. 2023, bdsmovement.net/Act-Now-Against-These-Companies-Profiting-From-Genocide.
Chief Executive Leadership Institute. “List of Companies That Have Condemned Hamas’ Terrorist Attack on Israel.” Yale School of Management, Yale School of Management, 17 Nov. 2023, som.yale.edu/story/2023/list-companies-have-condemned-hamas-terrorist-attack-israel.
CIW. “Boycott the Bell.” CIW, 2001, www.ciw-online.org/tz_site-revision/breaking_news/boycott_in_brief.html.
Kherallah, Aisha. “Gen-Z’s Views on Israel #boycott? Head to TikTok to Find Out.” The New Arab, The New Arab, 3 Nov. 2023, www.newarab.com/features/gen-zs-views-israel-boycott-head-tiktok-find-out.
Ijaz, Aisha. “Israel: Why the Brand Boycotts Won’t Make Much Difference: EHU.” Edge Hill University, 23 Nov. 2023, www.edgehill.ac.uk/israel-brand-boycotts/#:~:text=There%20were%20also%20attacks%20on,%2C%20Pepsi%2C%20Wix%20and%20Puma.
“Israel Gaza War: History of the Conflict Explained.” BBC News, BBC, 15 Nov. 2023, www.bbc.com/news/newsbeat-44124396.
Radwan, Rawan. “Why McDonald’s, Starbucks and Other American Brands Continue to Pay the Price of Politics in the Middle East.” Arab News, 27 Oct. 2023, www.arabnews.com/node/2398351/middle-east.
Staff, Buzz. “‘boycott KFC’ Trends as Indians Outrage over Support from Mncs on Kashmir Solidarity Day.” News18, News18, 8 Feb. 2022, www.news18.com/news/buzz/boycott-kfc-dominos-pizza-hut-kashmir-twitter-outrage-4749206.html.
Sykes, Stefan. “Boycotts Rarely Work - but Anti-LGBTQ+ Backlash Is Forcing Companies into Tough Choices.” CNBC, CNBC, 22 June 2023, www.cnbc.com/2023/06/22/the-business-of-boycotts-what-can-corporate-america-do.html.
Problem Solver, Collaborator, Excellent Customer Experience
1 年Ah, good ole money ruling the world. When it comes to making a large impact, it makes sense that social media and doing it as an advertising approach would be more successful than the actual economic impact the movement makes. Thank you for this analysis. Only suggestion is having some inclusivity in that image. Personally, I am inspired by the recent boycotting movement. I started my share on research and boy! Is it a rabbit hole! When I first heard the idea of boycotting major brands as an adolescent, I figured it wasn’t applicable to me because financially speaking, I was not in a position to have choices. Now, as an established adult, I choose to be more aware of where my spending goes. Shop small, local, and whenever possible, eco friendly options. Not so much to “stick it to the man”, but to live life consciously. Perhaps if we all did our share of living consciously, boycotting wouldn’t be such a wild idea. We must always lead by example. Honestly, just focusing on one’s health and making better dietary choices is the most natural way to boycott without even realizing it.
Aspiring Government Relations Consultant | Political Science and Criminology, Law & Justice @ UIC | Minor in Chinese | Not Endorsed by the DoD
1 年Your first and probably greatest article! It gives an insightful view on the financial impacts or in this case ineffective impacts, of boycotts on companies! Great work!