Goya boycott after CEO’s praise of Trump resulted in higher sales: study

Dive Brief:

• Goya saw a jump in sales nationwide after calls on social media for a boycott of its products in response to CEO Robert Unanue’s praise of former President Donald Trump, according to research at Cornell University.
• Net sales jumped 22% in the two weeks after the controversy erupted in July 2020, according to an analysis of data from market research firm Numerator. This is despite the fact that Twitter posts pushing for a boycott were 75% higher than those urging consumers to buy more Goya products, the researchers estimated.
• Brand loyalty and the difficulties of finding an adequate substitute for Goya products hampered the punitive effects of the boycott, Cornell researchers concluded. As the 2022 midterm elections loom, the findings question the financial risk to CPGs of speaking out about candidates.

Dive Insight:

Unanue ignited a social media firestorm after praising Trump at a White House signing of an executive order launching a Hispanic Prosperity Initiative, for which Goya was donating food to U.S. food banks. His words at the event — “We’re all truly blessed … to have a leader like President Trump who is a builder” — sparked the hashtag #BoycottGoya, as critics called out the CEO for supporting a president who they felt harmed Latin Americans with his controversial immigration policies. New Jersey-based Goya Foods is one of the largest Hispanic-owned food businesses in the U.S.

While critics of Unanue may have had the numbers advantage on social media, his supporters — which embraced a #BuyGoya hashtag — appeared to have had the follow-through, based on the Cornell research. Sales of Goya products not only rose more than 56% in Republican-dominated counties — with most purchases made by first-time buyers of the brand — but they also temporarily increased in Democratic-dominated areas, where the brand has traditionally been more popular.

The Cornell researchers suggested that because a relatively small share of U.S. households overall are regular Goya customers, few of them could stop buying the products in numbers comparable to first-time purchasers.

Goya’s core Latino customers also continued to buy its products, researchers found. They hypothesized these consumers may have felt loyal to the brand or couldn’t find substitutions from competing brands like La Preferida or Badia, or private label.

The Numerator data showed sales of some Goya items did fall in Democratic counties — for example, canned beans — suggesting that shoppers could more easily find substitutions. But sales of Goya’s popular adobo seasoning, which has fewer competitors, held relatively steady even in the most Democratic areas, according to researchers.

That said, Goya’s sales bump was short-lived, reverting to pre-boycott levels about three weeks after the protests began, researchers found. But the company clearly felt confident in future growth, announcing an $80 million expansion project to double production capacity of a Texas plant just a few months after the boycott. More recently, Goya expanded a 300,000-square-foot distribution center in Illinois, just one of 26 facilities it has grown in the United States, Caribbean and Europe.

With the midterm elections looming — and voters weighing in on a host of controversial issues — the risk of boycott campaigns against any brand that crosses popular sentiment is real. However, the Cornell research questions whether companies would face a negative financial impact.

“Political consumerism campaigns on social media and their portrayal in the press are not always reflected in sales, and the risk of damage to their companies during a boycott may be overblown,” said Jura Liaukonyte, co-author of the research and Dake Family Associate Professor in Applied Economics and Management at Cornell, in a statement. However, she added that more research is needed to determine how factors such as a company’s size, market share and profile affect its overall exposure.