Do corporate boycotts work?
In the late 1980s, a San Francisco-based environmental group called for a boycott of Starkist tuna. Their pique: Too many dolphins were being killed in tuna drift nets. What started out as a small protest grew into one of the country's most successful boycotts in history. Within three years, all top tuna companies had stamped "dolphin safe" on cans as fishermen winched in their drift nets.
Now another high-profile boycott is brewing - this time against Texaco Inc. The Rev. Jesse Jackson and other civil-rights activists are asking consumers to buy their gas elsewhere to force the company to settle a race-discrimination lawsuit and alter its practices toward minorities. Picketing is scheduled to begin tomorrow.
While the Texaco protest is receiving a lot of attention, it is far from the only one going on. In recent years, the number of boycotts being waged against corporate America has been rising. By some estimates, as many as 300 are currently in effect.
Though not all are successful, many do have at least some marginal impact, which is one reason for the boycott binge.
"Boycotts are very effective," says Alisa Gravitz, executive director of Co-op America, a consumer group that tracks boycotts. "Sometimes just the threat to call a boycott can be effective."
Once largely the territory of labor unions, today civil-rights activists, consumer groups, religious organizations, and women's advocates can be found leading the charge. The causes have broadened, too, from race discrimination to child-labor practices.
The aim of most boycotts is to force companies to withdraw faulty products or change discriminatory or dangerous environmental practices. Even if they don't end up having much impact on a company's bottom line, they can hurt worker morale, make it difficult to recruit employees, and damage a company's image.
Plenty of consumers, for example, kept bypassing Exxon gas stations long after the 1989 Valdez oil spill case was resolved. Others still report misgivings about buying Nestl products years after it resolved complaints about marketing of baby formula to third-world countries.
The most successful boycotts, watchers agree, rally around an issue consumers can identify with, clearly articulate the cause, have support from big-name leaders, and have money.
"It's the same things that make a good election campaign," says Ms. Gravitz.
In the case of the tuna boycott, Earth Island Institute organized a letter-writing campaign to Congress and corporate heads to get Starkist to stop using drift nets and gill nets, which can kill dolphins. The institute bought front-page ads in major newspapers. It also screened a gory film for its cause. The reported total bill to fight H. J. Heinz Company, Starkist's parent: $1.5 million.
More organizations are also waging boycotts in an effort to win new legislation. These groups recognize that "boycotts change law," says Zachary Lyons, editor of Seattle-based Boycott Quarterly. During every congressional election since 1990, he says he has seen a spike in the number of boycotts.
Getting consumers to rally around an issue can be difficult. "They're a tough nut to crack," contends Monroe Friedman, a psychology professor at Eastern Michigan University in Ypsilanti. He says that's why groups are relying on the media, rather than consumers, by focusing on "embarrassing the company."
While most boycott organizers usually face an uphill battle to bring consumers on board, the Texaco boycott may have a head start. For one, the issue of discrimination resonates with minorities; second it's easy to buy gas elsewhere.
Already operators of some Texaco gas stations see sales eroding. One already-picketed Boston gas station reports a double-digit sales drop.
"African-Americans will be very supportive of the boycott," says Ken Smikle, president of Target Market News Inc., a Chicago company that analyzes the black consumer market. Black consumers represent a $324 billion consumer market, he estimates, and in 1995, African-Americans spent $8.6 billion on gasoline and motor oil. It's a group that has flexed its consumer muscle in the past against restaurant chains Shoney's and Denny's, which have settled major race-discrimination suits.
Another question, however, is whether nonblack consumers will feel impelled to boycott. Notes Mona Doyle of Consumer Research Network Inc. in Philadelphia, "the American public tends to be very positively impressed by the forthrightness and openness of a CEO."