TEACHING NOTE
The Boycott of Stoli Vodka
1
This case illustrates the following themes and concepts discussed in the chapters listed:
Theme/Concept Chapter
Stakeholder analysis 1
Business in a globalized world 4
Role of technology (social media) 11
Consumer boycotts 14
Diversity and inclusion 16
Corporate reputation, crisis management 19
Case Synopsis
This case describes the boycott of Stoli brand vodka initiated by Dan Savage, a prominent gay
rights blogger. Savage asserted that consumers should boycott Stoli vodka because the
Russian government, under the leadership of Vladimir Putin, had recently passed a series of
laws that discriminated against gay, lesbian, bi-sexual and transgender people. In fact, both
the owner and top executives at SPI Group, the parent company of Stoli Group USA, had had
progressively adversarial relationships with the Putin government for more than a decade, and
1
This teaching note was prepared by Anne T. Lawrence, based on a more extensive
TEACHING TIP: WHERE TO USE THE CASE IN THE COURSE
TEACHING TIP: VIDEOS
The authors of the case have prepared online materials to accompany the written case.
These materials consist of four segments: Facing a Crisis, Overview and History of SPI
and Stoli Group USA, Stoli’s Support of the LGBT Community, and Stoli
Responds. Instructors have the option of showing all four segments or any segment of
their choice. They are available here:
Discussion Questions and Answers
1) Describe the issue facing the managers of Stoli USA. Is this a corporate crisis, and
why or why not?
TEACHING TIP: LAUNCHING THE DISCUSSION
Instructors may wish to start the class by asking students: What was going on in Russia
that made LGBT activists so upset?
The key issues were that new laws had been passed in Russia which 1) made teaching
minors about homosexuality illegal; 2) banned the adoption of children by gay parents or
Chapter 19 definies a corporate crisis as “a significant business disruption that stimulates
extensive news media or social networking coverage. The resulting public scrutiny can
affect the organization’s normal operations and also can have a political, legal, financial,
and governmental impact on its business. A crisis is any event with the potential to
The boycott of Stoli vodka can be considered a corporate crisis, because it emerged
suddenly and unexpectedly and posed a signficiant financial and reputational threat to the
company. Data in the case show that gays comprised an important part of Stoli USA’s
customer base and were highly brand conscious, so reputational damage among members
of this community could have a serious, negative impact on sales and profits. The
boycott clearly demanded a crisis management response.
However, the boycott does not exactly fit the textbook’s definition. In this case, a
disruption did not stimulate extensive social networking coverage; rather, extensive
social networking coverage (generated by activists) stimulated a disruption (loss of sales
and damage to reputation). Moreover, the organizers of the boycott were in many
2) Identify the market and nonmarket stakeholders in the case. What were their
interests, sources of power, and likely coalitions?
Instructors may wish have fill in a to start the class by asking grid on the board, as
follows:
NONMARKET
STAKEHOLDERS
INTERESTS
SOURCES OF POWER
LGBT community
Human rights for LGBT
persons in Russia and
globally
Consumer (market) power
(boycott); social media
(informational) power
Social media influencers,
e.g., Dan Savage
Human rights for LGBT
persons in Russia and
globally; building their
own following on social
media
Number of followers on
social media
MARKET
STAKEHOLDERS
Distributors, importers,
retail shops, bars
Carrying products that
consumers want and will
pay for; high sales; good
relationships with brands
Power to distribute, sell,
and promote (or drop)
specific brands
Stoli employees in U.S.,
Latvia, and elsewhere
Jobs; reputation of
company to the extent that
it affects sales
Power to withhold labor
Management
Jobs; reputation of
company to the extent that
it affects sales and profits
Control of company
What were their likely coalitions? A coalition to boycott the brand may emerge among
3) Should Stoli vodka be considered a Russian brand? In an age of globalized supply
chains, what qualifies a brand’s national authenticity? Does it matter?
Stoli vodka’s national heritage was complex. As the case describes, Stoli vodka was first
made in Russia (then the Soviet Union) in the late 1930s. For many years, the brand was
owned by the Soviet government and union collectives. After the breakup of the Soviet
Union in the early 1990s, a Russian entrepreneur named Yuri Shefler acquired the company
To summarize, at the time of the boycott, Stoli vodka was produced in Latvia, using some
Russian ingredients, by a company based in Luxembourg with a distribution arm in the United
States. Stoli was no longer an authentic Russian brand, although it did have some historical
The case offers this quotation from the New York Times:
The exact nationality of Stolichnaya, like many global brands, is hard to
pin down. It was made for a time in Russia and simply bottled in Riga
(capital of Latvia) but has in recent years been filtered and blended in
The question, “does it matter?” invites opinion. The authors of the case have written:
4) In what ways did the nature of social media pose specific challenges to the company?
5) Evaluate the crisis management response so far of both the SPI group and Stoli USA.
What more should they do to restore the brand’s reputation?
Chapter 19 defines crisis management as “the process by which an organization deals
with a major event that threatens to harm the organization, its stakeholders, or the general
public. Every organization is likely at some time to face a crisis that forces management
and its employees to act quickly and without perfect information.”
The key individuals responsible for crisis management were Val Mendeleev (CEO of the
parent company, SPI Group), John Esposito (president of Stoli USA), and Lori Tieszen
(senior vice president and chief marketing officer of Stoli USA). The case describes the
initial response of these individuals as follows:
• Mendeleev published an open letter to the LGBT community. In it, he acknowledged
At the end of the case, Esposito seems to acknowledge that defending the brand had not
been fully effective, saying “Our initial response was to get the facts straight . . . but in
the end, this was the wrong response.”
Employee training: Stoli should train its employees on appropriate uses of corporate
media communication. Employees also need to be aware of the contingency plans that the
organization may put into play, so they can learn their role and responsibility.
Honoring Pride Month: Stoli could hold a panel discussion and a party as part of a “be
yourself at work” campaign. This will allow employees to feel comfortable in their
workplace settings.
Targeting the consumers (use of social media): Companies such as Oreo and Coca-
Cola have been using images of their products to show their support of gay pride. These
companies have adjusted the colors of their products and lined them up in the order of a
gay pride flag. Along with that they add a statement of support and a nice caption when
they share it on social media in order to attract the customers. Stoli could do this with
their vodka bottles, and line up their different flavors to express their support for love
equality.
Support pride events/campaigns: Stoli could also create a campaign where profits are
given to LGBTQ organization, such as the Lesbian & Gay Community Services Center,
Inc. With the purchase of each bottle, a percentage of the proceeds could be donated and
help promote pride events such as parades.
Epilogue
Following the events described in the case, the organization pivoted its messaging from “we
are not a Russian brand” to “we support LGBT rights.” Esposito explained:
We started to claim that we were not a Russian vodka, which was technically true, but
the people who were driving this cause were not worrying about technicalities… We
So, the company switched its focus to a different message—its opposition to Russian policy
and its support for LGBT rights. Esposito explained:
We went viral and we had a dual message. We abhorred the path Russia was going
The alphabetical letters in the message and on the Stoli website were changed to rainbow
colors, symbolizing the firm’s support of the LGBT community.
“defensive messaging” would not help the company maintain its business value, satisfy the
needs of consumers in the gay community, or protect its market share. They recommended
several short-term (1-2 weeks), mid-term (3-6 weeks) and long-term (2-24 months) strategies.
A second short-term strategy was to launch a dark site. (As Chapter 19 explains, dark
sites are used when companies need to provide stakeholders with specific and consistent
information from a reliable source in times of an emergency, crisis, or bad news.) Stoli’s dark
site included answers to frequently asked questions (FAQs) about the location of its
headquarters, where its beverages were produced, and what its contributions to the LGBT
community had been.
The mid-term approach focused on developing partnerships with advocacy groups and
Lastly, the long-term strategy was to demonstrate tangibly Stoli’s willingness to stand
strong on the issue of LGBT rights. For example, several months after the crisis, John
Esposito announced a $300,000 grant to support the LA Gay & Lesbian Center for a program
aimed at developing critical leadership skills among its members and allies, and a $150,000
donation to the Russian Freedom Fund.