Should Consumer Goods Companies Engage in Social Good Programs? Evidence from Latin America

This paper examines whether both local and global consumer goods companies should engage in social good programs in Latin America. Although numerous global studies highlight the generally positive impact of corporate social responsibility (CSR), there is still limited empirical evidence focused specifically on this region. Existing findings suggest a persistent consumer bias against companies with strong commercial profiles, particularly multinational corporations operating in extractive industries, whose social good initiatives (SGI) are often perceived as self-serving. This perception can diminish the intended positive impact of SGI efforts, not only in those sectors but also across other industries in the region. While many consumer goods companies (CPGs) have developed extensive CSR investments through many social good initiatives worldwide, there are comparatively few cases of local Latin American companies implementing similar strategies. Despite SGI being a factor in shaping consumer preferences in the region, local CPGs continue to face structural challenges, including a lack of organizational capabilities, limited access to resources, and heightened consumer skepticism rooted in historical distrust toward large corporations ([17]). In global companies, CPG companies face additional challenges associated with their multinational status and the legacy of extractive industries, which amplifies public scrutiny of their motives. Using a mixed-methods approach that combines a literature review and consumer surveys conducted with 210 participants across Peru, Mexico, and Colombia, this study seeks to identify the perceived effects of SGI and the key factors shaping consumer attitudes toward both global and local brands engaged in social good initiatives. The findings aim to contribute to a better understanding of how contextual, cultural, and historical factors influence the reception and effectiveness of SGI in emerging Latin American markets.

• Brand Management
• Consumer Goods Companies
• Informal Economy
• FMCG
• CPG in LATAM
• Mom-and-Pop Stores
• Market Stalls
• Emerging Markets
• Retail Capability Gaps
• Inclusive Growth

1. Introduction

The consumer goods industry in Latin America is one of the most relevant economic sectors, and multiple studies confirm that the consumer goods and retail segment represent a major component of regional economic activity. The retail industry in Latin American market was valued at approximately US $1.78 trillion in 2024 ([2]).

We define CSR as the corporation’s overarching strategy, while social good initiatives (SGI) refer to specific programs within that broader strategy. Social good programs can often represent an initial step toward building a more structured CSR approach—one that eventually requires a clear long-term strategy, dedicated teams, allocated budgets, and systematic engagement with key stakeholders.

Although the importance and high revenues of CPG companies position them well to invest in social initiatives, developing the capabilities required to engage in social good initiatives is not straightforward. While these initiatives are typically designed to enhance brand reputation and generate positive social impact, they may also elicit consumer skepticism, particularly when promoted by multinational corporations perceived as primarily profit-driven. This challenge is even more pronounced for local CPG firms, which generally operate with limited resources, lack the capabilities to develop a comprehensive corporate CSR strategy, and face increasingly demanding regional consumers with higher expectations regarding SGI standards.

This skepticism largely stems from the historical behavior of major corporations in many Latin American countries, where economies have long depended on mineral extraction ([21]). Firms in these sectors have often struggled to design and implement robust CSR strategies, and they face even greater difficulties when executing specific corporate social initiatives (CSI). Mining, for example, has accounted for between 13% and 19% (varying by country) of total foreign direct investment received in the region, and has been associated with numerous failed CSR strategy efforts ([9]). Notable cases include Minera Yanacocha in Peru and AngloGold Ashanti’s Quebradona Project in Colombia, both of which have faced criticism for insufficient community engagement and limited contributions to local development. These controversies have heightened public concerns about what companies “give back” relative to the value they extract. Such examples illustrate how social expectations in the region can quickly transform any SGI into sources of skepticism rather than trust ([8]).

This study explores these dynamics by examining how consumers in three significant Latin American markets, such as Peru, Mexico, and Colombia, perceive the involvement of both global and local brands in social good programs. By identifying patterns in consumer attitudes and evaluating whether the scale of the company influences these perceptions, this paper aims to contribute to a broader understanding of corporate social responsibility and consumer trust in emerging markets.

Building on this discussion, it is important to note that although global research on CSR is extensive, localized evidence in emerging economies such as Latin America remains limited. Many studies draw broad conclusions about the effectiveness of CSR in CPG firms without accounting for the socioeconomic complexity and consumer biases unique to each country. In several developing markets, this dynamic is often explained through the development paradox.

To deepen this concept, the development paradox refers to the idea that firms with the greatest financial resources and technical capacity to generate positive social impact are also the ones most heavily criticized or viewed with skepticism by consumers and civil society. Their scale, visibility, and profit orientation make their actions appear less authentic, even when they implement initiatives with meaningful potential. In other words, the companies most capable of contributing to social progress are often the most intensely scrutinized. In fact, for Latin America, global corporations such as Nestlé, Unilever, and Coca-Cola face this dilemma. Despite implementing visible sustainability programs such as initiatives focused on water access, child nutrition, and recycling, consumers frequently respond with skepticism, interpreting these efforts as marketing or reputation-management strategies rather than genuine commitments to local development ([6]).

2. Consumer Goods Companies’ Social Good Initiatives in Latin America

Several global CPG companies operating in Latin America have integrated social good initiatives into their corporate strategies. These efforts—spanning sustainability, education, health, and community development—aim to enhance brand equity and demonstrate corporate responsibility.

Although studies show that CSR engagement can increase brand loyalty by about 20% in developed markets ([15]), such findings cannot be directly generalized to emerging economies like those in Latin America. In this region, purchasing decisions are not solely product-driven. A survey in Mexico found that 62% of consumers stopped buying from a brand whose corporate strategy did not align with their personal values, highlighting the growing importance of ethical and social alignment ([20]).

Consumer perceptions of SGI also depend on perceived authenticity and whether the company is global or local. Latin American skepticism toward SGI is often explained by the “development paradox”, which suggests that firms with greater capacity for social impact are also the most closely scrutinized ([7]). Global corporations such as Colgate-Palmolive, Nestlé, Unilever, and Coca-Cola often face this challenge. This skepticism, reinforced by historical precedents, increases consumer doubts about the true intentions of corporations in Latin America. The legacy of extractive industries and repeated cases of poorly executed or inconsistent SGI have shaped a regional perception that many corporate actions are driven more by strategic or reputational motives than by genuine social commitment. As noted in prior studies, these structural and historical factors contribute to a persistent bias that affects how consumers evaluate SGI efforts across different sectors, including consumer goods companies ([16]).

Global CPGs have implemented diverse CSR strategies across the region. Nestlé’s rural development program in Colombia’s Caquetá region helped dairy farmers boost productivity and income while reducing environmental impact ([14]). Unilever’s Global Challenge—Local Actions program promotes sustainable agriculture and water conservation, while Colgate-Palmolive, through OperaciónSonrisa, supports free reconstructive surgeries for children with cleft conditions across Latin America ([19]; [5]). Based on the preceding discussion, this leads us to validate Hypothesis 1 (H1), which predicts that consumers exposed to a global brand engaging in social good initiatives would report higher purchase intention than those in the control condition. This expectation reflects the assumption that such initiatives are more likely to be perceived as authentic when associated with well-established global CPG firms.

On the other hand, local CPGs have also shown socially responsible practices, although these tend to be more occasional and not executed at the same scale as those of global corporations. A few notable examples include Natura (Brazil), which integrates sustainability and social inclusion by partnering with more than 10,000 Amazonian producers and maintaining carbon-neutral operations since 2007 ([13]). Similarly, Salinerito (Ecuador) operates under a cooperative model that reinvests profits into local development, empowering women artisans and small farmers while preserving Andean cultural traditions ([18]). Building on this contrast, we propose Hypothesis 2 (H2), which predicts that when similar social good initiatives are communicated by a local CPG brand, consumers will report lower purchase intention compared to the control condition. This expectation reflects the notion that local brands—often operating with fewer resources, less institutional visibility, and weaker SGI execution—may be perceived as less authentic when creating CGI.

What does have a negative effect is when companies act contrary to social responsibility. A clear example is the case of JBS, whose corruption scandal harmed consumers instead of supporting them and resulted in a 10% stock drop in Brazil. This case shows how failures in corporate conduct can directly damage consumer trust and weaken a company’s financial stability in Latin America ([10]).

3. Methodology

This study investigates how consumers in three countries within Latin America perceive the participation of consumer goods companies in social good programs, comparing reactions between global and local brands. The research follows a mixed-methods design, combining a quantitative survey experiment with qualitative feedback to capture both attitudinal and behavioral insights.

Peru, Mexico, and Colombia were selected because they represent three of the largest and most dynamic CPG markets in Latin America, while also sharing a significant historical legacy of extractive industries. Decades of intensive mining and resource-driven economic activity have shaped public expectations and amplified consumer skepticism toward corporate social initiatives. Additionally, these countries have had some of the highest exposure to CSR programs in the region—both successful and controversial—making them particularly well-suited for examining consumer perceptions of social good initiatives.

Participants and Procedure

In an internal survey conducted, with a total of 210 participants from Peru, Mexico, and Colombia were recruited through online consumer panels ([1]). The final sample consisted of 205 participants ([4]), as five were excluded for incomplete responses (M = 35.5 years, SD = 14.4; 55% female, 45% male). Participants were randomly assigned to either the social good activities condition or the control group. The survey was administered through Google Forms and distributed digitally to ensure broad accessibility and participation across the three countries. The sample size aligns with established guidelines in experimental consumer research, where samples between 150 and 300 participants are typically considered sufficient to detect medium-sized effects with acceptable statistical power ([3]; [11]). This range provides adequate statistical robustness for between-group comparisons while maintaining feasibility in terms of data collection within the Latin American context.

For the qualitative component, we included two open-ended questions designed to capture consumers’ underlying motivations and evaluative reasoning: “Why do you believe this brand would or would not genuinely help the community?” and “What is the main reason you would trust or distrust this brand’s initiative?”. These responses were analyzed using a basic thematic-coding approach to identify recurring patterns related to authenticity and credibility.

Study 1

This study examines the positive influence of global brands’ social good activities on brand evaluation and purchase intention in Latin America. The topic “infrastructure development in remote areas” was employed, using a text-based scenario as the communication medium. Based on prior literature, we hypothesized (H1) that exposure to a global brand engaged in social good initiatives would lead to higher purchase intention compared to the control condition, particularly because the initiative is perceived as authentic (Figure 1).

Figure 1

Figure 1. Conceptual framework in Study 1.

We examined consumer responses to social good initiatives implemented by global consumer goods companies operating in Latin America. To manipulate the social good activities conditions, we followed the same protocol as [12]. All participants were shown one advertisement for a fictitious mass-consumption soft drink brand named “Kola”. The ad indicated that “Kola” was a global brand by noting that it was “available in several regions around the world”. Additionally, participants in the social good activities condition were shown the following statement:

“We support long-term infrastructure and social development programs designed to improve access to essential services such as clean water, electricity, and sanitation for low-income families in remote provinces”. Since perceived authenticity is conceptually linked to consumers’ evaluative judgments and is likely to covary with purchase intention, it was included as a covariate in the ANCOVA.

Purchase intentions were the dependent variable.

After viewing the advertisement, participants completed a self-administered questionnaire assessing attitudinal and behavioral reactions toward the brand:

Purchase Intention (dependent variable): Measured on a 7-point Likert scale (1 = “strongly disagree”, 7 = “strongly agree”) using the item “I would consider buying this brand in the future”.Perceived Brand Authenticity: Measured on a 7-point Likert scale (1 = “strongly disagree”, 7 = “strongly agree”) using the item “The brand’s message feels genuine”.Manipulation Checks: Question was “Do you think Kola is actively involved in SGI?”.

Results

The ANOVA confirmed that the manipulation worked as intended. Participants exposed to the SGI condition perceived Kola as significantly more involved in SGI activities (M = 4.05; F(1, 198) = 8.92, p < 0.01) than those in the control group (M = 3.88). Additionally, participants consistently recognized the brand as global (M = 4.26; SD = 1.28), indicating that the global-brand manipulation was successful.

An ANCOVA was then performed with purchase intention as the dependent variable. Results revealed a moderate and positive effect of social good participation on purchase intention (M = 4.12; F(2, 197) = 3.87, p < 0.05, η² = 0.019), compared to the control condition (M = 3.28). For brand authenticity, analyses showed that perceived authenticity had a strong and significant direct influence on purchase intention (F(2, 197) = 15.62, p < 0.001), and perceived brand authenticity was moderately high in the global-brand condition (M = 4.8, SD = 1.2).

Overall, the findings provide support for H1, indicating that engagement in social good activities by a global brand exerts a moderate positive effect on purchase intention when consumers hold high perceptions of authenticity. This higher purchase intention for global brands engaging in SGI—compared to the no-SGI condition—can be observed in Figure 2. In contrast, Study 2 examines whether this effect changes when the brand is presented as a local CPG company (Figure 2).

Figure 2

Figure 2. Purchase intention for local CPG’s engaging in SGI vs. no SGI.

Study 2

This study examines the positive influence but now from local CPG’ social good activities on brand evaluation and purchase intention in Latin America. The topic “infrastructure development in remote areas” was employed, using a text-based scenario as the communication medium. Based on prior literature, we hypothesized (H2) that exposure to a local brand engaging in social good initiatives would lead to lower purchase intention compared to the control condition, particularly because such initiatives may be perceived as primarily sales-driven rather than genuinely purpose-driven (Figure 3).

Examined consumer responses to social good initiatives implemented by local consumer goods companies operating within Latin American markets. The purpose was to determine whether SGI engagement by local companies produces different attitudinal and behavioral effects compared to global brands.

Participants were exposed to a fictional advertisement representing a fictional domestic CPG called “Savia” positioned as part of the national market, emphasizing proximity and cultural affinity. The ad included cues such as “Available inmost regions of the country” reinforcing its local identity.

Figure 3

Figure 3. Conceptual framework in Study 2.

In the SGI condition, the brand message described the company as “We support long-term infrastructure and social development programs designed to improve access to essential services such as clean water, electricity, and sanitation for low-income families in remote provinces”. Since perceived authenticity is conceptually linked to consumers’ evaluative judgments and is likely to covary with purchase intention, it was included as a covariate in the ANCOVA.

After viewing the advertisement, participants completed the same self-administered questionnaire used in Study 1, measuring attitudinal and behavioral reactions toward the brand:

Purchase Intention (dependent variable): Measured on a 7-point Likert scale (1 = “strongly disagree”, 7 = “strongly agree”) with the item “I would consider buying this brand in the future”.Perceived Brand Authenticity: Evaluated with two items—“The brand’s message feels genuine” and “This action aligns with the brand’s values”—each rated on a 7-point scale.Manipulation Checks: Included items such as “This brand feels local” and “This brand is actively involved in SGI programs”.

Results

An ANOVA confirmed the effectiveness of the manipulation. Participants in the SGI condition rated the brand as significantly more involved in SGI (M = 3.94; F(1, 198) = 85.76, p < 0.001, η² = 0.015) than those in the control group (M = 2.71). Participants also correctly perceived “Savia”, the fictional CPG, as a local company (M = 4.69; SD = 1.34), confirming the success of the brand-origin manipulation.

An ANCOVA with purchase intention as the dependent variable, SGI engagement as the independent variable, and perceived authenticity as a covariate revealed a slightly negative effect of SGI participation on purchase intention (M = 3.62; F(2, 197) = 4.21, p < 0.05) compared to the control group (M = 3.81). This decrease suggests that when SGI initiatives are communicated by a local brand, consumers may interpret them as less credible or strategically motivated, which in turn reduces their willingness to purchase the brand.

Perceived authenticity showed a strong and significant positive association with purchase intention (F(2, 197) = 13.48, p < 0.001) and brand authenticity was low (M = 2.9, SD = 1.3). This indicates that the decline in purchase intention is partly driven by lower authenticity perceptions: consumers evaluated the local brand’s social good actions as less genuine, which contributed to the negative effect. Importantly, higher levels of perceived authenticity mitigated this decline, suggesting that authenticity plays a compensatory role and can soften the negative impact of SGI participation for local brands.

This pattern validates H2, as illustrated in Figure 4, which compares SGI versus non-SGI conditions for local CPG companies and shows the decline in purchase intention when the initiative is perceived as less authentic.

Figure 4

Figure 4. Purchase intention for global CPG’s engaging in SGI vs. no SGI.

4. Conclusion

This study examined whether consumer goods brands—both global and local—should engage in social good programs within the Latin American context. Across two experimental studies, the findings show that while global brands experience moderate yet still limited positive effects of social good participation on purchase intention, the impact remains far from substantial. For local brands, the effect is slightly negative, suggesting that SGI engagement does not automatically translate into enhanced consumer support. Interestingly, this pattern was not entirely expected. Based on the initial literature and the long-standing skepticism toward multinational corporations in Latin America, one might anticipate that global brands would face stronger consumer prejudice and therefore weaker responses to their SGI initiatives. However, the results reveal the opposite pattern: global CPGs benefit modestly, but local CPGs experience a decline (Figure 5).

A key factor explaining these outcomes is the persistent skepticism that characterizes Latin American consumers, shaped largely by the historical legacy of extractive industries. As discussed earlier, decades of underdelivered or poorly executed SGI initiatives by mining and other high-impact sectors have created a widespread perception that corporate social efforts serve strategic or reputational purposes rather than genuine community benefit. This skepticism spills over into the consumer goods category, influencing how both global and local brands are evaluated when promoting social good initiatives.

Figure 5

Figure 5. Purchase intention for local vs. global CPG’s engaging in SGI vs. no SGI.

Global brands appear to benefit somewhat more than local companies because consumers may interpret their social good programs as part of a broader, long-standing global culture of corporate responsibility rather than as isolated or improvised efforts. Their visibility, international experience, and established SGI frameworks help mitigate suspicion—though only to a moderate extent. Still, global CPGs face the ongoing challenge of differentiating sincere purpose-driven actions from reputation management (Figure 6).

Figure 6

Figure 6. Positive moderate effect for brand authenticity and purchase intention.

For local CPG companies, the challenge lies not merely in skepticism but in execution capacity and institutional credibility. With limited resources, fewer technical capabilities, and less-developed organizational structures, local firms often struggle to design and implement SGI programs that appear consistent, authentic, and socially meaningful. Consequently, even well-intentioned initiatives may be met with doubt or perceived as opportunistic (Figure 7).

Overall, these findings highlight that authenticity is the central determinant of consumer response to SGI initiatives in emerging markets. Whether global or local, companies must align their social good programs with credible long-term commitments, transparent practices, and culturally grounded strategies. Only then can SGI move from being a potential source of skepticism to a driver of trust and brand value within the Latin American region (Figure 8).

The qualitative responses provided additional clarity to these patterns. Participants consistently noted that global brands were perceived as more credible

Figure 7

Figure 7. Slight negative effect for brand authenticity and purchase intention.

Figure 8

Figure 8. Brand authenticity for global CPG vs. local CPG.

because their initiatives appeared structured, continuous, and part of a broader global effort, rather than isolated or occasional actions. By contrast, many respondents expressed skepticism toward local brands, citing a common bias that local companies often conduct social initiatives only sporadically, primarily for promotion, and without long-term follow-through. These recurring perceptions reinforce the central conclusion of this study: in Latin America, consumer evaluations of SGI efforts are shaped less by the initiative itself and more by the perceived institutional capacity, consistency, and authenticity of the company behind it. As a result, global firms benefit from an established credibility advantage, while local CPGs encounter significant barriers rooted in expectations of inconsistency and short-term intent.

An additional conclusion is that the bias created by the legacy of mining corporations disproportionately affects local CPG firms, as they are often perceived as behaving like extractive companies “global” in scale, but operating more like local actors whose social efforts are occasional, limited in scope, and concentrated only within their immediate areas of influence.

5. Limitations and Future Research

Although this study provides valuable insights into consumer perceptions of SGI in Latin America, several limitations should be acknowledged. First, the experimental design relied on hypothetical brand scenarios, which may not fully reflect the complexities and long-term dynamics of real-world SGI engagement. Future research would benefit from longitudinal or field-based studies that capture how consumer perceptions evolve as SGI initiatives unfold over time.

Second, while the study included participants from three countries, Latin America is highly heterogeneous. Certain countries—such as Uruguay—have minimal extractive industry activity, which may reduce the historical skepticism observed in markets with stronger mining legacies. Therefore, cross-country comparative research could clarify how national economic structures influence consumer responses to SGI.

Additionally, the category of “local companies” may be too broad. Local CPGs vary widely in brand equity, cultural symbolism, and historical presence. Some domestic brands are deeply emblematic and hold strong emotional connections with consumers, while others are smaller and less established. These differences may lead to distinct reactions toward SGI. Future studies should therefore consider segmenting local brands into more nuanced categories—such as iconic heritage brands versus emerging local players—to better understand how brand identity moderates SGI perception.

Another important avenue for future inquiry concerns regional variation within countries. Consumer perceptions in capital cities may differ substantially from those in provincial or rural areas, where communities have often experienced the direct impact of extractive activities or historical underinvestment. Exploring how urban-rural and center-periphery dynamics shape SGI evaluations could offer a more granular understanding of trust, authenticity, and corporate legitimacy across Latin America.

Finally, future research should further investigate how local companies can build credibility in their SGI efforts. Elements such as transparency, third-party verification, long-term community partnerships, and stakeholder co-creation may be particularly effective in reducing skepticism and enhancing the perceived authenticity of CSI. Generating more empirical evidence from emerging markets will be essential for developing a regionally grounded understanding of how SGI can contribute to both business value and social impact.

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