The Sideways Effect: Impacts of Pop Culture

Hi class,

You may remember Travis and I mentioned the movie, Sideways in our midterm presentation on Oregon Pinot Noir.  I promised to post some of the most interesting additional details, so here you go!

Not only do I find the impact this movie had fascinating, I also think it's really interesting to read an academic analysis on wine consumption and also, once you see the findings, to think about what this could mean for where players in the industry can/should be investing.

For those who don't know (spoiler alert), throughout the movie, one of the main characters is constantly praising Pinot Noir and condemning Merlot.  (The clip when he is finally asked "Why Are You So Into Pinot?" below:

After the movie came out, the wine industry was all talking about the "Sideways" effect: boost in Pinot Noir, decline in Merlot.  There were lots of numbers being tossed around, and also a fair share of naysayers, who argued that Pinot Noir's growth and Merlot's decline after the movie's release was coincidence.  Surely, wine drinkers (especially MERLOT drinkers) could not be so fickle in their tastes as to switch simply because of one single movie, albeit a cult classic.

In writing our midterm, we found this paper which took a more analytical report to proving of disproving the "Sideways" effect.

Methodology: (You all remember D&D from last year right?  So you know how you'd do this?)..  They use annual scanner data to estimate demand functions for each varietal before and after the movie's release, comparing the sales to a control group, and, finally controlling for differences in pricing, as well as promotions.

Here are the highlights:

Impact on volume:

• The movie did in general lead to an increase in overall wine consumption
• The ratio of Merlot-to-Pinot volume experienced a statistically significant change (ratio decreased, so varietals got closer) after the movie's release, in both promoted and non-promoted volume
• The ratio of Merlot-to-Control was stable before the movie and slightly decreased after.
• The ratio of Pinot-to-Control was stable, then saw a HUGE increase, check it out below

Impact on pricing/willingness-to-pay:

• Merlot price fell slightly, while Pinot price rose (both statistically significant) indicating that the movie had an impact on willingness-to-pay
• They also found consistent volume trends in each price range

Conclusions and Implications:

In all metrics, the "Sideways" effect was proven statistically significant, however the negative effects on Merlot were slight and much smaller than the very pronounced positive impact on Pinot Noir. In fact, many attribute the continued outpacing of Pinot's domestic growth vs. other varietals to the initial spike from the movie. 

So, Miles, why do you drink Pinot? Because I saw it in a movie? Because someone paid me to say this? Because I genuinely like it?  Who knows..

Now, if you were a wine manufacturer or even a group of them (like Oregon Pinots... you know, even Vino Volo), a question for you: Do you spend marketing money on literally opening new distribution channels or partnerships, advertisements during the Super Bowl or pursue placement in a blockbuster film like this one?  How much would it be worth for Tony Stark to take Pepper Pots to a Vino Volo during the next Marvel movie?

There are risks and arguments on each side, and honestly, I haven't looked into any of the cost side of product placement (yet -- stay tuned for our Final presentation).