MARKETING US WINE – Movie Magic

The film Sideways has provided free “advertising” for the poor relations of the US drinks industry. Even the much maligned Merlot has benefited, says Jon Rees

Rupert Murdoch has been accused of many things in his career but now is the first time he has been blamed for undermining an entire grape variety. The world’s most powerful media tycoon controls the film studio Twentieth Century Fox which recently had an unexpected hit with Sideways, a buddy movie about two wine lovers. Well, one wine lover, Miles, who tends to go into raptures over the “notes” in his glass of Pinot Noir, and his friend Jack, who just says “I like it” as he downs another mouthful. The pair travel through the vineyards of the central Californian coastline.

The accusation against Murdoch has arisen because, as the two men head towards a restaurant to meet two women for dinner, a reluctant, angst-ridden Miles says to Jack, “If anyone orders Merlot I’m leaving. I am not drinking any ******* Merlot.”

The effect of this throwaway line was dramatic. Sales of Merlot stalled, with 2% fewer households buying Merlot in the three months after the film’s release. Sales of Pinot Noir, meanwhile, rose by 15%.

Now the film is out on DVD and vineyards and wine sellers say it is affecting sales like nothing seen since the television documentary nearly 15 years ago which explored the notion that drinking red wine is good for your health.

Though the wine industry, and just about everyone else, including the film’s director Alexander Payne, was taken by surprise by the effects of that throwaway line about Merlot, it has been swift to take advantage of the situation.

With the launch of the DVD various vineyards and retailers have set up marketing tie-ins. For instance, wine.com is selling sets of wine from the region where the film is set and Twentieth Century Fox has teamed up with various vineyards to launch sidewayswineclub.com to sell wines from the featured region. Winery Robert Mondavi is running in-store promotions in conjunction with the studio.

The film is a welcome boost to wine sales (even sales of Merlot have recovered) since it provides the industry with the best kind of publicity – the word-of-mouth kind.

Not that the US wine market was on its uppers. Quite the reverse in fact since it has now experienced 11 straight years of increased consumption. However, the unusual thing about Sideways is that it acted almost like a national advertisement for wine, and that is something which the US wine market has rarely gone in for.

Indeed, the wine industry in America is the poor cousin compared with its beer and spirits rivals in terms of advertising expenditure. Total advertising expenditure on wine last year amounted to just $108 million. In contrast, the beer industry spent more than $1 billion on advertising last year, 10 times wine’s spend, even though the industry is only four times as big. The spirits industry showed a similar difference in approach, since it spent four times as much as wine on marketing, though it is only twice as big.

The key reason is probably that even the biggest wineries are a fraction of the size of the massive brewers like Anheuser-Busch and SAB Miller so they do not have the marketing budgets which can match their clout.

US domestic winemakers sold about $23bn of wine last year (beer sales topped $80bn), but it is a very fragmented business with about 4,500 wineries in the country; the top third account for about 90% of sales.

However, there appears to have been an advantage in not having enough money to spend on national advertising for wine since the industry has, instead, focused on making seemingly small but significant changes.

Indeed, it has to some extent borrowed from the success of the so-called New World wines in the UK and concentrated on making wine accessible to consumers who were previously put off by the snobbery and pseudo-mystique which surrounded the product.

So, over the past few years American winemakers have introduced attractive labels, different sized bottles and names, often puns on grape varieties like Little Penguin, which appeal to the average buyer, rather than grandiose labels which the discerning few can enjoy showing to their friends. The introduction of the screwcap bottle has also provided a significant boost to sales. The overall aim was to demystify wine, sell something under a name which consumers could pronounce and make it easier to open. The end result was that more people drank more wine every year.

The industry has also been fortunate in a way which it could hardly have foreseen. In the 1990s there was massive overplanting of vines, which has led now to a glut in production.

So there is an enormous amount of good quality wine on the market, which is good for consumers since it is being sold for very reasonable prices: good wines retail for around $6.99 but there are plenty of wines which are drinkable for $2 or even less.

As a result, US wine consumption has grown by over 60% in the past 14 years and many of these regular drinkers are in their 20s, so they are likely to remain consumers for many years to come.

Merlot suppliers do not seem too bothered by the criticism in Sideways, either. It is by far the biggest selling variety of red wine in the US and, after that initial hit, sales appear to be back on course. After all, there is a degree of truth in the old line about there being no such thing as bad publicity – many wine critics went out of their way to defend the grape against the wrath of Miles in Sideways and the extra column inches perhaps had an effect in restoring the sales momentum.

The boost which Sideways gave to the wine industry was unexpected and perhaps almost impossible to replicate deliberately. However, it was a national promotional campaign of a kind and maybe now winemakers will turn to Rupert Murdoch again, not to complain this time but to spend some money across one of his media outlets and build on the success his studio provided for them.

© db May 2005