Members in the ever-evolving alcohol industry are leveraging data and artificial intelligence (AI) to drive innovation, enhance customer experiences, and optimize operations, all in an effort to increase efficiency and profitability in the market. There are several ways AI is being used to transform this industry:

• Marketing and Insights

Data is highly valuable and can provide a better understanding of consumer behavior, allowing companies to design their consumer approach in a more targeted manner. Purchase and demographic data allow companies to clearly identify trends and performance to improve their products and the way they communicate with consumers. This information is sometimes shared between suppliers and wholesalers to identify the best market opportunities for particular products. AI can also help track customer orders and provide recommendations for future ordering processes.

This same information can be used in an analysis to highlight emerging customer preferences, providing data-based feedback to companies to help them plan their production schedules, purchases, marketing plans, and innovation projects.

• Customer Interaction

Industry members are increasingly turning to chatbots to answer frequently asked questions, shorten customer wait times, and reduce company workload. Virtual programs are also being used to provide personalized recommendations. For example, Diageo’s What’s Your Whisky program analyzes responses to specific questions and uses the data to make a whisky recommendation that is likely to match customer preferences.

Regulatory Compliance

While it may seem counterintuitive to use AI in the alcohol industry due to the large volume of varying regulations and industry guidelines, it can still be a useful tool, particularly for complying with reporting and payment deadlines, which may reduce the burden on your compliance team. However, there are key considerations when using, selling, or purchasing these tools:

• Data Protection

With US states increasingly passing more comprehensive data privacy laws, it is vital to work with your information technology team and data specialists to maintain the security and anonymity of the data your company uses. For your convenience, McDermott’s global privacy and cybersecurity team has developed an interactive map tracking the rapidly changing state consumer privacy laws.

• Value

Data and AI undoubtedly have and will continue to have intrinsic value; however, it is difficult to quantify this value given the intricacies and varying degrees of use. It is important to consider how the value of data should be accounted for particularly when sharing, purchasing, or selling data or AI tools across tiers to avoid running afoul of tied house restrictions.

• Transparency

Finally, once you have clear goals for using AI or data, make sure you understand the rules and responsibilities, particularly regarding the use of personally identifiable information. Always be transparent about your collection, use, and disclosure of AI or data, and ensure your privacy policies are up to date.

We expect to see more industry guidelines develop [...]

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