OVERVIEW

• Generative AI is changing how consumers search, learn, and buy

• Traditional search behavior and brand discovery are being disrupted

• This poses new risks to brand visibility, loyalty, and conversion in the adult beverage space
  

RISK 1: LOSS OF BRANDED SEARCH TRAFFIC

• AI search delivers direct answers, bypassing websites and branded content

• Fewer visits to owned assets (e.g., brand sites, tasting room pages)

• Impact: Reduced DTC conversions, mailing list sign-ups, and event awareness

• Example: A query like “best bourbon for old fashioneds” yields AI summaries—not links to specific brands like Bulleit or Woodford Reserve, etc.

RISK 2: COMMODITIZATION OF PRODUCT RECOMMENDATIONS

• AI prioritizes product attributes (ABV, style, price, awards) over brand equity

• High-end or craft brands may be equated with cheaper alternatives

• Impact: Loss of premium positioning, especially among discovery-phase consumers

• Example: Instead of recommending Stag’s Leap, AI suggests “any California Cab aged in oak with 14%+ ABV”
  

RISK 3: DECLINE IN SEO & PAID AD ROI

• AI reduces clicks on search ads and organic links

• Traditional investments in content and PPC may underperform

• Impact: Reduced ROI from digital ad campaigns and lower web visibility

• Example: A Google query for “best tequila under $50” gets answered by AI—ad impressions and link clicks drop

RISK 4: BRAND MISREPRESENTATION

• AI may use outdated, inaccurate, or third-party content to describe brands

• Lack of control over how tasting notes, production methods, or values are presented

• Impact: Consumer trust and brand identity suffer

• Example: AI incorrectly says your whiskey isn’t small-batch or suggests you use additives

RISK 5: EROSION OF DISCOVERY & IMPULSE PURCHASES

• AI search is utilitarian — focused on solving for “best” or “top-rated”

• Brands lose opportunities to inspire or emotionally engage buyers

• Impact: Fewer impulse buys, less aesthetic-driven trial, weaker storytelling

• Example: No visual bottle recognition, shelf appeal, or cocktail pairing inspiration

RISK 6: LOSS OF FIRST PARTY DATA

• Fewer users visiting brand sites means fewer opportunities to collect emails, preferences, and behavior insights

• Impact: Harder to build loyalty programs, retargeting pools, and direct CRM channels

• Example: Consumers who once visited your tasting room page now get AI-curated directions or product info instead

RISK 7: OVERRELIANCE ON RETAIL PLATFORMS

• AI increasingly pulls data from retail sites (e.g., Drizly, Instacart, Total Wine)

• Brand visibility becomes dependent on 3rd-party platforms and ranking algorithms

• Impact: Brands have less control over pricing, positioning, and access to consumer data

• Example: AI recommends products based on platform reviews and availability—not brand story