How can AI and digital transform the spirits industry?

The CEO of Proof 8, Rob Hollands, discusses the power of AI and digitised operations to build a more secure, transparent and prosperous industry.

Paris was a hive of business events and networking opportunities earlier this month, from Wine Paris to the annual Rum Summit. But there were also multiple AI-focused summits taking place around the same time – which gave Rob Hollands, CEO of Proof 8, much to ponder on.

The Real World Asset (RWA) Paris Summit focused on RWA tokenisation, the conversion of physical assets, such as whisky casks, into digital assets that enable digital ownership.

“One thing was clear: this isn’t just a technological evolution; it’s a fundamental shift in how we perceive and interact with tangible value,” Hollands notes. “From fine art to real estate, digitalisation is reshaping ownership, unlocking liquidity and bringing transparency to historically opaque industries. The conversations in Paris last week underscored that the wine and spirits industry is well positioned to embrace and maximise these opportunities.”

For Hollands and Proof 8, the analogue, often paper-based, approach to documenting spirits production and ownership results, primarily, in a lack of transparency and inefficiencies across the supply chain.

“Provenance, storage, maturation, and transaction history are often recorded in siloed paper documents or basic spreadsheets, leaving producers, warehouses and consumers exposed to risk,” says Hollands. “Manual data entry, still a staple of the industry, is time-intensive and prone to human error. Furthermore, inconsistent recording standards between distilleries, brokers, and warehouses create further ambiguity. Lost records pose significant risk, and the lack of transparency opens the door to fraud. In fact, a 2018 study by the Scottish Universities Environmental Research Centre found that up to 40% of vintage whiskies on the market were fake – a staggering statistic that highlights the urgent need for better traceability and accountability.

“With the global whisky market valued at approximately US$66.9 billion and predicted to reach US$73.5 billion by 2029, the absence of a standardised, immutable system to verify authenticity and ownership represents a major vulnerability. The industry must act now to create a more transparent and verifiable marketplace for spirits trading.”

Digital transformation

Hollands and his team at Proof 8 are working to help spirits producers digitise their assets from the start of production. It’s a “game changer”, he stresses.

But how does it work?

Each cask or bottle is assigned a verifiable, unique digital identity that is tracked throughout its lifetime, “what we call a ‘digital deed’”, Hollands explains.

“These digital records create a permanent, tamper-proof ledger of ownership, eliminating fraud risks and enhancing consumer confidence.

“Digitalised assets also open up new models of ownership, including fractional ownership. By digitally dividing high-value assets, brands can offer opportunities that were previously out of reach for many, democratising access to luxury spirits. More collectors and enthusiasts now have the option to own a stake in a rare asset – an opportunity that was once reserved for a privileged few.”

Another important benefit to digitalising operations, Hollands adds, is the ability to streamline logistics from distillation to maturation, and up to the point of sale. “More importantly, it strengthens the supply chain, reducing bottlenecks, improving traceability, and giving producers, distributors, and consumers real-time access to critical data,” he adds.

AI, digitalisation and the next frontier for wines and spirits

AI advancements have been the talk of the town, particularly over the past 12-18 months. By embracing the digitalisation of supply chains and assets, AI can be incorporated to analyse “vast datasets”, optimise inventory management, forecast market demands, and more.

Hollands quotes Google’s CEO, Sundar Pichai, from the AI Action Summit last week: “We’re still in the early days, yet I already believe AI will be the most profound shift of our lifetimes – bigger than the shift to personal computing or mobile. And it will do more to democratise access to information than the internet.”

As Hollands advises: “Unlocking AI’s potential requires more than just technology; it demands an ecosystem of innovators, adopters, and infrastructure.

“With these great opportunities comes great responsibility. As highlighted in Diageo’s recent Distilled report, brands must ensure AI implementation is ethical, transparent, and aligned with authentic applications that foster creativity and enhance efficiencies. Addressing concerns over data privacy, job displacement, and the ethical use of AI-generated content is crucial to maintaining consumer trust.

“Just as AI is revolutionising industries from healthcare to finance, its role in the spirits sector is only beginning to unfold – but its potential is undeniable.”

What does the future hold?

The key takeaway from last week’s summits was how technology and AI present an “unprecedented opportunity” for the global spirits trade, Hollands notes. Technology could support developments in creating a more transparent industry – and a more secure one, for added bonus.

Hollands concluded: “Consumers, in turn, will benefit from greater trust, ease of ownership, and access to a previously exclusive market. The reality is that digital transformation is reshaping every industry.

“From AI-driven efficiencies to new ownership models, the innovations showcased in Paris this week will ripple far beyond the conference halls – they will redefine every industry, including wine and spirits.

“For those ready to embrace change, the future is already being distilled.”