Technology’s impact on all industries is undeniable and becomes more profound every year. Among other forms of technological advancements, alcohol beverage on-premise retailers are focused on the implementation and use of automated ordering systems – with or without artificial intelligence.
This focus is part of a larger movement among alcohol beverage on-premise retailers to streamline the customer service experience and minimize costs in the process. Technology plays a critical role in this movement.
Robotic Ordering Systems
Imagine walking into your local bar to be greeted by a robotic ordering system. It may be a human-sized robot emulating the parlance you typically receive from a human bartender or a phone application where you place your order and await a robot that comes to your table and dispenses your requested cocktail. While the types of robotic ordering systems are evolving, one thing is clear: these systems often do not fall squarely within the boundaries of the legal framework in which alcohol beverage on-premise retailers operate.
Here are a few considerations that on-premise retailers should be cognizant of as they roll out robotic ordering systems:
Alcohol Beverage Compliance Considerations
- Consumer Age Verification — With a few exceptions, it is illegal for an on-premise retailer to sell or serve alcohol beverages to a minor. Many states have laws or regulations requiring on-premise retailers (through their personnel) to review a consumer’s identification to verify if they are of legal drinking age before selling or serving alcohol beverages to them.
Notably, in some states that do not have these laws or regulations, an on-premise retailer can mitigate its penalties for an illegal sale to a minor by reviewing a consumer’s identification and verifying they are of legal drinking age prior to selling or serving alcohol beverages to them. As such, best practices typically entail undertaking consumer identification and age verification processes before selling or serving alcohol beverages.
Robotic ordering systems currently cannot accurately verify a consumer’s age. Still, there has been discussion around integrating facial recognition technology into robotic ordering systems to match consumer age and identification. Notably, once this technology is implemented, on-premise retailers will have to confirm that it is an acceptable form of consumer age verification under the alcohol beverage laws and enforcement policies in the states in which they are using these systems. If not, on-premise retailers must seek guidance from competent alcohol beverage counsel to understand whether the robotic ordering system could be used if supervised by a human who verifies consumer age.
- Server Training and Licensure — Many states have laws or regulations that require on-premise retailer personnel to:
- Undergo specific alcohol beverage server training and/or
- Hold an alcohol beverage server license or card.
Among other topics, alcohol beverage-server training courses teach bartenders when and how to say no to intoxicated customers. As with consumer age verification requirements, there has been discussion around how robotic ordering systems can successfully complete the training courses required under applicable alcohol beverage laws to secure alcohol beverage server licenses.
Relatedly, there has been discussion about how a robotic ordering system can detect consumer intoxication. Suppose there is no way to ensure an automated ordering system complies with these requirements in that state. In this case, on-premise retailers must seek guidance from competent alcohol beverage counsel to understand whether to use the robotic ordering system if supervised by a human who has complied with the training and licensure requirements.
Liability Allocation Considerations
In most instances, alcohol beverage on-premise retailers are outside the business of designing and manufacturing robotic ordering systems. Instead, they will likely lease or purchase these systems from a third-party designer and manufacturer.
While the risk for liability arising from the robotic ordering systems’ actions may be allocated between these two parties contractually, alcohol beverage agencies generally seek recourse for violations of alcohol beverage laws from the party that holds the alcohol beverage license for the licensed premises where the violation occurred.
Because these robotic ordering systems are typically located on an alcohol beverage on-premise retailer’s licensed premises, complex issues can arise regarding the party that will be held responsible for the robotic ordering system’s failure to comply with applicable alcohol beverage laws.
Minimizing Risk and Costs
Despite the above, the implementing robotic ordering systems will also positively impact on-premise retailers. In addition to minimizing costs of labor, robotic ordering systems will have better capability to ensure that the alcohol beverages poured for consumers meet exact measurements, thereby minimizing
- The risk of overserving consumers on the licensed premises; and
- The costs associated with a bartender’s overserving and resulting undercharging.
Further, on-premise retailers spend a lot of time and money managing high employee turnover rates. With robotic ordering systems, on-premise retailers can minimize many of the costs associated with hiring and training new personnel.
Striking the Right Balance Between Operational Efficiency and Customer Service
Technological innovation in the food and beverage industry, and the resulting benefits and downsides, will continue to evolve in the coming years. On-premise retailers must strike a balance between operational efficiency and customer experience.
If you are looking to roll out a robotic ordering system at your on-premise retail establishment, it is wise to engage competent alcohol beverage regulatory counsel in advance to ensure you have an understanding of the requirements under your state’s alcohol beverage laws.
Alexis Mason is a senior associate with GrayRobinson’s nationwide alcohol beverage department. Alexis’ experience includes work on multi-billion dollar beverage industry mergers, combining her corporate law and alcohol law acumen.