How AI is Advancing Food & Beverage
According to experts, artificial intelligence “is about to utterly transform the way we cultivate, produce, distribute and consume food.” In this context, machine learning will be leveraged to meet some “big, hairy challenges” — most notably, sustainability and world hunger. How? By improving our understanding of everything from plants to farming, to environmental impact, supply chain, production and more.1 While meeting those challenges are critical to the health of the planet and its inhabitants, there’s another context, another challenge that artificial intelligence can help us meet: the competition.
AI’s promise lies in its ability to capture, crunch and analyze data faster than humans — and in real time — in order to expedite innovation. Let’s take a look at some recent examples of AI-led innovation across the industry:
CPG
Analysts maintain that there are ten primary AI applications that drive CPG growth, but note that they are hard to achieve, as even large manufacturers have not yet mastered nor are organized for the learning:2
Therefore, many brands operate within the “sector-dependent” area, most often leveraging tools that drive personalization, product development or precision targeting. For example:
- Knorr’s ‘Eat Your Feed’, relied on an AI tool to personalize recipes. The machination scans subscribers’ Instagram feeds for clues as to their lifestyle and activities and merges them with Knorr’s recipe database to push relevant, contextual dishes.3
- StarKist utilized AI-powered social listening to find their way out of a sales slump. They analyzed thousands of social conversations related to tuna, healthy lifestyles and dieting to inform changes to on-pack messaging, marketing strategy and product creation.4
- Mars developed a product concept called ‘Maltesers AI Cake with Marmite Buttercream,’ by using a Google Cloud model that sifted through hundreds of recipes for inspiration.5
- Even ingredient suppliers are active. Givaudan launched ‘Advanced Tools for Modelling,’ a system using state-of-the-art AI that links consumer insight and ingredient combinations to “streamline end-to-end recipe creation and optimize food and flavor formulations.”6
- PepsiCo, noting the unmanageable mountains of data now available with the growth of e-Commerce, insists that artificial intelligence is the best way to “sift through it and direct messages to the right people,” crediting it with the ability to inform Mountain Dew’s Rise Energy launch.7
Retail
Much of the talk in retail revolves around the potential of AI-driven forecasting, pricing optimization and product placement, but here are a few others:8
- Kroger’s ‘Chefbot’ is an AI tool that leverages Twitter to personalize recipe recommendations. Users tweet three photos of ingredients they have on hand, and Chefbot delivers ideas within seconds.9
- Walmart is employing AI to improve the online experience, so that personal shoppers and customers can make better grocery substitutions for one of the most frustrating aspects of e-commerce: out-of-stocks. The technology instantaneously “considers hundreds of variables — size, type, brand, price, shopper data and inventory to recommend the next-best item.”10
- Amazon is using AI to reduce packaging waste — some 500,000 tons — by optimizing packing material and outer box size, as well as determining when a product can ship without an outer box.11
Restaurant
Within foodservice, there’s heavy use of AI for ordering and delivery as well as expanded usage for product quality, marketing and customer relationship management:
- Domino’s has leveraged AI to scan pizzas for quality assurance, automate delivery operations, forecast, and enhance makeline and cutting technologies to match demand with capacity at the store level.12
- Yum! Brands, Inc. acquisition of Dragontail will provide improvements in kitchen order management and delivery.13
- El Pollo Loco has been dabbling with AI and believes “it will change the dynamic of personalized marketing and change the cost structure of loyalty programs in the future.”14
- AI-powered robochefs are expected to become common in major cities.15
- Voice-AI is being discussed as a “change agent” for the restaurant industry, e.g., consumers using voice-enabled search, restaurant integrations with Alexa and Google home enabling information on customer order history as soon as they call, and technology that helps operators quickly upsell complementary items and reduce food waste.16
- US Foods hungr Kitchen will use AI to promote its virtual brands to consumers.17
While we fully realize and are in awe of the potential, we recommend that brands not over rely on AI for accuracy. It’s still a prediction model and capable of “learning the wrong thing” when making those predictions. The pandemic, for example, was not part of its predictions and therefore hindered its ability to anticipate the road ahead… just like the rest of us!18
Katherine Plueger
Vice President, Strategy & Insights
Katherine Plueger conducts category, competitive and consumer research to develop the actionable insights that lead to better strategy for our clients.
[1] “The future is not what it used to be: How digitization will revolutionize the food system”, FoodDive, 12/14/20
[2] “Cracking the AI Code in CPG”, Boston Consulting Group, 5/12/20
[3] “Knorr cooks up AI tool to splice Instagram memories into meals”, The Drum, 3/16/18
[4] “How Social Listening Speaks to Brands and Improves Consumer Targeting”, Adweek, 6/16/21
[5] “Mars creates world’s first Marmite-frosted cake/cookie hybrid developed by AI”, Bakery and Snacks, 3/31/21
[6] “Givaudan leverages AI for ‘next generation’ product development”, Food Navigator, 2/19/21
[7] “PepsiCo Gives Its Big Brands a Narrow Focus”, Adweek, 5/18/21
[8] “Artificial Intelligence in Retail”, Intel, 2021
[9] Press release, Kroger.com, 10/12/20
[10] “Walmart enlists artificial intelligence for online grocery substitutions”, Supermarket News, 6/25/21
[11] “Inside Amazon’s quest to use less cardboard”, Fast Company, 10/19/20
[12] “Domino’s teams with Datatron to streamline AI and machine learning tech”, Restaurant Dive, 3/23/21
[13] “Yum Brands Inc to acquire tech firm Dragontail Systems for $72.6 million”, Nation’s Restaurant News, 5/27/21
[14] “El Pollo Loco’s VP of Digital Takes the Brand (And Its Food) To New Heights”, Adweek, 7/15/21
[15] “5 Technology Predictions for Restaurants in 2021”, Restaurant News, 3/23/21
[16] “How Voice AI Is Changing The Way People Order Food”, Forbes, 5/07/21
[17] “Delivery provider hungr launches turnkey virtual restaurant brands in partnership with US Foods”, 2/23/21
[18] “Revisiting AI’s role in retail”, NRF, 6/17/20