Imagine a world where someone knows exactly what you like and dislike, what you want and what you love. They even know you better than, well, you do. That’s the new world of personalized advertising being utilized by some Food & Beverage (F&B) and other companies, thanks to AI. F&B companies are using AI to personalize ads, creating marketing tailored to individuals to boost revenues – by giving you what you want through data that lets brands seemingly read your mind.
“Chains, such as Amazon and Walmart, are already using AI to personalize in-app recommendations and increase sales,” according to the Food Institute. “AI is going to be a critical key that unlocks deep and meaningful consumer connections for brands.”
While companies use big data to figure out big trends, they can also use “little” pinpointed data to appeal to individuals. AI, in other words, lets brands adapt messaging based on customer feedback in real-time, as well as social media and other sources, boosting return on investment. Know thy customer? Companies hope they can connect with customers better and understand how to present their products to appeal to “you.”
“This gives brands the savvy to know consumer pain points, excitement triggers, and even the emotional language that best speaks to their audience,” according to the Food Institute.
Big brands are betting on more personalized approaches. Coca-Cola, for instance, is tapping Bain & Co. and OpenAI to use AI to personalize messages for consumers. Meanwhile, Mondelēz International tapped Accenture to generate personalized text, images, and videos.
AI is altering F&B marketing in other ways, too. As F&B chatbots go from primitive to helpful, they can provide answers and suggestions that advance sales, conducting conversations with consumers that upsell.
An American Express report found more than half of customers are willing to spend more on companies that provide “superior customer service.” AI, in theory, can give people what they want.
The personal touch
Big brands like Coca-Cola and Mondelēz International are leveraging AI technologies to personalize … [+]
Customer service no longer simply means better training for call center representatives. AI lets chatbots better tailor responses to questions and suggest sales. Kellanova, for instance, developed ways to empower Mr. P—the Pringles potato chip mascot – to answer questions.
“AI is being applied to understand consumer behavior, which is expected to lead to more accurate predictions,” according to Mordor Intelligence ’s study ‘AI in Food & Beverages – Market Share Analysis, Industry Trends & Statistics.’ “It can further enable marketers and organizations to reach out to customers personally, engage in deeper interactions, and enhance their overall experience with the brand.”
While Coca-Cola and Mondelēz International recently announced big deals to expand using AI in marketing and customer service, other F&B companies are using AI to improve logistics, develop ingredients, create meat alternatives, and roll out new flavors and products faster.
These two letters are changing F&B, leading to significant investments and partnerships as F&B finds itself all in with AI. The idea is that after big data, AI offers better data, or at least ways to harness data better and improve business. What’s not to like?
Still, AI comes with a cost, is personal and impersonal, and is only as good as the data and software used. And it’s too early to tell the hype and the hope from the help. Sometimes, the press release is a prelude to the product; sometimes, it “is” the product. But F&B giants are betting AI can boost sales and, maybe, margins.
“The food and beverage sector is mostly a very high-volume and low-margin industry,” according to Mordor. “Finding new ways to increase efficiency can make the difference between a facility turning a profit or a loss.”
AI as an asset
AI is revolutionizing the F&B industry by leveraging vast amounts of data to enhance marketing, … [+]
The industry has so much data and transactions that AI can genuinely alter the game. The data’s been there. Now, companies are using AI to decide what to do with it, reaping rewards from what has been a repository of information.
“We see opportunities to enhance our marketing through cutting-edge AI,” Coca-Cola Co. CEO and Chairman James Quincey told Bain & Co., “along with exploring ways to improve our business operations and capabilities.”
All this is turning F&B AI into a big sector that is only expected to grow. According to Mordor, the AI food and beverages market size is estimated to grow from $9.68 billion today to $48.99 billion by 2029.
On the most basic level, AI also can accelerate product development. Nuritas, for instance, hopes to use AI to develop new F&B ingredients, identifying good prospects to create healthier versions of existing food.
“The ingredients are very old,” Nuritas CEO Nora Khaldi said of F&B, according to the Institute of Food Technologists. “They are built for taste and cost, and health is not even a part of the equation.”
AI is helping F&B businesses reduce time to market, improving and adapting supply chains, and impacting logistics, predictive analytics, and transparency. If you can better predict how ingredients perform, you can develop new products quickly.
“AI is being used to monitor soil and nutrients, reducing F&B waste, improving safety and boosting profits,” according to CAS Custom Services. While “80 percent of new products fall short,” CAS argues that AI-driven predictive analytics can improve that.
AI is transforming supply chains in the F&B industry by analyzing vast amounts of data to anticipate … [+]
Nestlé, for instance, already uses AI to analyze trends, explore ingredients, and look at health impacts, according to CAS. The Not Co., which uses an AI platform known as ‘Guiseppe’ to develop plant-based alternatives, took ten months to develop NotMayo. CAS said that they were able to create NotChicken in two months with AI.
AI is already helping optimize fertilizer usage, according to CAS. And AI is being used to make F&B equipment more efficient, letting machines learn and perform better from sorting to packaging.
In 2022, Rockwell Automation debuted cost-effective photoelectric sensors for handling materials, packaging, and assembly for smaller objects such as food and beverages.
“Supply chains are generating massive amounts of data,” according to Mordor. “And AI is helping organizations to analyze this data and better understand variables in the supply chain by anticipating future scenarios.”
AI in supply chains is helping F&B businesses anticipate and deal with uncertainties, reducing labor expenses and improving speed through automation.
Thanks to AI, robotic technology is also improving. Wings and Rings partnered with Miso Robotics to offer Flippy 2 in restaurants, using robotics powered by AI, machine learning, computer vision, and data analytics in commercial kitchens.
And a robotic sidewalk delivery start-up announced a deal with Sodexo, delivering more than 1,200 robots across 50 U.S. college campuses.
Ironically, AI can provide more personalized service than people, leading to deals like Coca-Cola and Mondelez did.
We’re already seeing how AI impacts F&B, and it’s likely to affect the industry in ways we can’t even anticipate. One thing is so clear, you don’t need AI to notice it: While many F&B companies are looking into AI, those that completely ignore these two letters are missing out. “If you stand still,” Quincey told Bain & Co., suggesting that AI may just turn out to be the next ‘real thing,’ “you’re going to fall behind.”