Artificial intelligence (AI) and its Impact on the Consumer Food Sector
30 Nov 2023 – A new Rabobank report detailed the potential for artificial intelligence (AI) to transform the consumer food sector. This includes refining operation processes, forging deeper connections with consumers, and developing innovative solutions for sustainability and nutrition. However, the report also highlighted significant risks to the industry, such as affordability issues, “AI washing,” and the dangers of irresponsible use.
According to the report, the global F&B industry could reach a market size of US$7 billion this year and US$35 billion by 2028, showing the transformative impact AI could have on the food sector. However, the high cost of implementing AI can be a daunting reality for food companies, especially in the early stages of exploration when the return on investment has yet to fully unfold. The report states that regardless of whether companies are large and powerful or small and specialized, we expect to see a deepening gap between technological leaders and laggards, which can lead to a widening imbalance of power.
In manufacturing, companies use AI to forecast demand, optimize production planning, and enhance quality control. Similarly, retailers are embedding AI into their tools and technology to improve existing operations, particularly regarding inventory management, demand forecasting, and shelf and checkout optimization.
Generative AI offers new routes for automating negotiations with suppliers, such as chatbots that help with delivery requests and handling orders. Companies are also using generative AI to create personalized services tailored to individual customer interests. However, a major barrier to AI’s proliferation in the consumer foods sector is concerns about data ownership. The report also outlined the potential for AI to push boundaries in product development, particularly in the alternative protein sector, and functional foods.
AI can play a crucial role in helping food companies achieve their environmental, social, and governance objectives by allowing them to reduce energy consumption and harmful emissions proactively. For example, Cargill has leveraged AI technology to progress towards deforestation-free supply chains by 2030.
