The article was originally published on FoodTalks at https://www.foodtalks.cn/news/52032
Author: Aimee, Researcher at FoodTalks
In early 2023, OpenAI's ChatGPT made a grand entrance, sparking widespread discussions about AI. This wave of AI innovation reached the food and beverage industry, influencing a wide range of operations, from smart production in lighthouse factories to packaging.
2023 marks the inception of AI applications in the CPG industry. In April and May, Yili and WALOVI applied AI to packaging. In July, Kraft Heinz (China) experimented with AI to develop vegan cheese with NotCo. In September, Coca-Cola launched a new flavor, "Future 3000," co-created with AI. In September 2024, lifestyle brand retailer MUJI introduced "AI Chips." Globally, AI is increasingly involved in the development, production, and design of the food and beverages (F&B) industry.
AI is gradually transitioning from a lofty ideal to practical application in the F&B sector. Many companies have recognized AI's astonishing efficiency and "capability" in terms of new product development speed, creative novelty, grasp of consumer taste preferences, and much more. However, not every company can make good use of AI.
On March 15th, 2024, the "Crossover Talks Overseas Series - Shanghai," co-hosted by Profet AI Suzhou, Profet AI, AUO Digitech, Fusi Capital, Acer AEB, and GrandaWit, brought together industry-leading companies like Wei Chuan Foods and Hsu Fu Chi to discuss the practical application and innovation of AI in the food and beverage industry.
AI Empowering CPG Industry: Preserving Experience and Innovation
Speaker: Eugene Chang, Technical Director of Greater China, Profet AI Suzhou
The urgent need for efficiency in businesses calls for the implementation of AI.
In today's rapidly evolving information technology era, AI's rise allows companies to escape "diligent laziness" and realize exponential growth potential. Eugene Chang believes that economic downturns and changing consumer tastes pose significant challenges to the food industry. AI can empower flavor development, production quality, efficiency enhancement, personalized marketing, consumer insights, and supply chain management. This facilitates rapid market response and product development that resonates with modern consumers.
Focus on "predictive analysis of structured data" with AI, finding trend patterns and targets through variable control. Source: Wei Chuan Foods
However, to realize these goals, AI machine learning applications face challenges, primarily because domain experts and AI experts are different. For AI to be fully effective, user-friendly platforms are necessary for businesses to make more accurate business decisions.
AI, at its core, addresses efficiency issues but doesn't replace decision-making. Chang highlights that AI forms the top layer design, while experience preservation and judgment standardization form the fundamental concept. He anticipates that AI will bring new efficiency, driving industry innovation and transformation.
Creating Cross-Domain Data Scientists Through AI
Speaker: Dr. Jia-De Wei, Global CIO, Wei Chuan Foods
AI predicts markets and creates competitive barriers; citizen data scientists drive technological changes and domain collaboration.
"Good use of AI will significantly widen the competitive gap at both corporate and individual levels. The difference in work efficiency will be starkly apparent," shares Dr. Wei.
In the digital era, AI's empowerment is leading to a qualitative change in every functional area, urging businesses to transform. The CPG industry is heading towards more efficient manufacturing processes, intelligent inventory management, and precise market positioning.
AI topics exploration path and process. Source: Wei Chuan Foods
Dr. Wei emphasizes the need to nurture citizen data scientists as the core of businesses lies in domain knowledge. Promoting AI requires straightforward platforms that allow domain experts to excel.
Enterprises in the future should build their own AI applications data knowledge base. Source: Wei Chuan Foods
Companies must establish proprietary application case knowledge bases in the future. Wei Chuan's flavor map application case, facilitated by Profet AI, accelerates the development of new flavors by finding the logical relationships between consumer sensory perceptions and recipe ingredients.
AI-Driven New Productivity in Beverages Production
A. Surpass or Be Surpassed
Speaker: Zhen-Dong Wang, CEO of Double Win
AI aims to break efficiency limits, with human-machine collaboration reshaping the market.
Zhen-Dong Wang, CEO of DoubleWin, believes that "under AI's influence, the limiting factor for innovation will no longer be customer demand but research and development efficiency."
How will AI reshape the F&B industry?
While the use of big data presents issues such as ambiguity, distortion, and delays, and lacks sufficient matching assessment standards between demand and solutions, and flexibility in transforming product plans into production plans in ERP systems, consumers making purchase decisions cannot effectively impact other aspects of the supply chain. However, driven by AI, pre-research and development work, data set formation, and precise matching of purchase needs can lead to reduced product inventory, shorter supply cycles, and increased order volumes.
AI empowering innovative productivity. Source: Double Win
2. How can intuitive product experiences be transformed into rational data?
In the past, we relied on experts, but now we increasingly depend on AI, using optimized model parameters to predict consumer preferences and thus adjust the product lines. Understanding and utilizing data is a question worth pondering. Achieving human-machine collaboration and transforming sensory experience into rational data is key.
3. Who will AI represent?
Wang points out that AI has limitations and cannot undertake job responsibilities. Hence, it's clear that while we pursue technology, AI is meant to assist humans, not replace them. Those who cannot use AI, do not strive for optimal solutions, lack responsibility, or judgment are likely to be overtaken by AI.
B. Using AI to Narrow Brand Gaps, Accelerate Catch-up
Speaker: Yu-Sen Chen, Founder, Cocoa Community
AI aids research and development, market prediction, and helps startups keep pace with major brands.
"AI will become a key technology for new brands to quickly catch up with major brands," said Chen.
Application example: AI optimized recipe recommendation - suggesting the best formula ratio from the targeted flavor outcome. Source: COCOA.
During his sharing of "Exploring New Flavor Journeys," Chen elaborated on how AI helps speed up beverage development and optimize formula research processes in collaboration with Profet AI. AI can provide precise analysis of ratios, suggesting the best recipes for beverages and creating consumer profiles using user data. By doing so, they can not only understand consumer preferences but also predict future market trends, enabling small businesses to keep pace with the market.
Roundtable Discussion: Challenges and Opportunities of AI Applications
Participants included Harold Cheng, General Manager of Profet AI Suzhou; Dr. Jia-De Wei, Global CIO of Wei Chuan Foods; Wang-Yan Zhou, R&D Project Manager of Hsu Fu Chi; Zhen-Dong Wang, CEO of Double Win; and Dr. Shu-Kai Fan, President of the Chinese Institute of Industrial Engineers and Dean of the College of Management at NTUT.
During the roundtable discussion, Wang-Yan Zhou, R&D Project Manager of Hsu Fu Chi, along with Dr. Shu-Kai Fan, President of the Chinese Institute of Industrial Engineers and Dean of the College of Management at NTUT, joined the conversation. They explored the challenges of digital transformation in the CPG industry and discussed how AI can be leveraged to optimize product development, enhance production efficiency, expand into diverse channels, and use data analysis to predict market trends, leading the way in food industry innovation.
1. Dr. Jia-De Wei, CIO of Wei Chuan Foods
AI plays a role in reducing costs and increasing profits in large F&B groups. Businesses should integrate data empowerment into their business strategies for medium to long-term development, necessitating proactive AI transformation and solution proposals from corporate leaders and IT departments. Additionally, providing user-friendly AI tools is crucial for enhancing user acceptance of AI.
2. Wang-Yan Zhou, R&D Project Manager of Hsu Fu Chi
From an R&D perspective, the use of AI has accelerated data collection and application, significantly improving team efficiency and quality. On the management level, AI has hastened the training of new employees and helped review the shortcomings of previous standard settings.
However, the benefits AI brings to businesses also face implementation challenges due to differences in AI usage understanding among individuals and departments. Demonstrating how AI enhances efficiency and creates value through practical cases, and convincing more people to accept and participate in the initiative with clear results, is one potential solution.
3. Zhen-Dong Wang, CEO of Double Win
AI has evolved from a tool to a stage of technology science (with perception ability). Now, it is no longer a tool for specific roles but a comprehensive assistant that can be utilized in any position. A specialized platform can further enhance the operability of AI technology, achieving human-machine collaboration.
4. Dr. Shu-Kai Fan, President of the Chinese Institute of Industrial Engineers
AI's significance lies in efficiency enhancement. To keep up with market rhythms, enhance productivity, innovate, and strengthen product completeness, leveraging AI technology is imperative. For businesses, AI can further facilitate digital and green transformations at the same time.
To fully capitalize on AI's benefits, businesses need to improve existing systems, base their approach on domain knowledge and data use, and understand customer psychology. Also, nurturing new-era talent and propagating domain expert knowledge by integrating traditional craftsmanship into digital platforms is crucial for innovation. Finally, implementation is the only path to industrial AI transformation, where human-centricity is a must.
Conclusion
From smart production processes to innovative product development, marketing strategy optimization, and personalized customer experiences, AI-based big model technology is empowering the food and beverage industry.
According to Mordor Intelligence, the AI application value in the food and beverage industry was about US$3B in 2020 and is expected to reach US$100B by 2024 and up to US$500B by 2029, with a compound annual growth rate of near 40% from 2024 to 2029.
AI is revered for its ability to reduce costs and increase efficiency. It can quickly respond to market demands, profile consumers with data, and help businesses develop innovative products that match contemporary consumer tastes, thus creating competitive barriers. However, for businesses, the challenge lies in how effectively AI is used. Solidifying systems, nurturing talent needed for the AI era, advancing cultural transformation, and achieving human-machine interaction are essential measures to avoid being outpaced by the times.
Finally, as emphasized by the sharing guests, AI is a tool to enhance efficiency but cannot replace human decision-making. It requires a combination of human warmth and subjective correction. Thus, co-creation between AI and humans may be the most effective way of collaboration.