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AI and Sustainability: Future-fitting the food and beverage industry in 2024

February 20, 20243 min
Yaseen Burt photo
Yaseen Burt

Sustainability is a major and growing concern facing modern industy. Among the top ten global industries, food and beverage (F&B) is a juggernaut with accelerated annual growth bringing economic benefits to millions. Yet, as one of the planet’s biggest polluters, the industry faces increasingly complex environmental and social challenges, all fueled by a constantly growing global population.

Creating a sustainable food system means meeting future market demands while minimizing resource depletion and environmental impact. Further, increasingly stringent ESG (Environmental, Social, and Governance) reporting requirements are moving F&B companies to address sustainability challenges head-on or face the consequences of investor reluctance and damaged brand perception.

The movement towards a more sustainable F&B industry  

F&B companies that recognize the importance of sustainability as a long-term strategic opportunity are adopting digital transformation as an avenue towards improved operations and meeting ESG targets. 

Further, new and more agile market entrants are challenging the power dynamics of an industry long dominated by incumbents. Free from legacy systems and ingrained processes, small players enter the market with a competitive mindset that’s geared towards addressing roadblocks to efficiency, agility, sustainability, and customer-centricity. 

Catering to shifting consumer preferences that demand healthier, more sustainable, and personalized options, is creating vastly profitable opportunities for F&B companies of all sizes. 

However, according to a Boston Consulting Group study, building more consumer-focused products requires a blend of creativity and strategic thinking from big players: “CPG companies must commit to cultivating and sustaining an innovation function that encompasses “north star” strategic ambitions, exceptional talent, dedicated capability building, efficient processes, discrete measurement, and effective governance.” 

The article goes on to say that the resources required to achieve the aforementioned are often “…embedded in existing business functions, thereby limiting their ambition, scope, and impact.” Yet, the fact remains that consumers increasingly want uniquely tailored products with cleaner ingredients and ethical sourcing practices. This shift places a premium on consumer-centric innovation that is rooted in a deep understanding of their needs and motivations.

Adding a new voice to the sustainability conversation

Technologies like Machine Learning (ML) and Artificial Intelligence (AI) can help large F&B companies speak more directly to consumer’s sustainability concerns and expectations. For example, AI models are already optimizing supply chains, reducing spoilage, less energy consumption, and fewer landfill-destined product surpluses.

But it can also help F&B companies tap into consumer expectations beyond the supply chain. This involves joining on and offline conversations to uncover signals that amplify consumer-driven trends around sustainability. Agile companies excel at tapping into such trends, allowing them to focus on niche markets like plant-based products, functional health needs, and locally sourced ingredients.

Accelerating sustainable product development

AI-empowered product development teams can formulate new plant-based products, reduce sugar and saturated fat content in food, or tailor nutritional values with remarkable accuracy. Further, its ability to simulate food and beverage concepts allows companies to experiment without incurring high costs associated with multiple R&D iterations, while minimizing waste and accelerating the journey from concept to product launch.

To navigate the intersection of sustainability and consumer demands effectively, F&B companies need insights that delve beyond traditional market research. Tastewise utilizes sophisticated generative AI (GenAI) to perform exactly this task. The platform acts as a bridge to the consumer’s pulse, decoding behaviors, motivations, and the nuanced values behind their daily buying decisions. 

For example, Tastewise can help F&B teams identify that a growing interest in upcycled ingredients is more than a short-lived trend, but an opportunity with long-term mainstream potential. Equipped with such insights, F&B companies gain the crucial advantage of responding to sustainability trends and the complex human motivations behind them. This type of business intelligence paves the way to innovation aligned with the future of sustainability – one that is guided by genuine consumer demand.

For F&B decision-makers, there is no better time to embrace AI as a strategic pillar of sustainability. Those willing to take a proactive approach are ideally positioned not only to meet ESG targets, and protect brand reputation but also to seize new opportunities in a world hungry for change concerning how we treat our planet. 

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