F&B Strategy: Is Traditional Research Failing CPGs?

F&B strategy, or food and beverage strategy, is crucial for the success of consumer packaged goods (CPG) companies. While market research has been key for CPGs in shaping their F&B strategy, the evolving industry landscape and consumer preferences now demand more innovative approaches for staying competitive.

This article explores whether traditional market research methods are still effective for CPGs in developing their F&B strategy, or if new techniques need to be adopted.

What is F&B Strategy?

F&B strategy refers to the overall plan and approach that a consumer packaged goods company takes in developing, producing, and marketing their food and beverage products.

This includes everything from product development and sourcing ingredients to packaging design and distribution channels.

A strong F&B strategy is essential for CPGs as it not only determines the success of their products but also shapes their brand image and reputation in the market.

The Role of Traditional Research in F&B Strategy Development

Traditional research methods, such as focus groups, surveys, and consumer interviews, have historically played a pivotal role in the F&B strategy development for CPG companies.

These techniques allow firms to gain insights into consumer behavior, preferences, and the overall performance of their products in the market.

However, as the F&B landscape evolves, so do the cpg industry challenges, making it increasingly difficult for traditional research methods to capture the fast-changing consumer preferences and market dynamics.

This shift necessitates a reevaluation of how research is conducted within the industry, signaling a potential move towards more dynamic, real-time data collection and analysis techniques to stay ahead in a competitive market.

Beyond the Surface: Unveiling Consumer Drivers

Traditional market research methods have irreplaceable value in F&B workflows. However, used in isolation, they’re prone to giving incremental snapshots in time that often reveal opportunities in hindsight. 

Focus groups and surveys can and do offer insights into general consumer preferences and responses to products, but they often struggle to capture the deeper “why” behind consumer choices.  

Further, social media discussions, online reviews, and menu trends offer a wealth of data, but analyzing and interpreting volumes of unstructured information isn’t exactly within the range of expertise of most F&B marketing teams.

Add to this a growing range of software solutions that need integration with every other system and the complexity of adopting transformative technologies can seem fraught with barriers to insights.

And for many F&B companies, the lack of internal expertise and the learning curve can lead to analysis paralysis. 

This highlights the importance of software solutions that place a high focus on user-friendliness and incorporate user experience principles into their products.

Also, providing solid user onboarding and making readily updated educational resources available go a long way to delivering returns on investment.

AI: The missing link in your F&B strategy

Artificial Intelligence (AI) is a powerful partner for existing research tools and workflows. Its ability to excel at analyzing vast amounts of unstructured data and interfacing with humans in a very “human” way, helps companies uncover hidden patterns, connections, and consumer idiosyncrasies that traditional methods might miss. 

In particular, its ability to sift through vast amounts of consumer conversations across social media platforms, review sites, and restaurant menus creates new opportunities for hyper-personalization of food and beverage products.

For example, identifying subtle signals that point to previously underserved consumer segments with specific dietary needs or flavor preferences can open new markets to early adopters.

AI’s ability to spot sprouting flavor trends, ingredient combinations, or preferences before they hit the mainstream is allowing F&B companies to capitalize on them early and these are some of the reasons why AI for CPG is so effective and crucial.

By analyzing sales data alongside consumer needs and motivations, F&B sales teams can address challenges with underperforming SKUs or find innovation gaps in a product category that traditional methods, including the competition, do not have sight of.

In essence, AI refines and deepens the business intelligence gleaned from traditional research methods. It provides a panoramic view of the F&B consumer, allowing companies to make more informed decisions faster, thanks to real-time and easy-to-understand consumer behavior insights.

Harnessing Ai for a More Focused F&b Strategy

Companies that blend AI tools with their existing research stand to gain a significant advantage over their peers.

AI allows these companies to launch more bespoke product ranges tailored to both niche and larger audiences. Perhaps one of its greatest benefits to large F&B companies is that it makes pivoting on existing product lines much easier. 

In a partnership with Tastewise, national retailer, Kroger, gleaned an entirely new vantage point over its customer base. Tastewise’s proprietary generative AI engine’s ability to analyze vast amounts of real-time information allowed Kroger to uncover previously missed trend signals and customer purchasing motivations.

Going beyond demographics, Kroger can pinpoint underserved groups, and anticipate new big flavor trends, thanks to a new grasp on what makes their customers tick. 

Internal processes also benefit through streamlined product development workflows, reduced concept testing, and a generally more customer-centric way of thinking about their products.

The New Game Plan

The food and beverage industry is undergoing major changes as digital disruption continues unabated. Success demands that F&B companies understand the nuances of consumer behavior.

Adopting AI offers a significant strategic edge and acts as an ideal support to existing systems and methodologies relating to market research. 

The full potential of the data F&B companies already have becomes more potent when subjected to AI technologies that are inherently smarter, faster, and more autonomous than incumbent methods – and smart F&B leaders know this.