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The Food Industry Embraces Artificial (Intelligence, That Is)

Posted by Charlotte Lee | June 14, 2018

As the volume of data that businesses have available at their fingertips continues to grow exponentially, the ability to distill actionable insight from these mountains of information becomes both ever-more valuable, and ever-more challenging. Herein lies the power of artificial intelligence (AI). One area in which this emerging technology holds particular promise is the food industry, where the combination of high volumes and low margins has driven intense competition, and the prevalence of repetitive tasks has made the scene ripe for digital disruption.

AI Transforms the Tastes of Tomorrow

Artificial intelligence (AI) is another one of those "cutting edge" buzzwords that gets thrown around gratuitously, but whose actual applications vary widely in scope, leading to uncertainty regarding exactly how it will shape the future economic landscape. Put simply, AI constitutes the programming of computers to receive data, analyze it, and make an informed decision based on this assessment in order to perform a given task. This process of translating information into action is intended to mimic the human decision-making processes—hence the term "artificial intelligence."

For the food industry, the real value of AI comes through its ability to optimize supply chains based on context, allowing for flexible adaptation to changes in product mix and even the broader distribution network when unforeseen events occur. The result? Lower labor costs and a more efficient use of resources.

By the estimates of one report from Research and Markets, the global artificial intelligence (AI) market in food and beverage (F&B) industry is forecast to grow at a CAGR of 42.18% during the period 2017-2021. It is now a question of not if, but when and how, this rising new technology will transform the tastes of tomorrow. And even within the food industry, AI will take on many different forms, many of which are already in practice. Read on to learn about some of the AI applications currently being implemented by food industry leaders.

Food Gets Smart

For the food industry, there are three main areas in which AI is anticipated to make a major difference in the next few years: product development, quality assurance, and customer experience.

Currently, food supply chains have a tough time keeping up with rapidly changing consumer preferences. AI will alleviate some of the pressure to constantly innovate by accelerating the pace of product development; the food industry is relatively unique in this regard, in that by nature, it can actually use AI to help determine which new flavors and ingredient combinations will win over the hearts (and stomachs) of consumers.

IBM's Chef Watson is just one of many such programs leveraging AI to discover new tastes. The cognitive computing application has the ability to read and analyze tens of thousands of recipes. Then, by combining and detecting patterns in the data, Chef Watson can suggest various ingredient combinations. While the platform has garnered attention for its use by at-home chefs, other companies are developing similar technologies to model consumer flavor preferences. With this insight, companies have the ability to develop new products targeted to particular audiences and demographics.

Even processes that have already been "automated" in the traditional sense can be improved upon through AI. This holds true especially with regard to quality assurance, where both legal and health concerns are at stake for the food processors. And in the process of doing so, AI can help reduce waste, as illustrated by Pieter Willems, technical director at TOMRA Sorting Food:

"Machines manufacturing French fries can struggle to deliver a consistent product because of the natural variation that potatoes have in size and shape. A machine will always try to make the same product regardless of the shape and size of the potato that went into the processing line. This uniform approach to food processing can create a great deal of unnecessary waste as you then have fries which are too short or too thin. However, if a machine is capable of identifying and then separating potatoes which are most suitable for French fries from those which are more suited to potato wedges or crisps, for instance, you have a much more efficient production line and a happier, more satisfied consumer enjoying the final product."

And the scope of AI's potential is not limited to only the manufacturing process; AI will also usher in changes to the front end of business, bringing improvements to the customer experience. Domino's is just one big name that has been experimenting widely with various AI applications, including the use of natural language processing to take orders through a virtual assistant. The pizza company spent 2017 piloting the latest iteration of its speech recognition program (which originally debuted in 2014), and finally deployed the technology on a wider scale earlier this year.

Barriers to Adoption

With so many benefits to be reaped, what has prevented the rapid, widespread adoption of AI technologies throughout the food industry as a whole? At the top of the list is cost. So far, AI experimentation has been restricted in large part to bigger industry titans with deep pockets, although 2018 has demonstrated that this is now beginning to change.

Second, as is the case with any digital initiative, there is also the challenge of change management. Digital transformation, the integration of new systems with legacy ones, and the migration of data involves a tedious process, especially when the existing systems are fragmented and there is no clear model for success to follow.

Finally, as touched on earlier, uncertainty around exactly what kind of value any given AI solution can deliver may make companies hesitant to invest this early on. Even with the right data, many solutions offered by vendors tend to work like black boxes; without transparency into exactly how their underlying algorithms make decisions, executives may be unwilling to take the leap.

For the time being, technologies such as AI won't take away jobs from their human counterparts, but rather, they will enable workers to increase productivity while freeing up time for higher value-added activities. And as consumer tastes trend towards foods that are increasingly healthy, unique, and handmade, AI will make it easier for companies to meet these changing expectations while remaining profitable—a win-win for both sides of the table.

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