The value of the market for artificial intelligence (AI) in the food and beverage industry is expected to reach a staggering $29.94 billion by 2026. Already in use by early adopters across the industry, it’s clear that AI is making its presence felt in more ways than one, impacting all aspects of the food supply chain, driving smarter, faster decisions, and underpinning that all important competitive advantage.
Many regard AI as the machinery and technologies used to carry out complex tasks that previously required human thought to complete, but it goes even further than that, enabling new approaches to data analysis that simply are not possible to do manually. This is where AI comes into its own, with the ability to consider an inordinate number of data values, parameters, what-if scenarios, and other contributing factors to produce accurate and timely recommendations for almost every aspect of the food supply chain. Ultimately, this provides a competitive advantage that it would be impossible to replicate without the application of AI technologies.
So where is AI in action across the food and beverage industry and what impact is it having?
Precision farming
AI technologies are being used to bring new depths of precision to farming. So, this might be analysis of past harvests in terms of both quantity and quality, in combination with weather forecasts to inform which fields need watering and when, or when to use fertilizer perhaps. In the aquaculture sector, there is a business that is using AI technology to ensure accurate doses of feed are administered in shrimp farming, avoiding over and under-feeding. This serves to lower the feed conversion ratio and shortens the shrimp production cycle, doubling production without huge intensification.
Pricing strategy
With the constant change in cost and unavailability of goods, pricing of products must be adjusted more frequently. Again, taking into account numerous factors, the application of AI technologies can inform a more effective pricing strategy. AI applications can quickly and effectively analyze all contributing variables, such as seasonality, competitor pricing, promotions, customer demand, etc., building up a clear picture of pricing history and trends, to inform recommendations regarding which products should be sold at which price to maximize revenues.
Maximizing yield
The ability to maximize yield is yet another area where AI can make a world of difference. Internet of Things (IoT) devices in combination with machine learning are optimizing machine settings to maximize yield. For example, manufacturers can ask how to maximize yield considering the quality of ingredients and the process conditions. Taking into account an almost inordinate number of process parameters, it is possible for manufacturers to use AI to maximize the output of processes at every step of the way. A European cheese maker applied AI to automate milk yield calculations to ensure consistency and reduce waste, saving €500,000 annually for every 1% increase in yield.
Mitigating against unpredictability
Over the past two years in particular, the unpredictability of food supply chains has had a massive impact on food and beverage manufacturing. Although a modern, cloud-based ERP can give you real-time visibility across the supply chain, this is another area where AI can hold the key to unlocking new, better ways of working. For example, the right AI tools can predict sea vessel arrival times, helping manufacturers to more accurately forecast when their raw ingredients will be arriving. It is the level of detail that AI brings that makes all the difference – instilling an even greater level of accuracy when it comes to scheduling production to optimize operations and maximize productivity.
Sustainability
The issue of sustainability is another area where AI is having a positive impact on food and beverage manufacturing. Businesses can use the insight generated by AI applications to minimize energy and water usage, ensuring the most energy-efficient production, alongside waste reduction, at all potential touch points in the manufacturing process. Innovative businesses are also taking quality information, in combination with ingredient shelf-life data, using AI to determine dynamic best before dates. AI answers the question of ‘Can we extend the shelf life safely considering the quality at hand?’, which ultimately prolongs the sellable life of a product, reducing waste and increasing revenue.
Leverage AI & ML for increased profitability
AI is all about connecting the dots, making the most of the huge amounts of data generated by the food and beverage sector and using AI technologies to analyze this data and gain a better understanding of the many and complex variables at play within the industry. As more businesses invest in AI technologies, suppliers can create more out-of-the box AI solutions. The learnings and experiences of food and beverage manufacturers inform AI templates that can then be applied to similar businesses, delivering the insight needed to maximize efficiencies and boost revenue.
