AI on the Menu: 5 Ways Tech Will Transform the Food and Beverage Industry

The food and beverage industry isn’t the first to come to mind when discussing the impacts of AI and emerging technologies. Still, the sector stands to benefit tremendously from advanced automation and decision-support tools.

?It’s actually a great example of all the non-tech industries that will be turned upside down by AI. This sector has a lot going for it in terms of demand — people will always need to eat — and it’s also facing unique challenges in terms of labor and rising costs of food products and overhead expenses.

Recognizing the opportunity for technology to make a massive impact in this sector, Cape Fear Ventures invested in Ohanafy early on. It was clear to us that the company’s AI-powered CRM and Sales Platform, custom-built for the food and beverage industry, is the comprehensive solution that many companies in this sector seek.

AI is changing the recipe for success, and here are five ways that it will help food and beverage producers, distributors, and retailers maximize profits in the years to come.

Inventory Management and Supply Chain Optimization

Profitability is closely linked to cost control, and this is particularly true in the food and beverage industry, which depends heavily on fresh, perishable food products. Even in ideal conditions, it can be difficult for food and beverage suppliers and retailers to effectively manage their inventories.

Restaurants, for example, waste an average of 4-10% of the food they procure before it reaches their customers. This amounts to approximately $162 billion lost in food waste annually.

The consequences of poor inventory management, including unnecessary stock-outs and unhappy customers, also negatively impact top-line revenue. Accurate demand forecasting is clearly one of the keys to profitability in this sector. This skill remains elusive for many — and AI is here to help.

AI algorithms can be trained to analyze sales data and trends from previous years and predict future sales. While an algorithm can’t replace years of experience forecasting demand for a specific business or market, it can help someone with that experience make better, evidence-based decisions faster.

They can then focus more time on other pressing demands, such as quality control and customer experience. Ordering can even be entirely automated for staple supplies that require constant replenishment.

Technology can provide additional benefits to wholesalers and suppliers. Ohanafy, for example, offers lot tracking to improve traceability from receipt to shipment, warehouse tracking to monitor inventory levels, bin tracing to boost efficiency, and inventory analytics and reporting to provide real-time insights into inventory levels.

These tasks are time-consuming, and they can be negatively impacted by even a minor oversight or error. The businesses that find ways to incorporate AI support into their operations will benefit tremendously and have more bandwidth to develop new products and services that separate them from their competitors.

Maximized Sales and Revenue

While the food and beverage industry has several unique needs, these companies still have basic business requirements—such as the ability to price their products to maximize sales and revenue.

Many of the leading customer relationship management (CRM) tools for the food and beverage industry include tools to help these businesses make data-based pricing decisions. Different systems allow for a wide range of functionality, including calculating which products generate the largest margins, benchmarking prices against competitors, and even assisting with designing loyalty programs that maximize purchases.

Dynamic pricing models are another potential profit-boosting benefit of AI-enabled technologies. Given the hyper-competitive nature of most food and beverage markets, pricing is extremely difficult. Companies must proactively price in market variables before adversely affecting demand and losing customers.

Purpose-built CRM tools can help these businesses make more informed pricing decisions by factoring in evolving costs such as competitor pricing, seasonal demand, and inventory levels. While AI can’t make pricing decisions for business owners, it can help make these challenging decisions much more straightforward.

Operational Efficiency

Food and beverage companies are notorious for being all-consuming enterprises for business owners. Successful entrepreneurs in this field keep their hands on every aspect of the business and excel at wearing multiple hats, particularly in the early stages. On any given day, they may handle a wide range of operational responsibilities, including order management, employee hiring and shift management, facility maintenance, and more.

AI eases the operational burden on business owners by recommending optimizations based on historical data. In addition to the automated ordering functionality mentioned earlier, AI is being used to deliver labor management solutions. Customized forecasts based on previous labor requirements help business owners optimize staffing levels. By relying on historical data, business leaders have a much better chance of being staffed up for peak demand without risking too much downtime for periods of lower demand.

Scaling is a primary challenge for any successful business, and one of the often-underappreciated benefits of AI is that it is inherently scalable. Most of the popular platforms available to food and beverage industry companies are delivered through a SaaS model. They can grow with your enterprise as it expands to new product offerings and new locations. These tools can also give business leaders insights into their company’s performance across all locations, which helps them better understand how to allocate resources to drive growth.

Quality Control (QC) and Food Safety

QC and food safety is paramount for businesses at all levels of the food and beverage industry supply chain: wholesalers, suppliers, and retailers. Several AI-powered food and beverage industry tools offer features designed to maximize food safety.

Two of the most important benefits of these tools are traceability and incoming supply tracking. Business leaders can track their incoming inventory through the supply chain, to the warehouse, and down to the lot level in some cases. This functionality is incredibly important in the event of a supplier recall, as potentially tainted items can be easily located and removed from the supply chain.

Some platforms even offer the functionality to actively monitor storage conditions and notify designated staff of expired products or low inventory levels.

Putting QC on autopilot can take a great burden off of business owners’ shoulders.

Hyper-personalization and Improved Customer Experiences

Leading CRM products incorporating AI into their platforms offer food and beverage companies many benefits. These CRM tools help businesses capture, analyze, and leverage customer data to improve their products and services. For restaurants, for example, the software can store crucial information such as contact details, order preferences, allergies, online and in-person order histories, favorite products, and even seating preferences in a single resource.

For distributors and suppliers, AI-powered tools such as Ohanafy can help nurture and strengthen customer relationships by providing a 360-degree view of activities, including purchase patterns and visit or order frequency. Ohanafy can also track customer communications and delegate tasks for team members.

Now Is the Time to Evolve

Most successful businesses in the food and beverage industry need to be more balanced, and there is no better force multiplier than AI and automation. Feel free to contact me if you’re thinking your way through your first technology investment or if you’re an investor looking to deploy capital in this space.

I’m the founder and managing partner of Cape Fear Ventures , and we’re always looking for new partners who are ready to invest in the economy of the future.