AI Leads Tech Transformation in Natural Foods
This article first appeared in Presence Marketing’s August 2023 newsletter.
By Steven Hoffman
While 2023 may not be the year the singularity took place, with the launch of the first user-friendly artificial intelligence (AI) chat bot, ChatGPT, it could well go down in history as the Year of AI.*
From regenerative organic agriculture and nutrition research to product development, marketing, distribution and retail operations, business leaders in the natural channel are already finding multiple uses for this nascent yet transformative technology. A growing number of natural and organic products companies are taking the lead in employing AI automation, and such uses across the supply chain are growing as exponentially as the technology upon which it is based.
For the grocery industry, AI is projected to generate $113 billion in operational efficiency and new revenue by 2025. In a June 2023 study by data analytics firm Grocery Doppio, conducted in partnership with FMI – The Food Industry Association, and based on interviews with 152 grocery executives, implementation of artificial intelligence in supermarkets is expected to grow by 400% by the end of 2024. In addition AI “could eliminate 18% of store associate positions, 73% of store tasks and 53% of shopper queries,” reported Winsight Grocery Business.
AI adoption will deliver $113 billion in operational efficiency and new revenue opportunities for the grocery industry by 2025. Source: The Times They Are A-Changing: Impact of AI in Grocery. Source: Grocery Doppio
According to Grocery Doppio’s findings, inventory management savings could account for more than half of the estimated $113 billion in value. AI also will help grocers save billions in merchandising costs through advancements in product assortment and pricing optimization. Other savings include marketing, store operation costs, and IT technology.
While AI is not necessarily a new area for the grocery industry, grocers are focusing more on the “responsible, ethical use” of artificial intelligence,” said Mark Baum of FMI in a July 13th, 2023, Grocery Dive report. One quarter of retailers and more than a third of suppliers are using artificial intelligence (AI) to track product preferences and spending to anticipate consumer wants and needs, according to FMI’s 74th annual survey, The Food Retailing Industry Speaks 2023. “Every CEO needs to at least think like a CIO, if not act like a CIO, going forward. We’d like to say these days if you’re not technology enabled, you’re competitively disadvantaged,” Baum said.
Yet, a major concern among grocery and other workers is that AI could automate or partially automate up to 300 million jobs over the next decade, according to a study by Goldman Sachs. The industries most impacted by AI-driven automation will be “office and administrative support” and “legal.” However, according to Goldman Sach’s findings, “Once AI is implemented, workers will be more productive leading to an overall increase in output. This could lead to a 7% increase in annual GDP, equivalent to an astounding $7 trillion.”
Read on to learn how some early adopters in the natural and organic products industry are making innovative use of AI technology.
Research and Product Development
Dietary supplement companies have been utilizing AI to speed up the research of nutritional compounds. Companies like Brightseed employ machine learning to develop bio-active phytonutrient compounds to support gut health. Supplement maker Nuritas, recipient of Nutrition Business Journal’s 2023 Science and Innovation Award, employs artificial intelligence to identify “novel health-benefitting ingredients” and “the best plant-sourced, cell-signaling peptides,” said Nuritas founder Nora Khaldi.
In a July 2023 podcast, The Natural List, Aadit Patel, VP of Product Engineering at NotCo, a plant-based food technology company, shared how it uses AI and “the right balance of technology and humanity” to bring novel plant-based meat and dairy alternatives to market.
In related news, researchers at Northeastern University have developed an AI algorithm, FoodProX, that can predict the level of processing in food products and if a food has been “ultra-processed.” Such information is important for researchers in examining the health impacts of processed foods, Neuroscience News reported in June 2023.
Marketing
In an in-depth interview in Strategy Magazine, Arjan Stephens, President of leading organic food manufacturer Nature’s Path, shared that AI helps the company deal with inflation and competition by creating more targeted messaging in a quicker timeframe.
“The aim is to educate consumers on our commitment to fueling healthy communities as well as the inherent value of supporting and investing in a triple bottom line business like ours. A.I. has been a huge part of driving efficiencies in getting more strategic content to market more quickly. It not only enables us to swiftly create and distribute content, but to also respond more efficiently to consumer feedback and shopping behavior changes. This will continue to be critical to competing in a market that is oversaturated in greenwashing and misinformation,” Stephens said.
Distribution
Distributors, in particular, are looking to AI – and even AI-powered robots – to optimize supply chain and transportation logistics. Leading natural foods distributor UNFI in June 2023 announced a partnership with Finnish firm RELEX Solutions. Driven by AI and machine learning, RELEX will work with UNFI to consolidate and replace multiple UNFI buying systems into “one enhanced process, combining a more robust analysis of demand with a more granular approach to procurement,” UNFI said in a statement.
UNFI’s new AI platform is expected to become operational over the next 12 to 18 months. “As part of UNFI’s multi-faceted transformation agenda, we’re continuing to implement cutting-edge technology to improve the customer and supplier experience, while increasing operating efficiency,” said Erin Horvath, Chief Operating Officer at UNFI. In March 2023, UNFI announced that it would utilize robots powered by artificial intelligence and software automation and new scanning technology at its distribution center in Centralia, Washington.
Grocery wholesale cooperative Associated Food Stores (AFS) also plans to deploy robotics and AI-powered automation technology at is distribution center in Farr West, Utah, according to a May 9th, 2023, report in Winsight Grocery Business. Working with technology company Symbotic, AFS’s end-to-end automation system will include robotic case-pick capabilities “to enhance a range of retail-facing experiences,” including supply, expanded assortment and product delivery to stores.
Seeking to disrupt the traditional natural products distribution sector, Pod Foods claims it offers the first truly “infinite” warehouse for food procurement in the industry while providing retailers with data-driven, relevant access. The engine is powered by the company’s “Pod Bytes” data platform, which synthesizes data from its B2B marketplace, economic indicators, and other grocery-adjacent and third-party sources, the company said. The built-for-grocery models provide retailers with personalized, AI-enabled insights across all areas of discovery, including product placement, procurement, inventory optimization and market opportunity. The result is access to an endless yet personalized assortment of products, targeted to each retailer based on consumer purchasing behavior, desired retail margins, local trends, and more, the company says. Pod Foods in April 2023 appointed former VP executive and CPG veteran Michael Schall as President.
Retail
At The Fresh Market, which operates 160 stores in 22 states, longtime marketing partner Firework is implementing a patent-pending artificial intelligence platform to enhance The Fresh Market’s video content for consumers. The technology will allow shoppers to ask questions and receive sophisticated, real-time answers in The Fresh Market’s in-video chat feature. Viewers will be able to ask such questions as, “What is the recipe for the salad being made in this video?” and the AI chatbot will list the ingredients.
“The new AI engine makes use of a large language model (LLM), can understand and respond in a wide range of languages, and can be customized to reflect each brand’s unique voice,” The Fresh Market said in a statement. The new technology will be available on The Fresh Market’s website and its shoppable video live commerce retail media network. “Our customers are looking to engage with our brand in real time, both online and in store. With Firework’s generative AI technology, we can be certain that customers will receive prompt, friendly and personalized support whenever they choose to engage with our video commerce content,” said Kevin Miller, CMO at The Fresh Market.
Shoppers at Sprouts Farmers Market can now use an AI-based shopping assistant called Quin. The phone-based app from New York-based developer Verneek can answer spoken or typed questions about items sold in the stores and provide information about recipes, keto-friendly options, nutritional value and more. “As technology continues to evolve, Sprouts is always exploring new and innovative ways to improve our customer experience while providing joy in healthy living,” Sprouts said in a statement. Nasrin Mostafazadeh, Cofounder of Quin, said in ArcaMarx Magazine in April 2023 that the timing was right to launch Quin in grocery stores. However, he noted, Quin is not intended to replace grocery workers but to supplement them, giving them more time to focus on their job responsibilities, such as stocking shelves, doing inventory or checking out customers.
On THRIVE Market’s blog, the online retailer helps customers evaluate the best AI recipe generators. “There are now lots of websites that use AI machine learning to populate recipes based on ingredients, dietary restrictions, and even cooking skill level,” wrote THRIVE blogger Amy Roberts. “Some create a recipe based on ingredients you have on hand, while others churn out a recipe based on a query, like ‘Make a gluten-free chicken parmesan.’” Roberts reviewed ChatGPT for a vegan cheesecake recipe, Let’s Foodie for a red cabbage slaw, and PlantJammer for lasagna. “Did it work?” Roberts asked. “Surprisingly yes! The cheesecakes were a hit!” Though, Roberts admits she continues to refer to Pinterest for her own recipe ideas.
Using an organic food store as an example, AI platform Business Name Generator cites the following case study: “Consider the case of a budding entrepreneur, John, who planned to start an organic food store. He wanted a name that conveyed freshness, health, and sustainability. After struggling with brainstorming sessions, he turned to an online business name generator. He entered keywords such as ‘organic,’ ‘fresh,’ ‘healthy’ and ‘green.’ In seconds, the tool provided him with a list of potential names like ‘Freshly Organic,’ ‘Green Harvest,’ “Healthful Bounty’ and ‘SustainaBite.’ John was able to choose a unique and meaningful name for his store.”
Agriculture
For regenerative and organic farmers, AI technologies including machine learning and data analytics are being used to develop sophisticated monitoring systems that can provide farmers with real-time information about factors that affect soil health, including nutrient deficiencies and moisture levels. Combined with the use of sensors, drones and satellite imagery, AI algorithms are being used to analyze massive amounts of data to determine the optimal amount of water needed for each crop, reducing water waste, and ensuring that plants receive necessary nutrients for healthy growth. This not only conserves water resources but also helps to prevent soil degradation caused by overwatering, reported Marcin Frackiewicz in TS2 in May 2023.
At the University of California Davis, the AI Institute for Next Generation Food Systems (AIFS), funded in part by USDA, was launched in 2020 with a mission of meeting growing demand in the food supply by increasing efficiencies using AI and “bioinformatics” spanning the entire system from seed to shelf. Bringing more than 40 researchers together, AIFS says it aims to “bring artificial intelligence technology to the entire food system from crop breeding and farming to food production and nutrition. The institute will combine the development of the latest breakthroughs in artificial intelligence with preparing the food and agriculture industries to rapidly adopt them and ready the workforce.”
In addition, leading technology companies including IBM, Microsoft, Intel and others are focusing on developing artificial intelligence for use in agriculture and food production. Microsoft’s Project FarmVibes seeks to foster sustainable agriculture by collecting and analyzing data in from drones, sensors and other equipment to help farmers make real-time decisions about their crops. Intel and the National Science Foundation in 2022 invested $220 million in a number of AI ventures, including research in AI-Driven Innovation in Agriculture and Food Systems. Focusing on regenerative agriculture, IBM in 2022 launched IBM Regenerative Agriculture, which uses AI, data analytics, cloud technology and predictive insights to interpret agricultural and weather data and help farmers make decisions about crops.
“The food chain is a complex ecosystem that touches our everyday lives, and this is where AI has an advantage – by navigating the complex web of information, from farming to food distribution,” said Bryton Shang, CEO of Aquabyte in Forbes in July 2023. “It can help ensure higher-quality decision-making every step of the way.”
* Written and researched by a real human, with 40+ years’ experience in natural and organic foods and sustainable agriculture.
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media, and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We are for Better Alternatives. Contact steve@compassnaturalmarketing.com.