Applications of AI in the consumer goods sector

McDonald’s faces several challenges, such as the complexity of operations and customer experience, prompting the need for technological advancement. In December 2023, McDonald’s and Google Cloud entered a strategic partnership to integrate cloud technology and generative AI solutions across McDonald’s restaurants globally. The partnership uses advanced AI algorithms to alter McDonald’s processes, from inventory management to cooking procedures. The technology’s ability to analyze and interpret diverse data sets enables McDonald’s to produce data-driven decisions for improving the freshness and temperature of its food products.   

Applying generative AI will improve traditional restaurant management methods, such as training and development, and help to create a well-defined management structure, providing recommendations and streamlining services. LLMs, powered by Google Cloud technology, were trained with McDonald’s datasets to gain insights into equipment and staff performance, which will help reduce business disruptions and ensure a high-quality service within dining establishments. Applications of generative AI can optimize supply chain logistics, predict demand patterns, and refine cooking processes. The technology also interprets data to generate personalized and efficient solutions for McDonald’s restaurants worldwide.  

This partnership will address the issue in traditional restaurant management by introducing a more intelligent and data-driven approach. As a result, McDonald’s can expect improved operational efficiency, reduced waste, and enhanced food quality, leading to a better overall customer experience. However, as of June 2024, McDonald’s is removing AI-powered ordering technology from its drive-thru restaurants in the US, after consumers shared its comical mishaps online. In one video, which had 30,000 views on TikTok, a young woman becomes increasingly irritated as she attempts to convince the AI that she wants a caramel ice cream, only for it to add multiple stacks of butter to her order. Similarly, with 360,000 views, a person claims that her order got confused with one being made by someone else, resulting in nine incorrect orders added to her bill.

In September 2023, Coca-Cola used AI to produce a new drink. This AI-powered beverage, known as Coca-Cola Y3000 was created by Coca-Cola Creations—a platform designed to introduce a range of limited-edition products inspired by various trends and collaborations.  

Coca-Cola Creations uses AI algorithms to analyze datasets of flavor profiles, consumer preferences, and market trends. This technology enables Coca-Cola to produce novel drinks that cater to evolving consumer tastes and preferences. Instead of relying solely on human sensory experts and market research, AI algorithms autonomously analyze a wealth of data to create beverages that are more likely to resonate with consumers.  

Coca-Cola can make data-driven decisions about flavor profiles, ensuring that new products align with consumer preferences and reducing the risk of product failure. Coca-Cola claims that its AI-powered beverage creation will reform the industry by changing the way new flavors are processed. However, Coca-Cola’s new beverage received mixed reviews from consumers. While some consumers appreciated the involvement of AI and found the taste unique, others found the taste perplexing, citing a “medicinal aftertaste.” Ultimately, however, Coca-Cola’s Y3000 flavor is a demonstration of the ever-evolving role of AI in the food and beverage industry.  

Using AI shortens the time required to develop and launch new products, allowing Coca-Cola to swiftly respond to consumer trends promptly. AI’s ability to generate unique flavor combinations opens creative possibilities that may not have been explored by human experts alone, leading to exciting beverage offerings. Furthermore, by streamlining the R&D process and minimizing the need for extensive sensory testing, AI-driven beverage development can lead to cost savings for the business. Consequently, Coca-Cola is likely to introduce a range of AI-generated beverages, catering to diverse tastes and preferences.

In August 2024, US-based immersive consumer insights company QualSights introduced patented, cloud-connected sensors called ‘Smart Tags’. These Smart Tags aim to autonomously track product usage with high precision and provide deeper consumer insights, offering an alternative to human recall.  

Smart Tags are compact, lightweight sensors that can be easily shipped, set up, and attached to a wide range of products, from household goods to medical devices. They operate through a cloud-based platform that autonomously collects data on product usage. The cloud-based system integrates QualSights’ AI-powered platform, which offers brands real-time insights into product usage behavior. The smart tags can capture real-time data, videos, and photos from consumers during product interaction, thereby providing deeper insights into customer preferences. For example, Smart Tags track the frequency and duration of products by capturing real-time videos each time the product is in use. The data will be available for companies to assess through QualSights’ app, providing companies with valuable insights into consumer behavior.  

Smart Tags could address the evolving demand for more reliable, detailed, and precise consumer insights. With their ability to capture and analyze product usage data in real-time, Smart Tags allow brands to improve product launch and marketing strategies across various industries. However, the technology could compete with other passive data collection tools like Google Cloud’s Retail Data Engine and Salesforce’s Retail Cloud Integration. With companies increasingly relying on precise consumer data to inform product development and marketing strategies, QualSights’ real-time data collection, analysis, and context-rich data could broaden its application and market reach.

In July 2023, UK-based alcoholic beverages company Diageo developed an AI tool that could change brand packaging through generative AI technology. Diageo’s AI tool provides AI-driven capabilities to enhance efficiency and creativity in the packaging process.  

The AI tool uses generative AI algorithms to analyze and generate design options for brand packaging. This automates and optimizes the packaging design process, reducing manual labor and associated costs. The tool also analyzes consumer preferences, market trends, and brand identity to offer insights. It can create an array of design concepts, considering different factors such as color schemes, typography, and visual elements. This enables Diageo to test countless design possibilities, confirming that each iteration is unique and tailored to the specific brand’s essence.   

Diageo will refine and expand the use of AI in various aspects of its business, potentially extending AI-driven innovations to other areas beyond packaging. The AI tool removes the issues associated with manual packaging design processes, such as high cost and time-consuming iterations. It introduces automation and efficiency.  

For example, Codec AI’s algorithm—an AI platform for marketing—helped Diageo capture, classify, and organize millions of consumer content, such as social media trends, and media profiles, into groups of shared interests, values, and behaviors. This enabled Diageo to maintain its relevancy in the market and meet consumer demands, and its audiences were actively engaged.