Unleashing the Power of AI in FMCG Product Development

We all know that AI is transforming businesses globally and proving vital for time-saving and efficiency. It’s been branded by many as the “best assistant” you’ll have. But how can we explore the uses of AI beyond administrative support, and collaborate with the tool to design, challenge, and create?

AI brings huge opportunities for the FMCG sector, completely reimagining the way businesses have been operating for decades. We’ve outlined below some of the key considerations:

In the FMCG sector specifically, AI can help brands understand their consumers better by analysing data from various sources, such as social media, online reviews, surveys, and loyalty programmes. AI can also generate insights into consumer preferences, behaviour, and sentiment, which can help brands tailor their products and services to meet their needs and expectations.

This was the case for Waitrose’s 26-dish Japan Menyū range, launched in September last year, after AI tools detected a 15% increase in social media conversations related to Japanese cuisine. They even picked out yuzu and ponzu as particular flavours of interest to consumers – insight gold for the retailer.

Not only does AI help businesses and brands better understand their audiences, but it can fast forward the typically lengthy timelines on NPD development by crunching massive amounts of data and predicting upcoming trends. Product development teams can see these trends in real-time, helping them to react quicker, and putting them in the strongest position to launch a new product successfully.

AI is also proving instrumental in consumer testing, with Nestlé trialling the use of ‘emotional AI’ in its taste tests. This essentially monitors (human) testers on camera to gauge what they’re really feeling about a product and whether the feedback they’re writing down matches their facial expressions.

Beyond product development itself, AI can help brands optimise their PR strategies by creating engaging and personalised content, such as ads, videos, blogs, and social media posts, that resonate with their target audiences.

One example of this came a couple of years ago when AI generated the tagline “The time is now” for Dixons Carphone’s Black Friday sale campaign. The business had been toying with various slogans, but each of these had explicitly mentioned Black Friday. AI brought a new approach into the mix, which landed well with shoppers who had been experiencing Black Friday fatigue.

AI can also help brands measure the effectiveness of their campaigns, by tracking metrics such as reach, engagement, conversion, and retention.

More broadly, it can monitor and manage brands’ online reputation, respond to customer feedback and complaints, and identify and mitigate potential crises, as well as analysing the sentiment and tone of online conversations about their products and services, alerting them to any negative or harmful comments.

By using AI to create better products, reach more customers, and improve their PR strategies, FMCG brands can build trust and loyalty with their consumers, and achieve long-term growth and success. However, to fully realise this success, what are the challenges businesses must first navigate?

One of the challenges of AI in FMCG is data quality and availability. AI relies on large amounts of data to learn and improve, but not all data is reliable, accurate, or relevant. FMCG brands need to ensure that they have access to high-quality data sources, that are consistent, updated, and representative of their consumers and markets. They also need to ensure that they comply with data privacy and security regulations and respect the rights and preferences of their customers.

AI can have a significant impact on society and the environment, both positively and negatively. FMCG brands need to ensure that they use AI in a responsible and ethical manner, which aligns with their values and mission. They also need to be transparent and accountable for their AI decisions and actions, and communicate them clearly to their customers and stakeholders. At the same time, considering the potential risks and consequences of AI, such as bias, discrimination, or harm, and taking measures to prevent or mitigate them.

While we can see that AI has the ability to augment human capabilities and creativity, we must remember that it cannot replace them. Brands need to ensure that they balance the use of AI with human input and oversight and foster a culture of trust and cooperation between humans and machines.

Coca-Cola’s Y3000 was the first beverage flavour co-created with human and artificial intelligence. The business knew that while the data gleaned by AI was valuable, the human insight they could gain directly from customers could not be overlooked.

To drive this successful collaboration, businesses therefore need to ensure that they provide adequate training and support for their employees, customers, and partners, to help them adapt to the changing role of AI in their work and lives.

AI is a powerful tool that can help FMCG brands enhance their performance and competitiveness in the market, but it also comes with some challenges that need to be addressed. By acknowledging and addressing these challenges, brands can leverage the full potential of AI, while ensuring that they use it in a responsible and ethical way.

This blog was authored by Claire Robinson and Emma Nelson. You can read more about the ways in which businesses can use AI to creative advantage in Grayling’s newly launched 2024 Trends Report.