From instinct to intelligence: why the future of food and beverage demand planning is AI-driven

The food and beverage (F&B) industry has long relied on historical sales data, seasonal trends, and gut instinct to forecast demand and set prices. While this approach has worked well in stable conditions, today’s market is anything but predictable. Fast-changing consumer behaviors, inflationary pressures, and ongoing supply chain disruptions are putting tried-and-tested planning and pricing models to the test.  

Companies still relying on traditional methods increasingly find themselves at a disadvantage. They run a higher risk of stockouts, overproduction, and inefficient pricing strategies. In turn, this leads to lost revenue, excess waste, and misalignment with consumer demand, threatening continued success.

To thrive in turbulent times, F&B needs a higher level of planning and forecasting. Artificial intelligence (AI) has emerged as one of the most promising tools for driving that evolution.

Demand planning enters a new era

Instead of relying on static forecasts, informed by historical data, AI enables a more dynamic, real-time approach to demand planning. It does this in three key ways:

1. More data. AI models process and integrate data from multiple sources, going beyond internal sales data to incorporate external information including social media sentiment, macroeconomic indicators, and competitor pricing.
2. Better forecasting. AI automation speeds up traditional methods, drastically reducing data analysis and model adjustment time. Machine learning models can also consider real-time factors, such as weather, local events, and competitor activity, to anticipate demand shifts.
3. Greater accuracy. AI and machine learning algorithms enhance accuracy by uncovering complex patterns in vast data sets, which traditional methods don’t always pick up.

For commercial front office teams - including sales, marketing, and revenue management - AI replaces guesswork with data-driven precision, leading to smarter decision-making, higher profitability, and better customer satisfaction.

But AI isn’t a magic bullet

Over the years, F&B firms have invested plenty of time, expense, and effort into technology transformation. But all too often, these projects fail to deliver the expected results. Companies will find that AI is no exception to this trend. While AI has the potential to deliver game-changing capabilities for demand planning, organizations will need to overcome several obstacles before they can realize these benefits.

One of the biggest challenges is the presence of data silos and outdated systems, making it difficult to aggregate and analyze information effectively. Additionally, companies may encounter organizational resistance, as teams accustomed to traditional methods may be hesitant to trust AI-driven recommendations.

Besides these internal hurdles, AI-powered pricing strategies must be carefully balanced with consumer expectations and retailer relationships. Rapid or frequent price adjustments could lead to friction with distributors and retail partners, while overly aggressive pricing tactics might alienate loyal customers. Successful AI adoption requires a thoughtful, strategic approach that ensures alignment across all stakeholders.

How can F&B companies successfully integrate AI?

To leverage AI for sharper demand planning, organizations must take a structured approach that combines technology with strategic execution. At Baringa, we’ve been helping companies in F&B and beyond to strike that balance by focusing on four core areas:

1. Breaking down data silos. Any AI outputs are only as good as the data used to inform them. We assist in unifying fragmented data – from point-of-sale (POS) systems, CRM platforms, supply chain portals, and external sources – and getting it into a consistent format for use in a centralized AI platform.
2. Picking the right use cases. There’s a lot of hype around AI, so proving its technical feasibility and business value will be vital to gaining buy-in. We help F&B firms identify and prioritise their most promising use cases, develop and test minimum viable products, and scale AI initiatives across the business.
3. Upskilling people. To make the most of AI, companies need skilled people who are comfortable working with and alongside advanced technologies. We support clients in bringing in new talent, as well as cross- and up-skilling existing employees.
4. Ensuring retail and consumer alignment. Pricing is a delicate balancing act that must align with customer needs while maximizing profitability. Applying AI and other optimization techniques, we help companies develop pricing strategies that balance revenue optimization with retailer and consumer expectations.
5. Establish clear ownership and governance: AI adoption often stalls with ambiguity around who leads. We help organizations define clear ownership models and governance structures that align stakeholders, accelerate decision-making, and prevent siloed efforts - in service of enterprise value. This includes ensuring all functions (including IT) are engaged early as a single strategic team - enabling scalable, secure, and integrated AI solutions that are built to last.

Transform today to be ready for the future

There’s real value to be captured from AI, but F&B companies must act fast, before these capabilities become table stakes. Organizations that make it a priority to embrace AI-driven demand forecasting stand to gain significant competitive advantage, driving revenue growth, improving customer satisfaction, and remaining relevant in a rapidly evolving F&B landscape.

If you’re ready to move demand planning from prediction to AI-powered precision, Baringa can help you realise full value faster. Get in touch with us today to learn more.