How can food and beverage companies transform their thinking about GenAI – from a tool at the fringes to the foundation for growth?

When disruption strikes, is your business primed to pivot or poised to plummet? The COVID pandemic laid bare a critical readiness gap that has been growing in food and beverage (F&B) for generations. Faced with unprecedented headwinds from supply chain shortages, store closures, and consumer behavior shifts, many organizations struggled to adapt, experiencing a fall in sales and revenues that some never recovered from.

At the same time, we saw how crisis can be the catalyst for revolutionary change. During the pandemic, digital transformation became an urgent means of survival for all businesses – and an engine of extraordinary growth for some.

This was demonstrated by select ‘Covid winners’ who had the resources and flexibility to move quickly when crisis struck. As an example, McDonald's was quick to react and invest, doubling down on what it calls the ‘3 Ds’ – delivery, drive-thru, and digital – to recover and sustain sales during the pandemic.

Although the Covid crisis is now behind us, disruption remains a constant threat to businesses. Amid a shifting U.S. policy landscape, persistent geopolitical instability, and trade policy changes, F&B companies should expect to experience continued turbulence at an increasing pace. This all demands greater agility and resilience than traditional F&B business models are built for.

Attention must shift from reaction to reinvention, with all eyes focused on finding F&B’s next wave of growth.

Enter GenAI

Generative AI (GenAI) has proven to consumers and business leaders that it is here to stay. Not only is it poised to unlock new frontiers of productivity, but it also promises to transform customer interactions and experiences to drive significant growth. By some estimates, the size of the AI in retail market could grow to $85 billion by 2032 – an increase of more than 80% on where it stands today.

Eager to seize their piece of GenAI’s huge potential, many companies have started testing use cases and piloting small-to-mid-scale implementations in different pockets of their operations. Yet few, if any, F&B organizations have been able to make significant progress. 

Instead, many companies find themselves paralyzed by perfectionism, obsessing over data quality and precision. They’re asking the question, “What is good?” when they should be asking, “What is good enough?”

This narrow focus misses the forest for the trees. Success with GenAI requires more than deployment of fun and interesting use cases. It demands thoughtful recalibration of an organization’s strategy, operating model, and culture to one that can center around AI and unlock the next wave of growth.

Realizing AI’s full value, faster

For F&B companies, the strategic imperative is clear – they must evolve from viewing AI as a “cool gadget” to an industry disruption that requires an entire new way of operating and new set of organizational capabilities. We see leading organizations already making this shift by adopting three key mindsets:

1. Accelerate change. Leaders are moving beyond "innovation theater" toward embedding AI into their operational DNA by actively re- and up-skilling their teams and looking outside their four walls for help. This requires serious re-investment in change management after decades of efficiency focus and zero-based budgeting have hollowed it out of many F&B businesses.
2. Think across the value chain. Isolated AI initiatives deliver only fragmented value. By focusing on consumer-centric, cross-function applications of AI, companies can break down consumer products and retail’s silo mentality that has historically limited innovation impact. This cross-functional approach also ensures cohesive implementation that amplifies return on investment.
3. Practice progress over perfection. Chasing the impossible task of building the perfect data model will only hamper progress. Unlocking rapid value from AI means taking advantage of the data you have today – structured or unstructured – and building a strategic ecosystem of AI platform partners to accelerate implementation.
4. Embrace your ecosystem. F&B companies should leverage an ecosystem of specialized AI partners to access proven solutions, fill capability gaps, and accelerate innovation rather than building capabilities entirely in-house. This approach increases speed-to-value on industry-specific AI applications while reducing risk and allowing internal teams to focus on core business strategy rather than becoming AI experts overnight.

Be ready to ride the wave

Tomorrow’s winners are already taking the initiative with GenAI and building the change capabilities, value-centric mindset, and partner ecosystem they need to harness it effectively. In so doing, not only are they protecting existing revenues and market share – they’re positioning themselves for significant growth.

This is not a moment where F&B companies can afford to wait and see. The next wave of AI-driven growth is already rising. Those that are not prioritizing the change efforts around AI may miss the wave, or even be engulfed by it, as better-prepared competitors use the momentum to surge ahead. 

To learn more about how Baringa can help you reshape your strategy and operations to make the most of the AI growth opportunity, get in touch with us today.