The CEO of Nike recently blamed his company’s shortage of bold and disruptive innovation on the shift to remote working following Covid. Food and drink companies have a similar innovation problem.
Mintel’s Global New Products Database (GNPD) shows that in 2019, 21% of UK food and drink launches were ‘new products’ – i.e. genuine innovation. However, this has steadily fallen since the pandemic and is just 15% as of Q1 2024. Over the same period, renovation – new packaging, line extensions or product reformulations – has increased from 79% to 85%.
Does this matter? Mintel consumer data shows it does: 38% of adults look for new foods or flavours to try most or all of the time. This rises to almost half of gen Z (16 to 24-year-olds). So there is real consumer demand for exciting innovation.
The rapid advances in AI give food and drink brands a new tool to create much more disruptive innovation, at a fraction of the cost and time. This new technology can help companies innovate in various ways, from new ingredient development to creating new categories or simply accelerating the innovation cycle.
The Dublin-based biotech company Nuritas has used AI to identify a new ingredient called PeptiStrong, derived from fava beans, which optimises muscle health. The company estimates it would have taken 1,000 years to identify the new ingredient using traditional methods.
It’s just one example of how AI is drastically shortening the time it takes to go from concept to launch. See Chilean startup NotCo, which created and launched its new plant-based NotMilk Chocolate drink in just five months – a timescale that would have been thought impossible a few years ago.
Bigger brands will naturally be slower to integrate AI into their R&D operations, so they need to ensure they’re not out-innovated by tech-savvy startups. AI provides new companies with lower barriers to entry, as smaller teams can be augmented by algorithms, without the need for large marketing and R&D departments.
Some established brands are heeding the old adage of ’if you can’t beat ‘em, join ‘em’. Kraft Heinz collaborated with NotCo to create and launch its NotCheese brand in the US, for example. The innovation took eight months, when just a few years ago this would have taken at least two years.
Plus, big brands have some benefits over their smaller counterparts when capitalising on the power of AI. Heritage brands are sitting on a wealth of proprietary historical data, and they can utilise AI to harness this data to produce disruptive products much faster.
In the era of AI, that quality data will be a crucial competitive advantage.
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