Due to the rise of the millennial population as primary shoppers, the food and beverage industry is undergoing a recent transformation. Consumers are becoming more health-conscious and digitally savvy, while wanting more personalization. Millennials are also engaging more with their food through social media. Tapping into that personalized experience can increase revenue and loyalty for CPG food companies. As a result, we’re seeing more food and beverage companies trying to increase sales by harnessing the power of artificial intelligence (AI) to suggest personalized nutrition and recipes for consumers. AI-powered marketing can allow food companies to deliver personalized experiences and ultimately increase sales.
Starbucks launched a Digital Flywheel Program that creates Starbucks recommendations based off the customer’s previous order, weather, and other factors. For example, when customers buy Starbucks online through the mobile app, which is occurring much more frequently, the app can suggest Starbucks drinks and other products for the customer. Also, when a customer visits a Starbucks store, the store can identify customers and give the barista their preferred order. These features have contributed to the successful growth of Starbucks and according to a UBS analyst, “has been the largest single contributor to U.S. comp growth in recent quarters”.
Unilever’s food and beverage brand Knorr has also been very active in creating AI-powered campaigns. This year, Knorr created a tool called “Eat Your Feed” that scans user’s Instagram and generates personalized recipes based on the user’s posts. Millennials are very active with posting food pictures on Instagram, and Knorr is leveraging this to create personalized recipes, helping build consumer engagement. Last year Knorr also created a “Love at First Taste” campaign where based off the person’s preferences Knorr generates a flavor profile that the person can share on social media, with the goals of possibly finding someone special that shares your taste.
Campbell’s Soup partnered with IBM Chef Watson to create an AI-powered marketing ad that generates recipes based on the consumer’s preferences. When a user sees an advertisement for Campbell’s Soup on the IBM Weather Company’s website, the user can say or text specific ingredients, and Campbell’s Soup will generate recipes. IBM’s Watson can also create recipes that incorporate weather into the consumer’s food choices. For example, if it’s a cold day, Watson will be more likely to recommend a soup recipe. Campbell’s Soup also invested in a personalized nutrition app called Habit, that analyzes the user’s blood, DNA, and other factors to determine which nutrients are most ideal for that specific individual.
Similar to Campbell’s Soup, Kellogg partnered with IBM Chef Watson to create Bear Naked Custom Made, a service that allows customers to customize their granola with specific ingredients. Bear Naked Custom offers over 50 flavors to make your own granola mix.
AI-powered marketing aligns with millennials’ desire for personalization, especially for healthy and tasty foods. Knowing this, consumer packaged goods companies should continue to invest in AI and advertise marketing campaigns based on the individualized experience that AI creates. Implementing this sales and marketing strategy will help build consumer engagement by making the customer feel valued, helping to drive sales.
Subscribe to Clarkston's Insights
Co-author and contributions from Thomas Wang.