AI in the Food Industry

While Artificial Intelligence (AI) in certain forms has, arguably, been around for years, 2023 was the year that the full scope of possibilitites for this technology started to become clear. AI is actually a blanket term for a large group of technological advancements that differ from other technology in not only the quantity of data they can work with but also in their ability to reason, actively engage, sense, and think. Every day AI is being used in new and creative ways across a wide range of industries. As AI developments move forward and it becomes more entrenched in how business is done, keeping up with this technology and using it to its full advantage is going to be a key to maintaining competitiveness. In the food industry there are already a number of different ways that AI is being applied now, and it will likely find many more applications in the near future.

Precision Agriculture

Agriculture is of course at the root of the food industry, and it is in many instances the most resource intensive portion of the food supply chain. Increasing efficiency in agriculture makes the entire food system more efficient. Smart irrigation systems powered by AI can utilize predictive analytics to look at satellite data, historical data, soil sensors, and more when determining a crop’s water needs. AI is also being used to significantly improve pest detection and minimize the need for unnecessary pesticide applications. Using AI to detect pests is much more precise and less labor intensive than other detection methods. These, and other uses of AI in agriculture are making farming more effecient, more cost effective, and more environmentally sustainable.

Traceability Through the Supply Chain

For much of Hawaii’s food supply we are at the end of very long, complex supply chains. Keeping track of a product with multiple ingredients coming from different locations and going through various manufacturing and packaging steps at other locations can seem daunting, if not impossible. Block chain and devices connected to the Internet of Things (IoT) and equipped with end-to-end traceability have already proven to be gamechangers when it comes to supply chain management. These AI technologies mean companies can more easily track specific products to improve efficiency. Furthermore, if there is an problem with a certain product it’s more easily traced and more effectively recalled. Consumers also benefit from improved transparency and can learn about their food’s origin and manufacturing information.

Food Safety Monitoring

Improving food safety may prove to be one the most important applications of AI. According to the U.S. Department of Agriculture, “While the food supply in the United States is one of the safest in the world, the Centers for Disease Control and Prevention (CDC) estimates that each year roughly 1 out of 6 Americans gets sick, 128,000 are hospitalized, and 3,000 die from foodborne diseases. Preventing foodborne illness and death remains a major public health challenge.” AI can be applied in a variety of ways to improve food safety. Algorithms to determine shelf-shelf life, virtual reality training tools, IoT robotics to improve sanitation, and analytical AI to detemine the likelly hood of contamination are just a few examples.

Personalized Nutrition

There are a lot of factors that go into each customer’s food consumption habits. Medical history, health goals, the culture they grew up in, the availability of certain foods, level of activity, and of course their personal taste. Some of these are easier to control for than others when trying to determine a diet plan, and there is a lot of conflicting information and ideas available in different spaces that may not be right for everyone. People who want to maximiza their nutrition can spend a good deal of time and money on expert help. AI is now available that can analyze the relevant information and craft personalized nutrition plans. As this becomes more common it will likely have larger scale impacts on people’s eating, and food buying habits.

These are just a few of the areas where food businesses should be ready to see AI making changes to the industry. It’s likely that almost every facet of our food systems will be impacted by AI at some point in the next few years. Being ready to adopt.

AI in Food Retail

This spring we were pleased to host an event on AI in Food Retail with experts on some different facets of this new development. Our presenters provided a look at just a few of the ways AI will be impacting food retail now and in the future.

AI & the Democratization of Data John Ross, President and CEO IGA Inc.

What does AI mean for grocery retailers? For operations, AI has so many benefits. In the future, we could ask an AI engine to handle scheduling, matching associate needs and work demand schedules to keep the retail floor manned but still let workers balance work and home. Instead of badgering the operations manager in stores, associates could interact with an AI engine in real time. AI-powered scanners could look at items in real time the way a human does. This means figuring out the difference between a plantain and banana and pricing them accurately in lane through a camera interface, without special stickers, tags or specialized cashier training. AI could monitor shrink in real time too, looking at rate of sales in perishable products and recommending discounts before products turn to waste. One of AI’s big advances is its ability to make recommendations in real time to allow human interaction to address a problem before it becomes critical.

For managers, it would shift the way they interact with reports and systems. In the future, AI-powered management tools would allow leaders to ask, “What should I do to increase margins in produce?” rather than having to sift through a mountain of data to find an answer. A natural language interface to product and sales data would be a game-changer for managers. Instead of relying (and waiting for) data analysts to ferret out clues from the hordes of retail data we generate, AI engines can respond to queries directly.

• “Why is shrink growing in deli?”
• “What are three ideas to improve response to my advertising?”
• “Where can I raise prices without alienating customers, and where should I reduce prices to increase draw rate of new customers?”

We’ve heard these promises before. Every commercial analytics platform promises that their software will make our team smarter.  The difference here is that operators and merchants can interact with the data directly, intuitively, and get real time suggestions – not just reports and graphs – without having to be data scientists themselves.

For independent grocery retailers—who have generally lagged behind chains in the ability to adopt new and costly technologies and often don’t have access to detailed data analysis—AI’s democratization of data could be a game changer. Imagine for a moment this kind of powerful information in the hands of an independent grocer who, by nature of their independence, is nimble enough to make changes on the spot. Independent grocers and their teams could use the data to improve their operations and their customer experience not tomorrow, or next week, or next month – but immediately.

It’s a dream scenario come true for independents, and one that could be the key to unlocking a true and lasting competitive advantage.

A Case Study in Real World AI Use With AppCard and Ferri’s IGA

Eran Harel, SVP Corporate Development and Strategic Partnerships, AppCard

AppCard’s proprietary AI algorithm allows retailers to regain control over their conversations with their shoppers by learning shoppers’ unique buying cycles and delivering the right message and coupons to customers at the right time, increasing conversion and sales. This case study shows how Ferri’s IGA created a personalized shopping experience leveraging their data powered by AppCard.

Ferri’s IGA, a small grocery store in Murrysville, Pennsylvania, wanted to enhance shopper engagement and boost coupon redemption rates through the AppCard program. The team at Ferri’s IGA focused on creating a shopper-centric approach to best serve their dedicated shoppers.

Recognizing the significance of aligning their strategy with their predominantly older shopper base, Ferri’s IGA has placed a strong emphasis on shopper engagement. Cashiers played a pivotal role in promoting their AppCard-based rewards program at checkout during every transaction. They encouraged shoppers to enter their contact info at the in-lane touchscreen terminal, facilitating seamless communication between the store and shopper through emails and the AppCard mobile app. The in-lane terminal has streamlined the checkout experience, allowing shoppers to quickly and easily clip and redeem coupons by entering their phone number.

Cashiers are central to Ferri’s IGA’s journey. Cashiers received $0.50 for each new shopper they enrolled in the AppCard program. This incentive program resulted in a remarkable 1376 new shoppers between May and August 2023, directly contributing to increased coupon redemption rates.

The store also meticulously crafted a promotional calendar aligned with national holidays and special events. Regular emails are sent to shoppers, providing a preview of upcoming promotions, discounts, bonus points, and exclusive offers.

Innovation remains at the forefront of Ferri’s IGA’s strategy. Themed holiday promotions in collaboration with the deli and bakery departments, are in the pipeline. Regular email communication offers extra rewards points, enhancing shopper anticipation.

Effective communication with staff, especially the dedicated cashiers, has emerged as a cornerstone of success. Team members have been well-versed in ongoing promotions, and their input and feedback have played a pivotal role in shaping marketing strategies. This collaborative approach ensures alignment in engaging shoppers and promoting the AppCard program.

The success story of Ferri’s IGA serves as a testament to the power of a shopper-centric approach, driven by passionate cashier engagement and strategic promotions and driven by AI. By aligning their strategies with the preferences of their loyal shoppers and leveraging technological tools and support provided by AppCard, Ferri’s IGA has achieved remarkable results. Ferri’s rewards members have spent, on average, $8.91 more than non-members. In addition, Ferri’s rewards members have spent, on average, $20 more when redeeming points and rewards, which has led Ferri’s to a whopping increase in sales of $346,000 at the end of the first year from launching the program.