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AI adoption slow despite potential gamechanger status

F&B brands should explore how they can use AI to adapt to disruption and build long-term resilience if its adoption is to transform their operations effectively, according to Argon & Co.

In its Operations Outlook report, the global management consultancy states that food and beverage (F&B) businesses are under pressure to adapt to severe disruption. However, artificial intelligence (AI), with its growing and advancing range of applications, could provide solutions that enable resilience.

Findings into the opportunities and obstacles facing F&B businesses reveal that the sector is experiencing unprecedented challenges and risks. Technological change, supply chain disruption, severe labour shortages, and major cyberattacks are among the most significant threats.

“The pace of technological transformation is forcing businesses to modernise systems and processes quickly, often without a clear pathway for successful AI implementation,” James Watson, partner at Argon & Co UK, told Ingredients Network.

As a result, F&B businesses are struggling to engage in transformation within their value chains. These challenges are reshaping the production landscape and creating a divide between businesses that are adapting and those that are struggling to keep up.

AI adoption: Attractive, but early and divisive

AI uptake is currently limited, with F&B businesses interested in the technology but without a robust strategy for its effective implementation.

According to Argon & Co’s report, more than four in five (82%) F&B businesses view AI as a potential gamechanger to support growth, while seven in 10 (70%) say their organisation’s leadership actively champions AI initiatives and new developments.

“Technology, especially AI, offers huge potential,” said Watson.

However, despite F&B brands recognising AI’s capabilities, just two in five (40%) have a clear roadmap for its impending adoption into business processes and how this will contribute to their organisation’s transformation strategy.

To use AI effectively, Argon & Co recommends that F&B brands explore how the technology can help them adapt to disruption and build long-term resilience.

“The key is to start with a clear goal: what value are we trying to deliver?” said Watson.

Effective AI can subsequently help overstretched teams by improving forecasting, optimising production and lowering waste.

Using techniques like transfer learning, for example, enables F&B brands to access trained models based on wide food production data. They can then adapt them for niche tasks – such as predicting spoilage in artisanal cheeses – while decreasing development costs and speeding up implementation.

However, the report states that the F&B businesses that have implemented AI strategies say that it is delivering tangible benefits. These strategies extend to business operating models, such as automation, building closer supply chain partnerships and adopting more agile operating models.

“We’re also seeing longer-term retailer-supplier agreements, such as the 10-year deals Sainsbury’s has signed with Moy Park and Cranswick, which are giving companies the confidence to invest in areas with longer payback periods,” said Watson.

Equally, around one in four leaders reports that their strategies had little to no effect, or even made disruption worse.

“That reflects how hard it is to solve structural problems like persistent labour shortages, relentless inflation, and geopolitical uncertainty with short-term fixes,” Watson said.

Looking at the bigger F&B industry landscape reveals that stunted growth or decreasing volumes result in the broader market gap, where some manufacturers are positioning for long-term resilience while others are at risk of being left behind.

Recognising AI’s purpose and organisational needs

AI is recognised for its potential as a beneficial tool that can help businesses respond faster to disruptions, support them in adapting quickly to changing consumer preferences, and reduce manual errors.

“AI should be a helping hand for stretched workforces, not a headcount reducer,” said Watson.

Concerns over the resilience of technological systems are part of the reason behind leaders’ reluctance to implement AI strategies. The report found that more than one-third (37%) of participants believe their organisation’s technical infrastructure is robust enough to support AI implementation.

A lack of investment in developing staff’s technology skills is also a worry. Fewer than two in five (39%) F&B business leaders stated that they feel confident they are investing enough in AI training.

“Investing in real AI skills – more than just a one-time, tick-box training session – will help F&B firms positively transform their operations for future resilience,” Watson added.