How AI is Reshaping the Food Services Industry

The food services industry might seem an unlikely candidate for AI adoption, yet the market, which includes full-service restaurants, quick-service restaurants, catering companies, coffee shops, private chefs, and a variety of other participants, is rapidly recognizing AI's immediate and long-term potential. 

AI in food services is poised for widespread adoption, predicts Colin Dowd, industry strategy senior manager at Armanino, an accounting and consulting firm. "As customer expectations shift, companies will be forced to meet their demands through AI solutions that are similar to their competitors," he notes in an email interview. 

Mike Kostyo, a vice president with food industry consulting firm Menu Matters, agrees. "It's hard to think of any facet of the food industry that isn't being transformed by AI," he observes via email. Kostyo says his research shows that consumers want lower costs --making it easier to customize or personalize a meal -- and faster service. "We tell our clients they should focus on those benefits and make sure they're clear to consumers when they implement new AI technologies." 

Seeking Insights 

On the research side, AI is being used to make sense out of the data deluge firms currently face. "Food companies are drowning in research and data, both from their own sources, such as sales data and loyalty programs, and from secondary sources," Kostyo says. "It's just not feasible for a human to wade through all of that data, so today's companies use AI to sift through it all, make connections, and develop recommendations." 

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AI can, for example, detect that spicy beverages are starting to catch on when paired with a particular flavor. "So, it may recommend building that combination into a new menu option or product," Kostyo says. It can do this constantly over time, taking into account billions of data points, creating innovation starting positions. "The team can take it from there, filling their pipeline with relevant products and menu items." 

Data collected from multiple sources can also be used to track customer preferences, providing early insights on emerging flavor trends. "For example, Campbell’s and Coca-Cola are currently using AI in tandem with food scientists to create new and exciting flavors and dishes for their customers based on insights collected from both internal and external data sources," Dowd says. "This approach can also be applied to restaurants and other locations that rely on recipes." 

Management and Innovation 

AI can also optimize inventory management. "AI is being used to determine when to order, and how much inventory a company needs to purchase, by analyzing historical data and current trends," Dowd says. "This allows the restaurant to maintain ideal inventory levels, reduce waste and better ensure that the restaurant always has the necessary ingredients." 

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When used as an innovation generator, AI can inspire fresh ideas. "Sometimes, when you get in that room together to come up with a new menu item or product, just facing down that blank page is the hardest part," Kostyo observes. "You can use AI for some starter ideas to work with." He says he loves to feed outlandish ideas into AI, such as, 'What would a dessert octopus look like?' "It may then develop this really wild dessert, like a chocolate octopus with different-flavored tentacles." 

Customer Experience 

AI promises to help restaurants provide a consistently positive experience to consumers, says Jay Fiske, president of Powerhouse Dynamics, an AI and IoT solutions provider for major multi-site food service firms, including Dunkin', Arby's, and Buffalo Wild Wings. He notes in an email interview that AI and ML can be used to flag concerning data, indicating potential problems, such as frozen meat going into the oven before it should, or predicting a likely freezer breakdown sometime within the next two weeks. "In these situations, facility managers have time to quickly preempt any issues that could cost them money, as well as their reputations with consumers," he says. 

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Another way AI is transforming the food services industry is by providing more efficient and reliable energy management. "This is important, because restaurants, ghost kitchens, and other food service businesses are extremely energy intensive," Fiske says. Refrigerators, freezers, ovens, dish washers, fryers, and air conditioners all consume massive amounts of power that can be controlled and optimized by AI. 

Future Outlook 

The sky is the limit for food services industry AI, Kostyo states, noting that market players are taking various approaches. Some are excited about AI, and afraid to get left behind, so they're jumping right into these tools, while others are a little more skittish, concerned about ethical and privacy issues. 

Kostyo urges AI adopters to periodically monitor their customers' AI acceptance level. "In some ways, customers are very open to AI," he says. "Forty-six percent of consumers told us they're already using AI to assist with food decisions in some fashion, such as deciding what to cook or where to eat." Kostyo adds that 59% of surveyed consumers believe that AI can develop a recipe that's just as delicious as any human chef could create. 

On the other hand, people still often crave a human touch. Kostyo reports that 66% of consumers would still rather have a dish that was created by a human chef. "Consumers frequently push back when they see AI being used in a way that would take a human job." 

Service First 

Kostyo urges the food industry to use AI in ways that will enhance the overall consumer experience. "At the end of the day, we are the hospitality industry, and we need to remember that."