CPGs’ Shared Vision for AI and How To Get There

Consumer packaged goods industry leaders were tantalized by the potential of artificial intelligence well before ChatGPT 3.0’s November 2022 introduction. Combinations of GenAI and “traditional” rules-based machine learning suddenly promised to boost automation across a wide swath of CPG business processes while enabling sophisticated, AI-driven forecasting and analysis based on natural-language queries by nontechnical staff.

It’s been more than two years since the dawn of the GenAI revolution. Where does the CPG industry stand with AI? And where does it look like it’s headed?

SAP recently surveyed dozens of global CPG leaders to find out. They represented a diversity of segments (food and beverage, beauty care, household products, health and personal care, and durables, among others) and sizes, with annual revenues from $500 million to more than $25 billion. Here’s what we learned.

A Shared Vision for AI in the CPG Industry

First, the big picture. While CPG businesses all have their own AI-related visions and deployment roadmaps, there’s a surprisingly universal understanding of the ultimate highest and best use of AI in this industry. 

AI will help CPG companies detect and predict shifting consumer tastes while enabling greater customization and personalization of products for those consumers. It will drive increasingly automated product innovation cycles by producing goods via AI-streamlined supply chain and manufacturing processes steered by AI-powered demand forecasting. In short, AI will enable CPG firms to meet consumer needs with unprecedented precision and agility.

That’s a lot to digest, and it’s not happening overnight. But CPG business focus of their AI investments in two key areas — fostering profitable growth and enhancing supply chain resilience — show that they’re moving in the right direction.