Mondelez International, the multinational confectionery giant behind beloved brands like Oreo and Cadbury, is leveraging the power of artificial intelligence (AI) to revolutionize its recipe development process. This strategic move, detailed in a recent Wall Street Journal report, highlights the growing influence of AI in the food and beverage industry. Since 2019, Mondelez has been using an AI tool, developed in collaboration with Fourkind (now part of Thoughtworks), to dramatically accelerate the creation of new recipes and enhance existing ones.
This AI system doesn’t just randomly generate recipes; it’s a sophisticated tool that considers a range of factors. It analyzes desired traits such as taste, aroma, and visual appeal, while simultaneously factoring in ingredient costs, environmental impact, and nutritional value. By using this data-driven approach, the AI proposes new formulations, effectively replacing the traditional trial-and-error method that once characterized recipe development. The results have been impressive: Mondelez reports a four to five times increase in the speed of product testing and production trials. The AI-driven process, although subject to human taste testing to ensure quality and consumer appeal, has significantly streamlined the entire process.
The success stories speak for themselves. The AI has already been utilized in over 70 projects, leading to the creation of innovative products like the Gluten-Free Golden Oreo and improvements to classic recipes. This showcases the potential for AI to not only streamline processes but also to drive innovation within a well-established industry, leading to fresh and exciting product options for consumers. The efficient use of resources and focus on sustainability are also key benefits highlighted by Mondelez’s approach. This is becoming increasingly important for businesses aiming to meet growing consumer demands for eco-conscious and ethical products.
However, the journey hasn’t been without its challenges. Early versions of the AI, hampered by insufficient data, occasionally produced unusual and even unappetizing suggestions. For example, due to the low cost of baking soda, the AI initially tried to create cookies with excessively high levels of baking soda, resulting in an unpalatable product. This underscores the vital role of human oversight in the AI-driven process. A brand steward serves as a critical checkpoint, ensuring that the AI-generated recipes maintain the core identity and expected taste profile of each brand. This balance between AI efficiency and human expertise is essential for success in this space.
The integration of AI into food production is a rapidly evolving landscape. While Mondelez’s success is encouraging, recent examples like Instacart’s initially flawed AI-generated recipes serve as a reminder of the challenges and potential pitfalls. This emphasizes the importance of responsible AI implementation and the need for rigorous testing and refinement before widespread deployment. Mondelez’s efforts also extend beyond product development. The company is actively employing AI in its marketing strategies, utilizing Google’s Veo video generator. This showcases a holistic approach to integrating AI into various facets of the business.
Mondelez’s recent financial performance further contextualizes its AI investments. The company reported a 5.4% increase in organic sales in the latest quarter and an 11.2% rise in adjusted gross profit dollars. While the company’s stock experienced a slight dip recently, its overall performance demonstrates a healthy financial position, enabling investment in cutting-edge technologies like AI. The company’s recent exploration of a merger with Hershey’s, though ultimately unsuccessful, underscores its ambitions for continued growth and market dominance in the confectionery and snack food sector.
In conclusion, Mondelez’s adoption of AI in recipe development marks a significant advancement in the food industry, showing how technology can accelerate innovation while retaining the importance of human expertise and brand identity. The company’s success, despite the challenges faced, provides a compelling case study for other companies looking to integrate AI into their operations and improve efficiency and sustainability in product development and marketing.
