Digitalising the food and beverage industry: What does it take?

The food and beverage industry is no stranger to digitalisation, yet many companies remain slow to its transformative impact. Giving light on this matter, Mike Walsh shares his thoughts on digital transformation and disruptive innovation in this new era of machine intelligence in food and beverage sector.

To remain relevant, firms must continue to be vigilant and abreast with the latest developments in technology, embracing digitalisation not merely as a necessity but as a means to an integrated end. This implies not only the adoption of data – it is also what one does with it, how it is applied to facilitate operations within the company.

Mike Walsh, chief executive officer of Tomorrow, a global consultancy on designing companies for the 21st century, said: “One of the biggest dangers when imagining the future of any industry is mistaking digital incrementalism for true digital transformation. More AI, algorithms and automation will certainly lead to greater efficiency, speed and cost savings — but that misses the bigger point. The real question is not how operations in the food & beverage industry can be marginally improved, but rather — what is possible in an age of machine intelligence that was not conceivable before?

“In a re-conceptualised, AI-powered F&B ecosystem, everything potentially changes: products become personalised to markets of one, supply chains become more dynamic and resilient to sudden shocks, and you gain radical transparency of the provenance, safety and quality from farm to fork. Think of it this way: in a digitalised future, you no longer sell or distribute food & beverages — you trade in information about food & beverages.”

Reimagining digitalisation

Nevertheless, despite the allure of data and digitalisation, many companies are slow to its uptake, specifically the food and beverage industry. This could be attributed to a few factors, such as digitalisation costs, and the simple fact that some older equipment cannot be retrofitted – for some companies, the overhaul of current, analogue operations to a digitalised one is no easy feat. Furthermore, there could be resistance toward digital changes within a more traditional business framework, stemming from the fear of the loss of the human touch.

“Rather than replacing jobs, greater automation will lead to a reimagining of many roles in organisations. As we start gathering increasing amounts of data, we will become more reliant on AI-powered tools to find opportunities to commercialise. AI can make useful recommendations, but it is up to smart humans to figure out how to leverage those insights into fully formed products,” Walsh assured.

He went on to posit an example where Mars utilised Alibaba data to identify a counterintuitive product for the Chinese market: a spicy Snickers bar that incorporates Sichuan peppercorns. Whereas in past circumstances, when it would have taken Mars at least two to three years to develop a new product, this innovative idea was strung together in less than one.

Simply put, automation seeks to facilitate, not dominate. Yet, as Walsh asserted, digitalisation requires more than just a physical transformation – a cultural change is needed: “Digital transformation is not something that you can buy or subscribe to. The hardest part of transforming yourself digitally is not integrating new technology but embracing the necessary cultural change that drives how you work, communicate, collaborate and make decisions. Culture, not technology, is the real operating system at the heart of our organisations. And it is the best place to start if you really want to change.”

New digital frontiers

To that end, the Asia Pacific, which currently stands at a crossroads between the old and the new, the technological and the traditional, stands as a unique focal point in the new digital age. Possessing one of the largest consumer markets, as well as serving as the capital for technological advancement, there is much to be expected from this region.

“There is a unique opportunity in the Asia Pacific to capitalise on the rapid rise of super apps and the vast amount of data they generate about consumer preferences and behaviours. Asia has long been one of the most dynamic consumer markets in the world. Most of the ideas that gave birth to the massive technology platforms in the West — like social networking, online gaming, mobile devices, retail live-streaming, digital currencies — all had their origins in this region. Quite possibly the next big idea — whether it be augmented reality, a persistent VR metaverse or sophisticated AI avatars — will also be incubated in Asia,” Walsh concluded.

This article was published in the October/November 2021 issue of Food & Beverage Asia.