Future-proof your NPD with AI

Written by Johan Langenbick - 20.03.2023

Unlocking the Power of Digitally Enabled Product Development

CPG players are facing an unprecedented level of disruption at present, driven by market uncertainty, rapidly changing consumer needs, governmental regulations, and increased competition from nimble and niche players.  The challenge that many companies are facing is how they can innovate and develop new products within such a volatile context. It’s certainly not through a stage-gate process, whose origins trace back to the ’70s.  This approach has become outdated and is widely understood to be ineffective in today’s fast-paced business environment. 

More and more companies are instead moving towards more circular and continuous flows when it comes to new product development.

Within this context, there is a tremendous amount of energy behind using artificial intelligence (AI) for these purposes on the road to a fully digital product development capability. In this article, we’ll run through some of the key principles that CPG companies should be thinking about along their journey to digitally enabled product development using AI software.

CPG Companies Should be Spending Smarter on Their AI Software

There’s a common misconception that your success with AI is correlated with the amount of money that you’re willing to spend, and that’s simply not true. As detailed in PwC’s ‘Digital Product Development’ report, it is much more important to spend smarter and more intentionally if you want to drive toward real business outcomes.

For CPG companies, the focus should be on utilizing AI software to reduce the time it takes to get a new product to market, as the resultant efficiencies will far outweigh the initial investment that is required to get your AI technology integrated into the organization.

To put that impact into perspective, the research shows that by mastering digitally enabled product development, companies can reduce the time to market by 28%, reduce the costs of production by 20%, and improve efficiency by up to 31%.



Large organizations like L’oreal and AB InBev are using AI tools to boost sales and improve customer experience. L’oreal’s AI-enabled at-home device delivers personalized skincare and cosmetics by combining personal skin analysis and product preferences. AB InBev introduced a beer product in the French market positioned as a competitor with wines, leveraging AI tools to increase sales. By combining the data users with product preferences, companies can innovate in a way that was never possible before.


This demonstrates another finding in the PwC research that companies with more mature digital product development capabilities are more innovative in terms of delivering digital and personalized services.


These sorts of interventions are not just to protect existing market share, but to inject new vitality and energy into the product development process, to challenge assumptions about existing product lines, and to drive better efficiencies across processes and procedures within organizations.

As such, AI software should not be seen as a cost that must be incurred just to keep up, but rather a powerful accelerator for more sophisticated and resource-efficient product development that can give you a competitive edge in a highly saturated consumer goods market.

Predictive Analytics Helps CPG Companies to Put the Consumer First

Today’s digital tools and interfaces with generative AI give companies a radically different capability in terms of consumer insights than has ever been possible. Companies who champion this innovation and utilize the latest in customer analytics and social listening tools can gain a much fuller and more detailed picture of exactly what their target audience is looking for. By drawing on insights from big data, social media conversations, macroeconomic parameters, and more – these tools can help to guide your product innovation with data, rather than relying on anecdotes or intuition from your employees.



As seen in the graph above, digital champions demonstrate much better customer focus when they make use of sophisticated data analytics as the basis for product innovation decisions. Sarita Ribeiro, our Chief Marketing Officer here at Foodpairing, said it this way:

“AI can make products that perform effectively and faster in today’s market.  It usually takes 9 months to develop a product, but with AI software you can go much faster which allows your team to develop more products at the same time.”

None of this happens by accident though. It calls for companies to become digital champions and utilize the insights being created by AI to make the right decisions for consumer preferences and the long-term strategic direction of the company.

Seamless Data Flow Between R&D and Marketing

The key pipeline that can offer the most value here is the one between your R&D efforts and your marketing team. The clarity and speed of communication between these two teams makes all the difference in reducing the time to market for any new products or services. This makes it even more baffling to see many modern companies creating silos for these two departments, which is clearly sub-optimal.

To execute on a fast and agile new product development process, R&D and marketing should operate together, with the data generated within marketing flowing seamlessly into the R&D division to pollinate the process with real customer insights. Then the innovation from R&D should flow back into marketing to test consumer preferences and align new development with what is happening in the real world.

This loop needs to be as tight as possible to give your company a chance to iterate and evolve according to what your customers are looking for. Without this, you’re always going to be operating across purposes and you can’t unlock the true potential of what these tools can offer. 

Implementation of AI Software in FMCG is Not Easy

It’s important to recognize that the implementation of new technologies like this is never easy.  According to figures from the WEF, more than 70% of companies are stuck in pilot purgatory and only a select few have been able to deploy advanced technologies at scale.  This is because a new technology tends to disrupt the status quo and there is a lot of social, financial, and operational momentum that must be shifted if this change is to be made.

Our CEO Johan Langenbick says it like this:

“Building/adopting a new technology is always difficult.  It requires a clear understanding of the business challenges that can be solved with AI.  When integrating AI Software into R&D processes it is extremely crucial to ensure that the right data is fed into the system and algorithms.  Feeding in incorrect data and setting up incorrect structures leads to increased costs and efforts in the long term.”

This shouldn’t be a deterrent though because the benefits of getting this right are plentiful. Perhaps the most important first step to catalyze this transformation is to continually communicate and evangelize for how AI software can transform an organization. When all the relevant stakeholders can understand how this technology can improve the customer experience, drive revenue growth, inform better decision-making, and drive productivity improvements, then it’s much easier to get the buy-in you need to transition to this new future.

Companies of all kinds are already using a wide range of digital tools to get real results for their organizations, and if you can demonstrate why these are so useful, you can drive the sort of reaction you want to see within your organization. Once the prize is well articulated, you’ll find that people rally behind the efforts to move away from the old ways of doing things and towards a digitally enabled product development mindset.

The final obstacle that then needs to be navigated is the conversation around the return on investment. Skeptics like to question whether retailers and CPG companies are earning back the money they’ve invested in these solutions and PwC’s research once again helps us to answer this question:

It’s clear here that the vast majority of companies are seeing benefits, or expect to over the short term, from their investments in digitally enabled product development. AI in food and product innovation is not merely a hype cycle, this is the serious grounding for a new paradigm in technology for the product development of the future.

If you’re looking to partner with an AI company that understands the unique challenges that are present in the CPG ecosystem, then FoodPairing is here to help.

We assist CPG clients to predict successful products and achieve business growth by connecting the right data, insights, and algorithms. Get in touch today and let’s see how we can help!