Mondelez International, a significant player in the global snack food industry, is increasingly deploying artificial intelligence (AI) to enhance its research and development processes. Reported by the Wall Street Journal, the company has been using an AI tool since 2019, developed in collaboration with Fourkind, a software consulting firm now integrated into Thoughtworks. This tool facilitates the R&D team at Mondelez in creating recipes by analysing factors such as flavour, aroma, and appearance, as well as assessing ingredient costs, environmental impact, and nutritional value.
The AI system has transformed the traditional recipe formulation process, which heavily relied on trial and error. Mondelez asserts that the integration of this AI technology has significantly expedited product testing and production trials, allowing them to progress up to four to five times faster than before. Kevin Wallenstein, section manager at Mondelez, highlighted this efficiency, stating, "The point is we get there faster. The consumer wants the product to taste like X. We're not stopping iterating until it tastes like X … we're doing things more efficiently."
Since its inception, the AI tool has been employed in more than 70 projects, leading to the development of new products, including the Gluten-Free Golden Oreo, alongside updates to classic products. Mondelez's portfolio encompasses well-known snacks such as Oreos, Chips Ahoy, Ritz crackers, Cadbury chocolates, Triscuits, Clif bars, Tate's cookies, and Toblerone.
Regardless of the advancements brought by AI, Mondelez maintains careful oversight regarding the innovations proposed by the AI tool. Earlier iterations, which lacked adequate data, occasionally suggested formulations that were not palatable. Wallenstein illustrated this with an example, saying, "Because [baking soda is] a very low-cost ingredient, it would try to just make cookies that were very high in baking soda, which doesn't taste good at all." To prevent such outcomes, a brand steward oversees the AI's contributions to ensure they align with the established identity of each snack.
Beyond product development, Mondelez is also incorporating AI into its marketing strategies, utilising Google’s Veo video generator to enhance consumer engagement. The comprehensive use of AI indicates a broader trend within the food industry, where data-driven approaches are believed to streamline operations and enhance product offerings.
In financial terms, Mondelez reported a 5.4% increase in organic sales for the latest quarter, along with an 11.2% rise in adjusted gross profit dollars. However, the company's shares experienced a 0.24% decline, closing at $61.34, with an additional 0.42% drop in after-hours trading, marking a year-to-date fall of 16.93%. In the midst of exploring potential mergers, including discussions with The Hershey Co., Mondelez continues to navigate market pressures while actively evolving through technological innovation.
Source: Noah Wire Services