Food Industry Faces Challenges in AI Adoption for Product Innovation

What's Happening?

The food and beverage industry is increasingly interested in using artificial intelligence (AI) for product innovation, according to the 2025 New Product Development Report by TraceGains. Despite this interest, many companies are hindered by outdated manual processes and a lack of long-term modernization strategies. The report indicates that 83% of companies have increased their spending on new product development in 2025, driven by the need to address inflation, resource constraints, and consumer demand for healthier products. However, 82% of companies still rely on manual administrative practices, such as spreadsheets and paper files, which slow down innovation. While some companies are embracing AI for tasks like regulatory compliance and market analysis, a significant portion remains cautious about fully integrating AI into their operations.

Why It's Important?

The slow adoption of AI in the food and beverage industry highlights a critical gap in the sector's ability to innovate and compete effectively. As consumer preferences shift towards healthier and more sustainable products, companies that fail to modernize their processes risk falling behind. The reliance on manual practices not only hampers efficiency but also limits the industry's capacity to respond to market demands and economic pressures. Embracing AI could streamline operations, reduce costs, and enhance product development, offering a competitive edge in a rapidly evolving market. The industry's progress in AI adoption could significantly impact its future growth and sustainability.

What's Next?

As the industry grapples with the challenges of AI adoption, companies may need to invest in training and infrastructure to facilitate a smoother transition to digital processes. There is potential for increased collaboration between technology providers and food manufacturers to develop tailored solutions that address specific industry needs. Additionally, as more companies recognize the benefits of AI, there may be a gradual shift towards more automated and efficient practices. Policymakers and industry leaders might also play a role in encouraging innovation and supporting the adoption of new technologies to enhance the sector's competitiveness.