Drinks companies must review the opportunities and risks of generative artificial intelligence (AI)* as the technology continues to “transform” the business landscape, according to data and analytics company GlobalData.
GlobalData, Just Drinks’ parent company, predicts the AI market will grow from $103bn in 2023 to $1,037bn by 2030 – a 39% CAGR.
Speaking to delegates at the International Beer Strategies Conference in Porto, Portugal, last week, David George, director of services for thematic research at GlobalData, said AI's integration would become necessary for profitability.
“The pace of technological innovation and disruption is arguably greater and faster today than it has been at any time certainly in the last 20 or 30 years,” he said.
“AI and generative AI in particular is transforming business [and] it will only continue.
“We're at a fairly early stage of that growth roadmap… the impacts on business will continue to be more and more significant over time.”
He advised businesses to launch an internal process review to determine the risks and opportunities generative AI poses. This should be done across five categories, he said: technical, financial, organisational, strategic and ESG.
Understanding the regulatory framework is key, he said, as well as running pilot projects to learn more about how the technology works.
In the first quarter of 2024, nearly $40bn worth of deals were driven primarily by AI, according to GlobalData. In 2023, AI did not appear in the top ten themes, George said.
“Big tech companies, who are big investors in AI, have been doing a lot of investment at the smaller scale, that sort of venture capital funding, but have begun to do bigger deals,” George said.
“The other thing that's quite interesting is you've begun to see non-tech companies buying companies for their own AI capabilities to add to their own competitive positioning.”
Beverage businesses can integrate AI throughout the supply chain, from factory floor, to NPD – last year Coke released a drink it claimed was co-created with artificial intelligence – to POS, George said.
GlobalData said increasing use of robotics would become necessary for profitability, citing sky-high labour costs. In the US, the cost of labour is set to increase 56% between 2005 and 2025, while the cost of industrial robots could decline 74%.
“Increasing labour costs means automating the factory floor is becoming a necessity for companies to maintain profit margins,” GlobalData said. “Although the average industrial robot cost nearly $70,000 in 2005, this reduced to $27,000 in 2017 and is forecast to reduce to around $17,000 by 2025.”
Beverage companies are increasingly hiring in the AI field each year. In 2023, an estimated 1,315 job adverts relating to AI were posted by alcoholic-beverage companies in ‘top’ countries, up from 360 in 2020.
LVMH was the largest recruiter with 349 jobs – though this data also includes postings for the company’s fashion division. AB InBev posted the second-most AI-related job ads (125) while Heineken came in third with 104.
These roles include data scientists, data platform developers and AI project coordinators.
*Generative artificial intelligence is the 'next stage' of AI that can generate text, images, videos, or other data when prompted to by a user. According to GlobalData, there are four stages of AI development: reactive AI, limited-memory AI, theory of mind AI and self-aware AI. Programmes like ChatGPT sit in between reactive and limited-memory AI.
