AI Is Upending the CPG Industry. Can Your Company Keep Up? - CPG Executive Recruiters - Cowen Partners

      AI Is Upending the CPG Industry. Can Your Company Keep Up?

      Artificial intelligence might sound like something out of a sci-fi film. But as we’ve seen in recent years, this rapidly developing technology has already begun to integrate itself into the fabric of our lives.

      Unsurprisingly, AI has shown great promise in the business world. The many everyday uncertainties of the consumer packaged goods (CPG) industry make it an ideal candidate for AI optimization. Here’s a glimpse into how AI is shaping the industry — along with ways to tell if your business is ready.

      How AI Shapes CPG Businesses

      AI has the potential to revolutionize nearly every industry. However, its effects on each one can be markedly different. Here are some ways it is changing the CPG world for the better.

      Optimizing Inventory Levels

      This is a benefit that can be enjoyed by all types of CPG businesses — both those that manufacture products and those that simply ship retail goods. 

      Historically, when deciding how much of a material (or a finished product) to buy, companies have relied upon either human guesswork or algorithms with limited abilities. Both methods have pitfalls that are easily remedied by artificial intelligence.

      Take, for example, the surge in sales many stores experienced during the COVID-19 pandemic. Stimulus money, lockdowns, and other highly unusual factors came together to spur the unexpected boost.

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      Many demand-forecasting algorithms that don’t use AI simply rely on recent sales data to help store managers decide what to order. Because these algorithms don’t take any outside data into account, they caused many of the supply-chain issues seen during and immediately after the pandemic.

      AI-powered demand forecasting tools can help CPG companies avoid this potentially devastating issue. These powerful engines can take into account economic data from within the company and outside of it, leading to more accurate predictions.

      Spotting Emerging Trends

      AI tools don’t operate like Excel spreadsheets programmed to run a set calculation. Thanks to machine learning, quality AI tools function much like a human mind — a very sharp one. Like thoughtful marketers, AI analytics tools can bring together seemingly disparate data points to spot trends in customer behavior, even if those trends are still emerging.

      For instance, AI can take into account data from customers’ purchases, social media activity, chats with customer support, and more. It’s powerful enough to sift through even seemingly endless data to deliver actionable insights.

      Creating Personalized Marketing

      Traditionally, marketing teams have worked together to design campaigns that appeal to a wide range of people. But what if you could optimize marketing for each individual customer? It’s not a task you can accomplish manually. But through the power of AI, you can offer each customer curated selections and increase your sales. 

      The best-known example of this kind of targeted marketing is probably Amazon’s product suggestions. Amazon’s recommendation engine uses AI to analyze customer behavior data and suggest products that customers have a high likelihood of buying.

      Harnessing the Power of AI in Your Own Company

      AI can help change your business for the better, but it’s not a magic bullet. Here are a few things to keep in mind:

      Know Where You Are Now (and Where You Want to Be in the Future)

      KPIs are critical if you want to measure progress and achieve real growth. Before you start implementing AI solutions, get a solid understanding of your baseline and decide what benchmarks you want to reach in the near future. That way, you’ll be better equipped to quantify the growth you see with AI.

      Have Clean Sources of Deep Data

      For machine learning to be truly effective, you need lots of accurate (or “clean”) data. Data cleaning is an often-overlooked element of the machine-learning process. When you clean your data, you eliminate inaccuracies and discrepancies.

      Remember that if you want quality insights, your AI needs quality data. Think of it like studying for a test. If you’re learning from a textbook full of errors, it doesn’t matter how much knowledge you retain — you still won’t do well.

      The data you collect also needs to be deep. This means that while it’s highly detailed, it’s also high-quality, actionable, and relevant to your purposes. Essentially, pay close attention to your data sources! AI insights are only as good as the data they come from.

      Assess Data in Real Time

      Part of the reason AI is so valuable for businesses is its timeliness. Because the technology is so efficient, it can identify trends as they’re happening. When you implement AI tools, it’s critically important to make sure you have a way to promptly identify and act on valuable insights.

      Is Your CTO Ready for the AI Revolution?

      AI is in its infancy. If you want your company to be able to keep up with its evolution, you need to ensure your CTO is up to the challenge. And while it might seem like hiring a CTO with AI experience is an easy answer, there are other, more important factors to consider.

      Essentially, you want a CTO who understands the big-picture way that AI works — not just someone who has worked with AI but lacks in-depth knowledge of it. A CTO with AI experience might be helpful for a time. But AI evolves so quickly that by this time next year, the CTO will need to re-learn how to use it.

      AI Executive Recruiters With CPG Experience

      If you hire a CTO with a background in enterprise resource planning, cybersecurity, or something similar, you’ll be choosing someone who can adapt and grow with the technology. When they have a thorough understanding of AI, they’ll be able to use it in a way that truly benefits your company.

      Find the Forefront of the AI Frontier

      The business world is more or less in the Wild West of artificial intelligence. If you want to get ahead of other companies in your field, you need a guide who isn’t afraid to think creatively. When you take the time to find a CTO with the right skill set, your company will be poised to grow right alongside this exciting new technology.

      National CPG Executive Search Firm | How We Help


      Our hands-on CPG executive recruiters have experience working with VC, private equity, public, pre-IPO companies. Clients are typically $50 million in revenue to Fortune 1000’s. We also work with ESOPs in retail, grocery, and consumer goods nationwide. Successful placements span the entire C-Suite – CEOChief Operating OfficerChief Financial Officer, and include vice president salesgeneral counsel, and other director-level leadership roles.

      Learn how our consumer goods executive search firm delivers top talent, no matter the need, through our industry-leading research and resources. Discover the strategy that made Cowen Partners a leader among the nation’s best executive search firms in New York, Anchorage, Chicago, Seattle, Atlanta, Dallas, Los Angeles, and beyond.

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