CASE STUDY

AI Tools Determined Customer Preferences and Enabled New Product Development Solutions for an F&B Major

Jun 2, 2022

Highlights of the Case Study: 

Particulars Description 
Client A major Asian F&B company located in India witnessed a continuous decline in beverage sales over the years. 
Business Challenge To understand how different cohorts of customers perceived beverage flavors and discover a new flavor preferred by customers in the target market. Our client wanted to rely on accurate data-driven insights to develop new revenue-generating beverages.  
Impact Quantzig used AI tools to sort through an enormous amount of data generated through surveys, focused groups, and tasting panels to identify emerging beverage flavors. 

Game-Changing Solutions for Food & Beverage Manufacturers 

F&B companies need to constantly introduce new products in the market and revamp their existing products to cater to shifting customer preferences. The shifts in customer preferences occur more rapidly than the F&B product development cycle, leading to the failure of many newly launched products. Therefore, F&B players require emerging digital tools such as big data analytics and artificial intelligence (AI) for predictive F&B product development

Other industries, such as the pharmaceutical industry, have gained significant momentum by adopting AI-powered analytics for drug discovery and accelerating new drug development. However, the F&B sector is still in the early days of leveraging such digital tools. 

Quantzig offers AI-powered analytical solutions that enable the transition from manual processes to automate, data-driven insights by digitizing and streamlining our clients’ new product development (NPD) processes. We can help clients in the F&B industry understand the flavors and textures that drive customer preferences in each market. We can do so by clustering consumers by their choices and identifying segments of consumers predisposed to like or dislike an F&B product available in the target market. 

The Challenges of the F&B Client 

Our client, a major Asian F&B company located in India, witnessed a continuous decline in the sales of its beverages over the years. The client approached Quantzig to help understand how different cohorts of customers perceived beverage flavors. It also wanted support in creating a new flavor preferred by customers in its target market. Our client wanted to rely on accurate data-driven insights to develop new revenue-generating beverages.  

The client had relied on traditional sensory panels for its NPD process, which was time-consuming and did not guarantee the success of its newly launched products. Thus, it reached out to Quantzig to better understand the sensory perception of consumers and identify new beverage flavors with high growth potential. 

Food and Beverage NPD Solutions 

Our analysts used AI tools to sort through an enormous amount of data generated through surveys, focused groups, and tasting panels to identify emerging beverage flavors. Our analysts focused on beverage flavors preferred by consumers in the age group of 10 years to 60 years for this project.  

In the first stage, we developed a benchmark for the market performance of existing flavors based on the flavor profiles of consumers in India. We analyzed and ranked 36 flavor attributes on an intensity scale from 0–5 and assigned a predicted perceived quality (PQ) score to each flavor. Flavors that received a score of 4 and above were considered competitive in the market. In addition, we determined non-competitive beverages and areas of low competition across potential flavors, demographics, and preferences. We also explored a new combination of flavors that did not exist in the Indian market. 

Impact Analysis of Quantzig NPD system  

We identified and shortlisted two beverage flavors that held the highest probability of success with Indian consumers through our analysis. Tracking customer preferences and trends gave our client a competitive advantage over other leading providers of flavored beverages. It provided the client the insights to include customer-preferred attributes in their beverages. In addition, our PQ scores for other complementary and potential local flavors helped our client with an innovation pipeline for the upcoming years. The solutions developed by Quantzig enabled our client to reduce its insight collection process from 5 months to 2 weeks. 

Key Outcomes 

Quantzig’s reliance on AI tools in NPD processes guaranteed the creation of accurate data-driven insights. These insights would increase the likelihood of our client being able to create flavors that would appeal to the target audience. Moreover, technology helped speed up the process to be more aligned with the rapidly changing consumer preferences. Furthermore, the client could leverage our PQ scores for other complementary and potential local flavor analyses for subsequent product developments in the coming years.  

Broad Perspective on the role of NPD in the F&B Industry: 

Till very recently, NPD activities in the F&B industry had resided mainly in North America and Europe. However, as the markets continue to expand in APAC, it will be beneficial to cater to the evolving needs of the regional customers. According to an article in the Business Standard, over three-quarters of the global middle-class growth is expected to be from Asian countries (India and China) by 2030. These factors will lead to increased demand for packaged F&B products, thus intensifying the competition in the regional market. Leading F&B players have recognized this opportunity and are focused on demographic-driven NPDs. Therefore, an agile and data-driven approach to developing new F&B products and reformulating existing products will gain traction in APAC. 

Key Takeaways 

  • Identified and catered to the rapidly changing consumer tastes  
  • Relied on AI tools in NPD processes for accurate data-driven insights 
  • Analyzed and ranked 36 flavor attributes on an intensity scale from 0–5 to arrive at flavors that were likely to be competitive in regional markets  
  • Explored a new combination of flavors that did not previously exist in the Indian market 
  • Enabled the client to reduce its insight collection process from 5 months to 2 weeks 
  • Imparted the client with knowledge on PQ scores for other complementary and potential local flavors, which would help with its innovation pipeline in the upcoming years

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