Pepsi using AI to track consumer demand, speed up product development

Artificial intelligence has helped PepsiCo speed up its product development cycle and keep shelves stocked

Food and beverage giant PepsiCo is incorporating artificial intelligence (AI) into its processes for tracking consumer demand and new product development, helping the company boost its sales and bring new products to consumers faster.

PepsiCo Chief Strategy and Transformation Officer Athina Kanioura joined the company in 2020 and began integrating AI into the company’s various processes for sales, research and product development. Kanioura told Axios the company has spent "hundreds of millions" in recent years to do so.

"PepsiCo has always been using technology to engage with our consumers," Kanioura said in a corporate fact sheet on the company’s AI initiatives in 2021. "Now, because of AI we can understand what consumers want and how they want to be engaged. We have millions of data sets to tailor our products and create experiences that are highly customized."

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PepsiCo

PepsiCo has spent the last few years integrating AI processes into its sales and product development systems. (Mario Tama/Getty Images / Getty Images)

"The cycles of development have been reduced from years to months," Kanioura added.

For instance, PepsiCo said it used an AI tool to analyze millions of posts on social media, in addition to recipes and menus on the internet. The results of that analysis prompted the company to develop Off The Eaten Path seaweed snacks, a process that took less than a year.

Another example of AI-generated insights informing PepsiCo’s product development came when research found consumers were interested in immunity, which led it to start producing Propel Water with immunity-boosting ingredients, and the new product made it to store shelves six months later.

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Naked Juice PepsiCo

Naked juice bottles on a store shelf. An example of PepsiCo’s line of healthy products. (PepsiCo)

Frito-Lay, which is a subsidiary of PepsiCo that features Cheetos as part of its portfolio, has used AI to help ensure the product’s quality in taste and texture remains consistent. 

"We’ve trained a machine ‘brain’ to measure the Cheetos, look at them and detect when adjustments are needed," PepsiCo SVP Foods R&D Denise Lefebvre said in the fact sheet. "This is the ideal application for AI because we know really well what consumers love and value about Cheetos, and we can train a system to understand that."

Another use PepsiCo has considered for AI is helping it determine how to best utilize store shelves and space available for its merchandise at a given grocery or corner store.

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Magesh Bagavathi, PepsiCo SVP and chief technology officer, said in the fact sheet that a sales rep can take a video of a store’s shelves to create a map of what products need to be stocked.

"You can immediately start tailoring products based on what sells in that region, based on events in that region," Bagavathi said. "There are in-depth insights on seasonality and promotions. It’s highly customized and changes the way we plan."