While the overall food tech market has seen a contraction in funding in 2022 as venture investors become more cautious, one area of companies that seems to continue to raise interest is those that leverage ML and other forms of AI to power CPG decision-making, product development, and core ingredient development.
Over the past couple of months, we’ve seen a bevy of startups raise funding, announce new products and tout their platforms for AI-powered CPG. Here are just a few examples:
NotCo
This week, NotCo, a Jeff Bezos backed startup with roots in Chile, announced a $70M Series D on a $1.5 Billion valuation. The funding will be used to launch the startup’s B2B business where it will open access to its AI platform to other CPG brands to accelerate plant-based CPG product development. The B2B platform launch comes after the company announced a new joint venture with Kraft Heinz earlier this year under which they have already launched plant-based versions of Kraft’s cheese slices.
StarDay Foods
StarDay, a startup which bills itself as a ‘next-generation food conglomerate’, just launched its third CPG product, a gut-friendly seasoned rice product. The company’s ‘Starday Insights Machine’ uses natural language processing, machine learning models, testing capabilities, and analytical insight tools to “identify and predict trends, derisk our investments, and speed up the product development process”. The company has raised $4 million in seed funding.
Verusen
Verusen’s approach to leveraging AI is to use it to help other CPGs create more resilient supply chains. The company claims it has created $30 million in “working capital optimization” for a global CPG brand (which it doesn’t name). Verusen says its platform “leverages artificial intelligence (AI), deep learning, data harmonization, and decision support to help global brands control risk, attain supply chain resiliency, and improve economies for their operations.”
Fractal AI
Fractal has created a CPG and retail-focused AI platform called Asper AI, which the company claims “unifies demand planning, sales and distribution, inventory planning, and pricing and promotion.” Fractal says its ‘autonomous decisioning platform’ can help CPG and retail companies achieve “10%+ potential growth opportunities in financial performance and more than 50% in the automation of decision-making.”
SymphonyAI
SymphonyAI has what it calls a “end-to-end, integrated AI-powered merchandising, marketing, and supply chain solutions for retailers and CPG manufacturers” which it recently used to help German retail giant Metro GMBH to optimize its SKU mix and find retail shelf space efficiencies for its Romanian storefronts.
Shiru
Shiru is building a B2B business for CPG brands who want to create plant-based meat and dairy alternatives. The company’s Flourish platform utilizes machine learning to mine a proprietary database with the goal of developing plant-based functional ingredients.
The interest in utilizing new approaches for CPG product development, supply chain optimization and ingredient discovery comes at a time of upheaval for the broader industry. Supply chain worries, persistent inflation, global geopolitical instability, and rapidly changing consumer tastes have all made modeling the future a much more difficult task, adding pressure on CPG brands and their retailers to shorten product development and planning cycles.
While it’s worth asking how many of these startups are utilizing true “artificial intelligence” or simply capitalizing on the desire among brands to re-configure their development process, there’s no doubt that leveraging the rapidly maturing and powerful AI technology that has reached the commercialization stage will be a trend that only intensifies in 2023.
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