Need to Know

• As it has become more popularized, artificial intelligence (AI) is being used in the beverage industry for a variety of instances, such as formulation and marketing.
• Beverage brands can use AI to help with potential consumer feedback on new products.
• While AI has its benefits, experts note the importance of human feedback, especially because beverages are a sensory-based product.

“Now, it’s being used throughout the product development cycle, from precision formulation to improving manufacturing efficiency,” he says. “One of its biggest benefits is the ability to connect vast amounts of information across internal and external data sources. By bringing together disparate data, we’re able to design better experiments, identify gaps we might not have recognized and draw different conclusions.”

The result is better-informed decisions, more efficient operations and faster innovation, Knutson states.

Kaleigh Theriault, director of BevAl thought leadership at NielsenIQ (NIQ), Chicago, shares that a clear sign of AI advancement is how quickly consumers have adapted AI into their purchase process.

“Research NIQ conducted with Kearney found 74% of consumers are using AI for some part of product discovery,” she says.

AI is helping the supplier side, too.

“Innovations can now be developed and tested in days, with minimal capital required, which lowers the barrier for startups,” Theriault notes. “NIQ’s BASES AI Screener, for example, uses synthetic respondents trained on real consumer behavior to provide predictive feedback on an RTD (ready-to-drink) concept in under five minutes.”

On the sales side, she says AI can help suppliers and distributors become more predictive, helping companies identify growth opportunities and make better decisions across accounts, channels and promotions.

Sally Lyons Wyatt, global advisory for consumer goods and foodservice at Circana, Chicago, shares that AI has evolved from primarily a data-analysis tool to a creative and decision-support partner.

“Today’s generative AI can create content, develop concepts, identify flavor opportunities and help brands innovate faster,” she explains. “Emerging agentic AI can even help consumers discover and purchase products on their behalf. In fact, consumers are beginning to experience AI through personalized recommendations, easier product discovery, improved online shopping experiences and more relevant product suggestions based on their preferences, lifestyle goals and consumption habits.”

For beverage manufacturers, Lyons Wyatt says AI is no longer simply a reporting tool.

“It is becoming an end-to-end innovation and decision-support platform, influencing everything from flavor development and demand forecasting to personalized marketing and commerce,” she notes.

All in on AI

When it comes to consumer habits, AI also can offer beverage-makers detailed insights.

“AI can analyze enormous amounts of information simultaneously, including purchase behavior, social conversations, search activity, reviews, weather patterns and retail data,” Lyons Wyatt says. “This allows beverage manufacturers to identify emerging trends much earlier than traditional consumer research methods. For non-alcoholic beverages, AI can reveal growing demand for benefits such as hydration, functional energy, protein, gut health, metabolic wellness or clean ingredients.”

As for alcohol, she says AI can help uncover emerging preferences around flavor profiles, premium offerings, moderation and low- and no-alcohol alternatives.

“Consumers benefit because products become more aligned with their evolving needs,” Lyons Wyatt notes. “Instead of manufacturers reacting to trends after they become mainstream, AI helps them identify changing preferences much earlier, leading to products that better reflect consumer interests and lifestyles.”

Cargill’s Knutson shares similar thoughts.

“With AI, we can filter out the noise, prioritize the most relevant insights and define whom we’re designing for earlier in the development process,” he says. “Work that once took weeks can now happen in a fraction of the time, enabling teams to focus on refining and advancing the strongest ideas. However, even as AI helps guide more targeted concepts and accelerate product development, it remains essential that we validate its guidance with consumer research and in-person feedback.”

As AI evolves, experts note the benefits of using the technology during new product development.

“AI can analyze flavor reviews, cocktail recipes, search behavior, social media discussion and POS movement together to identify whitespace opportunities, helping accelerate RTD innovation, non-alcoholic products, premiumization trends and flavor launches,” NIQ’s Theriault shares. “Trends such as spicy Margarita RTDs, espresso martinis, non-alc spirits and functional or adjacent beverages are increasingly informed by data rather than intuition alone.”

In a shrinking market, she states that innovation is what builds loyalty, recruits new consumers and sustains engagement.

“AI is pointing that effort where demand already is,” Theriault says. “RTDs deliver 38% of innovation dollars while accounting for just 22% of innovation items. The characteristics of winning products are specific: canned packaging, non-carbonated options, vodka-based offerings. Knowing that before you commit to a launch is the difference.”

Circana’s Lyons Wyatt also notes that AI can accelerate innovation by predicting successful flavor combinations, identifying unmet needs, optimizing formulations and evaluating potential concepts before significant investments are made, while also reducing development timelines.

“For alcohol manufacturers, AI can also help evaluate flavor concepts, package designs and marketing approaches while staying within regulatory requirements,” she says. “Beverage alcohol companies can use AI to better understand age-appropriate consumer preferences and emerging drinking occasions among legal-age adults. Consumers may see more relevant innovation, more frequent product introductions and beverages that better align with specific needs, whether that’s functional hydration, cognitive support, premium cocktail experiences or alcohol-free alternatives.”

Applications for AI are used throughout the product development cycle, Cargill’s Knutson shares.

“Early on, it can help teams generate more targeted ideas and create strong starting points for formulation, reducing trial and error,” he says. “As we move to benchtop work, AI-enabled ingredient informatics and sensory science innovations help us compress formulation cycles from months to days, enabling teams to explore more options before costly prototyping. This includes tools that help us predict sweetener blend performance and sensory perception across applications, accelerating prototype validation.”

AI also can give team members greater independence in their day-to-day work, Knutson adds.

“For example, formulators can explore how ingredient proportions may affect a Nutrition Facts panel, reducing reliance on other teams and shortening development timelines,” he notes.

The benefits extend beyond ideation and formulation, Knutson says.

“By connecting R&D decisions with manufacturing, supply chain and cost considerations earlier in the process, AI can help teams design solutions that are both innovative and feasible at industrial scale,” he states. “There’s also huge value in leveraging AI to help accelerate onboarding and training. While AI can’t replace human expertise, it can help our teams focus on high-value work.”