If the past few months have taught us anything, it's that supply chain instabilities of the past several years are not going away. Driven by geopolitical tensions, tariffs, regulatory changes, and ingredient shortages, these disruptions are challenging to food and beverage industry manufacturers who are already operating in competitive markets with tight margins. While nearshoring and supplier diversification can alleviate supply chain disruptions to a certain extent, for companies with complex product formulations, there are often no quick fixes when an ingredient becomes unavailable.
For those companies that rely on unique ingredients to define their products, disruptions pose significant risks. Out of necessity, some companies have had to opt for smaller production runs, pass rising costs onto consumers, or replace ingredients with less than perfect substitutions. But today there are better options. Artificial intelligence (AI) offers innovative data and science driven solutions to reformulation, enabling companies to satisfy their customers, meet their standards and operate without interruption.
Here are some ways AI can help companies reshape product formulations, protect supply chains, and thrive in the face of change.
Shortages of rare ingredients
AI can address ingredient shortages by adapting recipes with new ingredients that preserve taste and quality. Science-based AI (SBAI) analyzes ingredient chemistry, process conditions and regulatory constraints to help you simulate formulation performance of replacement ingredients as well as optimize for regulatory compliance.
Take as one example, looking for a replacement for cocoa. Rising cocoa costs, climate volatility, and strict global regulations are forcing food and beverage manufacturers to rethink chocolate. The replacement must match the taste, aroma, mouthfeel and color. Instead of turning to a recognized substitute like carob, SBAI can help explore bioidentical molecules and predict how they will behave in formulations. This lets you cut time, cost and risk while maintaining product quality.
AI to help companies address a shifting regulatory landscape
The evolving regulatory landscape presents challenges for food and flavor companies, particularly when ingredients face bans or restrictions. Anticipating these changes and avoiding reformulation downtime requires proactive solutions. Traditional development methods for new additives are often slow and costly, but SBAI offers a faster, more reliable alternative.
By integrating scientific knowledge into AI models, SBAI ensures predictions align with physical and chemical realities, requiring less data to achieve accurate results. This approach has been successfully applied to predict environmental and biosecurity hazards and to predict fragrance performance and can be applied to flavor development. SBAI evaluates the safety of existing fragrances and flavors, suggests regulation-approved replacements, and reformulates recipes to maintain sensory consistency. If no approved alternatives exist, it can propose novel molecules, streamlining the development process and ensuring compliance with stringent regulations.
Recently new tariffs, which continue to be a moving target, have food importers worried about the possibility of sudden price increases or the ability to source ingredients due to trade restrictions. Take Brazilian coffee for example. Beyond actual coffee, coffee flavors are used in a variety of food products like liqueurs and desserts, savory dishes like sauces and marinades and snacks like chocolate and energy bars. AI can help you identify substitutions that match the flavor profiles, processing methods and quality in terms of texture and shelf stability.
How AI can support the need to alter products due to supply chain disruptions
AI accelerates innovation by analyzing vast datasets of chemical compounds, sensory profiles, and consumer preferences to create novel ingredient combinations. Machine learning models predict molecular interactions and sensory outcomes, reducing reliance on trial-and-error methods. This enables companies to develop sustainable, market-ready products more efficiently.
Beyond reformulation, AI enhances supply chain resilience by predicting demand and identifying reliable suppliers proactively. Real-time tracking and analysis of supplier performance allow companies to anticipate disruptions and implement risk mitigation strategies. By diversifying supplier options and optimizing procurement, AI helps maintain production continuity even in volatile conditions.
Conclusion
AI empowers food and beverage companies to turn supply chain disruptions into opportunities for innovation and competitive advantage. By leveraging SBAI for ingredient substitution, regulatory compliance, and product development, companies can maintain product quality and market presence. Proactive supply chain management, powered by AI’s predictive capabilities, further ensures resilience. As disruptions persist, adopting AI-driven solutions will be critical for companies to thrive in a dynamic global market.
