Artificial Intelligence in Food Processing,

Asia-Pacific, 2019

Continuous AI Disruption will Transform the Food Processing Landscape

in the Region

Global Visionary Science Research Team at Frost & Sullivan

9AB8-88
May 2019
Contents

Section Slide Number

Executive Summary 5
 Key Findings 6
Introduction of AI in the Food Market 7
 Market Definition and Scope 8
 Global Food and Beverage Trends and Market Outlook 2019 9
 Embracing AI–Food Industry 10
 Role of AI in the Food Value Chain 11
 Why is AI the Perfect Solution for Food Processing? 12
 Key Questions this Study will Answer 13
Regional Comparison of AI Adoption in the Food Industry 14
 AI in the Food Industry—Key Trends and Application Areas in North America 15
 AI in the Food Industry—Key Trends and Application Areas in Europe 16
 AI in the Food Industry—Key Trends and Application Areas in APAC 17
Top 3 APAC Country Leaders 18
 APAC Food and Beverage Market Outlook 2019 19

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Contents (continued)

Section Slide Number

 China—Market Highlights of AI in the Food Industry 20
 China—Market Drivers for AI in Food Processing 21
 Japan—Market Highlights of AI in the Food Industry 22
 Japan—Market Drivers for AI in Food Processing 23
 Singapore—Market Highlights of AI in the Food Industry 24
 Singapore—Market Drivers for AI in Food Processing 25
Growth Opportunities and Companies to Action 26
 Growth Opportunity 1—Enhancing Quality and Safety across the Value Chain 27
 Growth Opportunity 2—AI-powered Digital Marketing Platform 28
 Growth Opportunity 3—Personalized Nutrition and Food-as-medicine 29
 Strategic Imperatives for Success and Growth 30
Companies to Watch in APAC 31
 Kirin—Beer that Learns 32
 Kewpie—Makes Baby Food Safer 33
 Ajinomoto—Selects your Perfect Recipe 34

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Contents (continued)

Section Slide Number

Conclusion 35
 Conclusion of AI Applications in APAC 36
 Legal Disclaimer 37
Appendix 38
 List of Exhibits 39
The Frost & Sullivan Story 40

Author: Shikhar Aggarwal

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 Executive Summary

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Key Findings

Total global expenditure on processed food and beverage products by final consumers is
forecast to reach $4.888 trillion in 2019 from $4.601 trillion in 2016. As it is a very high-
volume and low-margin industry, a growing number of F&B manufacturers are looking at 1
adopting AI to increase efficiency.

Application of AI across the food value chain has significantly improved supply chain
efficiency and transformed the food industry for many ecosystem participants. Key
application areas in food processing are food sorting, production line monitoring and
2
Key Findings

process optimization, equipment cleaning, and product development.

The United States has been actively developing and deploying AI technology, followed by
China and Europe. In APAC, China is leading AI adoption, driven by strong government
support, favorable market demand, and a thriving ecosystem.
3
In Japan, AI has started attracting attention beyond research institutes, and F&B
companies are already advancing in this field by incorporating AI in collaborative robots. In
Singapore, while AI is at an emerging stage, it presents lucrative opportunities for young 4
F&B start-ups.

AI is expected to be adopted rapidly by food companies in APAC in the near future to

improve feedstock sorting, find efficiencies, increase safety, and boost product
development.
5
Source: Frost & Sullivan

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 Introduction of AI in the Food Market

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Market Definition and Scope

Scope
APAC, North America,
Geographic Coverage
Europe
Study Period 2016–2019
Base Year 2018
Forecast Period 2019
Monetary Unit US Dollars, Japanese Yen

• This study looks at market trends driving the F&B industry globally. It further delves into the
ways in which AI has transformed the industry, with a special focus on applications and key
industry participants within the Asia-Pacific region.

• The market is defined as global expenditure by final consumers in US Dollars.

• Terms and Acronyms Used: Artificial Intelligence (AI); Food and Beverage (F&B);
radio frequency identification (RFID); Two-dimensional (2D) and Three-dimensional (3D);
Research and Development (R&D).
Source: Frost & Sullivan

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Global Food and Beverage Trends and Market Outlook
2019
• As global population demographics change, food and beverage trends are becoming increasingly specific with a preference
for natural, healthy, and convenient food.

4 Major
Food
Trends Snacking
Premium Natural or Personalization of
Quality Organic Food Food Products
• The processed food and beverage products or convenient food market, which includes all products sold at retail outlets to
final consumers, is highly fragmented and dynamic.
• Total global expenditure on processed food and beverage products by final consumers is forecast to reach $4.888 trillion in
2019 from $4.601 trillion in 2016. Going forward, the industry is expected to continue growing, mainly driven by the emerging
economies and their increasing population, rising income, and changing lifestyles.

Processed Food and Beverage Market: Revenue Forecast*, Global, 2016–2019

5,000
Revenue ($ Billion)

CAGR: 2.5% Year Revenue ($ Billion)

4,800 2016 4,601.08

2017 4,675.06
4,600
2018 4,768.56
4,400 F2019 4,887.77
2016 2017 2018 F2019
*From market perspective, it is revenue forecast; but from the final consumers’ perspective, it is expenditure forecast.
Note: All figures are rounded. The base year is 2018. Source: Frost & Sullivan

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Embracing AI–Food Industry

Key Takeaway: While there are many challenges for AI implementation in the F&B industry, development
of the technology infrastructure is in progress and increased adoption is expected in the near future.
Technological Hot Spots for F&B Investments,
Global, 2019–2025
AI in F&B Industry High RFID, 2D Predictive
Barcodes Maintenance
• The food industry is rapidly adopting new and Vision and
technologies. Advanced technologies such as Systems Analytics
robotics are widely being used across the food Cloud
Computing Artificial
value chain because of their transformational
Intelligence
benefits. Cyber
security
• To find new ways of improving efficiency,

Adoption Index
Collaborative
multinational food companies are turning to AI. In Virtual
Augmented 3D Robots
Medium Reality Printing
this high-volume and low-margin industry, even Reality
the slightest increase in efficiency can be a
crucial factor in determining whether a facility
records profits or incurs losses.

• Therefore, a growing number of F&B companies

are investing in AI adoption to increase food
processing efficiency without compromising on
quality. Impact Index
Low Medium High
Source: Frost & Sullivan

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Role of AI in the Food Value Chain

Key Takeaway: AI is revolutionizing the food value chain by significantly improving the supply
chain’s ability to shape and sense demand.

Application of AI across Food Value Chain

POST- FOOD RETAIL /

FARMING PROCESSING DISTRIBUTION CUSTOMERS
HARVESTING SERVICES

• Predictive • Food Sorting • Food Safety

Analytics on • Equipment Compliance
Environmental Cleaning • Shelf Management
Impacts
• New Product • Procurement Process
• Agricultural • Post-harvest • Demand
Development • Personalized Customer
Robots Storage Planning
and Product Service
• Crop and Soil Management Customization • Routes
Monitoring Optimization
• Autonomous
Vehicles Source: Frost & Sullivan

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Why is AI the Perfect Solution for Food Processing?
Use of AI in the food processing industry can improve numerous aspects of the process in an
Key Application Areas of AI
Food Sorting
Production Line Monitoring and
Process Optimization
Equipment Cleaning
New Product Development and
Product Customization
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effective and efficient manner.
Benefits
• Maximize yield and minimize waste
• Ensure that the sorted products are of high quality
• Reduce the risk of contamination, ensuring food safety
• Enable real-time decision-making from sorting results
• Ease of use and reliability
• Provide solutions for labor shortages and human errors
• Ensure cost-effectiveness and save time
• Increase profit for food processing companies
• Monitor asset health by collecting and analyzing sensor data, such as vibration
• Identify and fix faulty components before the machine fails
• Monitor production line variables throughout food processing
• Track food products through multiple stages of production
• Reduce equipment cleaning time by cleaning only as long as necessary
• Reduce usage of water, energy, and chemicals while protecting the environment at
the same time
• Mitigate hygiene risk
• Enable real-time assessment of cleaning requirements
• Aid in new product formulation based on customer preferences
• Customize products based on specific health and wellness requirements
• Tailor food products to specific demographics
• Rapidly process data for new product ideas
• Speed up product development
• Ensure cost-effectiveness by automating repetitive tasks
Source: Frost & Sullivan
12
Key Questions this Study will Answer

What are the major trends driving the F&B market globally, and in Asia-Pacific
specifically?

How big is the processed food market? Is it growing and if so, at what rate?
Key Findings

How widespread is AI adoption across the region and what are the factors influencing its
adoption rate?

How will AI implementation impact the processed food market?

What are future market challenges that can be addressed by AI technology?

Source: Frost & Sullivan

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 Regional Comparison of AI Adoption in the Food
Industry

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AI in the Food Industry—Key Trends and Application Areas
in North America
North America has the highest
growth potential in AI adoption in
the global food manufacturing
industry, bolstered by funding from
the government and venture capital
firms, presence of leading industry
participants, high adoption of AI
technologies, and market
readiness.
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Key Trends
• North America is expected to hold the largest share of the market
for AI applications in the food processing industry due to the rising
use of advanced and automated equipment.
• Given the increasing busy lifestyle of consumers in the region,
there is a high preference for processed food. However, in terms
of ingredients, food and beverage processing trends are moving
toward healthy and ethical eating, with consumers increasingly
demanding products that are good for their body as well as the
environment.
• AI is becoming a major force in the sustainable food movement,
with more American companies using the technology to minimize
waste while also ensuring food safety.
Key Application Areas
• AI-enabled technologies to maintain cleanliness and ensure
optimal cleaning.
• Product customization and new product development.
• AI-enabled quality analysis of food products based on color, size,
and shape.
• Collaborative robots (COBOTS) working in coordination with
humans at production plants.
Source: Frost & Sullivan
15
AI in the Food Industry—Key Trends and Application Areas
in Europe

Key Trends
• While overall, Europe is lagging behind the US and China in AI
deployment, it has the potential to play a leading role with the UK,
France, and Germany having a vibrant AI ecosystem.
• The food industry is one of the largest manufacturing industries in
Europe, with food processing leading the market share globally. A
high demand for healthy, ready-to-eat products among European
consumers is a major factor driving the food processing industry.
• Increasing demand for processed food coupled with the need for
innovation in food processing will drive the application of AI
technologies in the region to stay ahead of competitors globally.

Key Application Areas

Europe is an attractive market for
food and beverage manufacturers • Use of AI algorithms in agricultural farming.
due to easy access to local, high-
quality raw materials, large market • Personalization of diet based on health data.
size, and presence of an • New product development.
established regulatory
environment. • Autonomous food delivery on demand.

Source: Frost & Sullivan, European Union

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AI in the Food Industry—Key Trends and Application Areas
in APAC
Adoption rates for AI are growing
within Asia-Pacific, with a rising
number of start-ups calling the
region home, a sizable millennial
population, and increasing
government support to implement
Industry 4.0.
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Key Trends
• APAC is forecast to record the fastest growth in the AI market
during the next decade, and this growth is expected to primarily
come from China.
• With an increasing number of consumers becoming more
comfortable with the use of digital platforms to purchase food,
home dining options have increased. Moreover, a growing working
women population and increasing population aging have led to the
growth of convenient nutritional food preparation options.
• The rising demand for convenience foods is expected to drive
growth in the food processing market and will further increase the
need for efficient food manufacturing processes.AI technologies
enable such efficient solutions.
Key Application Areas
• Use of AI to ensure food safety in restaurants.
• Use of AI in the food services industry to personalize menu, take
order, accept payment, and record feedback.
• Automation of processes in food manufacturing plants.
• Farm management using crop analytics.
• Use of AI in mobile applications catering to gastronomical
desires.
Source: Frost & Sullivan
17
 Top 3 APAC Country Leaders

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APAC Food and Beverage Market Outlook 2019

The APAC region is driving the trend toward convenience foods owing to busy Rise in the demand for value-added convenience, processed
consumer lifestyles, growing working women population, increased in-home food is driving the food and beverage processing market in
dining options, and population aging. Major attributes that consumers look for emerging economies.
in convenience foods are ease of use, packaging, nutritional value, safety,
Market revenue for food and beverage processing equipment in
variety, and product appeal.
APAC is expected to record a compound annual growth rate
(CAGR) of 5.4% by 2019, indicating significant demand for
South Korea processed food in the region.
Convenience
Traceability
Ethnic Association Food and Beverage Processing Equipment Market:
Revenue Forecast, APAC, 2016–2019
China
18,000 CAGR: 5.4%

Revenue ($ Million)
Food Safety
Convenience 17,000
Traceability Japan
Convenience
16,000
Traceability 15,000
Population Aging
Thailand 14,000
India Convenience
Aspirational Living 13,000
Food Safety
Ethnic Association New Flavors
2016 2017 2018 2019
Convenience
Food and Beverage Processing Equipment Market:
Revenue Forecast, APAC 2016–2019
Singapore
Premium
Convenience Year Revenue ($ Million)
Population Aging
2016 14,951.6
Indonesia
Convenience 2017 15,653.3
Aspirational Living
Australia New Zealand Ethnic Association 2018 16,447.7
Convenience Population Aging
Traceability Traceability 2019 17,333.9
Population Aging Ethnic Association
Source: Frost & Sullivan

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China—Market Highlights of AI in the Food Industry

Key Takeaway: China is setting the pace for adoption of AI in the food industry by continuously
improving the quality of AI deployment across the F&B supply chain.
Overview of AI in China’s AI Innovations in China’s Food Industry
Food Market
Robot Restaurants AI Watchdogs
• China is a global AI frontrunner, with 60% of all AI
investments pouring into China in 2018. 32% of Restaurants using Using AI system to
all its companies implement AI technology, which AI-powered robots catch unhygienic
keeps the country ahead of USA (22%) and to deliver dishes chefs in action and
Japan (11%). directly to the send an alert to
• China’s AI market is led by the Internet giants, table, cleaner– administrators
Baidu, Alibaba, and Tencent, with all three bots replacing through a mobile
participants having their sights on the F&B cleaners, and an Robot.He, China’s first app, enabling real- Kankan uses facial and
almost automated robot restaurant. Image time action to be object recognition
industry.
kitchen source: Smart Shanghai taken technology.
• As food delivery volume in China is 10 times
more than that of the United States, application of
AI in this sector has been booming in this region
to deliver a seamless experience to the customer. Robotic Helping Hand AI-powered Food Delivery
Facial recognition technology to predict
customer’s orders, unmanned food delivery EZ Robot’s proprietary Autonomous food
vehicles, and analysis of best routes for food AI modules for AI- delivery vehicles
order delivery are some of the application areas. enabled robots have that choose the best
significantly improved route based on
• China has seen a considerable number of food
production efficiency, analysis of map
scandals in the last decade, and food EZ Robot Inc. has An unmanned food
inventory turnover, and data and take the
manufacturers are increasingly using AI and developed AI food delivery vehicle
equipment utilization in elevator to deliver
automation to improve food safety. manufacturing developed by
the food manufacturing food at the
machines. Meituan Dianping.
• Robotics and AI-calibrated food processing industry customer’s doorstep Source: Beijing Impact
Source: EZ Robot
machines is another area gaining popularity in the
F&B factory floor to facilitate automation and
easier collaboration among the workforce. Source: Frost & Sullivan, World Economic Forum

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China—Market Drivers for AI in Food Processing
Key Takeaway: Interest from investors, continuous support from the government, a large market size,
and concern for food safety will drive AI applications in China’s food processing industry.
• China’s New Generation Artificial
Intelligence Development Plan is aimed at
Supportive the country becoming the world leader in AI
Regulatory by 2030 by building a domestic AI industry
worth $150 billion.
Environment
and • The policy outlines a national AI strategy
Government with specific measures to accelerate its
Policies integration.
• The government also actively incentivizes
private venture capital (VC) investment in
AI through ‘guiding funds’ that utilize a part
of public funds.
• Food safety has become a top concern for
consumers in China when buying food or
dining in restaurants. Application of AI in
High Concern food processing ensures contamination-
for Food Safety free production areas and eliminates the
risk of food recalls.
• Increased publicity of food safety
problems and government willingness to
address the issue have also created an
enabling environment for reforms in the
food processing industry.
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• In response to the increased demand for
processed food, many Chinese F&B firms
Increased will transition from mechanical food
Demand for processing to AI-automated food
Processed and processing to increase output efficiency
and boost product development.
Convenience
Food • With China projected to account for nearly
40% of all new food processing
machinery, application of AI in food
processing will increase rapidly.
• China’s enormous market size generates
large volumes of data that fuels the need
for AI.
Availability of • Chinese F&B companies have a large
Large Volumes domestic population to draw on data, with
of Data 1.1 billion mobile Internet devices on 4G.
This enables companies to easily derive
insights into consumers’ food preferences
and assists in new product development.
Source: Frost & Sullivan
21
Japan—Market Highlights of AI in the Food Industry

Key Takeaway: AI has started to gain attention in Japan beyond research institutes, and F&B
companies are already advancing in this field.

Overview of AI in Japan’s Food AI Innovations in Japan’s Food Industry

Market
AI-assisted Inspection Personalized Food App
• Japan is the second nation after Canada to
adopt a national AI strategy. AI-assisted food A mobile
inspection application
• The Japanese government established an processes food providing targeted
Artificial Intelligence Technology Strategy faster with near- supplement
Council in 2016 and an Artificial Intelligence perfect accuracy recommendations
Technology Strategy in 2017, with the aim of without and aligning Nestlé Japan used AI
leveraging AI technology for multiple sectors, compromising Kewpie uses AI to products more to analyze a meal’s
including healthcare and mobility. quality inspect ingredients it closely with users’ nutritional content and
uses in baby food. suggest supplements.
• With this strategy, Japan hopes to trigger a nutritional needs
Source: GoogleBlog Source: Nestle Japan
robotics revolution by shifting its focus from
manufacturing the robots themselves to
establishing an AI-equipped network of robots
that can communicate with each other.
AI-developed Snack Food Robotics
• Several Japanese F&B companies are New flavor chosen by Food robotics using
already using AI technologies to enhance an AI program that AI is becoming
products or create new product categories, analyzes data based increasingly
and this trend is expected to continue. on consumer popular to optimize
preferences toward food preparation,
• Population aging contributing to labor
ingredients, resulting in cooking, and
shortage is driving Japan to automate its Miso Robotics has invented
a new product before Lotte’s new calamansi delivery a robot that uses AI to
restaurants while not stripping away the flavor was chosen by an
competitors do properly cook a hamburger.
country’s well-known human touch. AI program. Source: Source: Miso Robotics
Japan Trend Shop

Source: Frost & Sullivan

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Japan—Market Drivers for AI in Food Processing
Key Takeaway: The Government of Japan prioritizes AI technology to drive its industrial productivity
as the nation grapples with a declining labor force and an aging population.
• Many Japanese companies, particularly
start-ups, teaming up with international
firms to offer platforms with unique AI
solutions are expected to be able to
Market
address local needs.
Potential
• Artificial Intelligence is increasingly
entering a commercialization phase in
Japan, with a projected return of JPY
121 trillion by 2045.
• The Japanese government has launched
an initiative to support joint AI projects
between start-ups and large firms, with 20
Government projects already selected for funding up to
JPY 200 million.
Initiatives
• The government also plans to facilitate
research in the AI field by providing funds
to priority fields while unifying data
formats and standards from various
industries to enhance the ability to utilize
Big Data techniques in the country.
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• As Japan’s population shrinks,
productivity must be raised. Therefore,
there is a strong demand for the
Decline in
development of AI-equipped robots to
Labor Force replace human workers in the factories.
and Population
Aging • Population aging in Japan is also driving
more investment in technologies such as
AI and robotics to make up for a decline in
the labor force, especially in
manufacturing industries.
• Deep learning ties in with sensor
technology and robotics, and with Japan’s
existing strength in hardware, it can use it
Existing to its advantage for further progress in AI
Strengths in AI development.
Ecosystem
• Japan is also a world leader at quantum
computing that uses the power of atoms
to process data instead of transistors
used in binary digital computers and
related to AI applications.
Source: Frost & Sullivan
23
Singapore—Market Highlights of AI in the Food Industry

Key Takeaway: Singapore is well-placed to integrate food innovation and technologies into the wider
economy ahead of other larger economies, complementing its vision to be a smart nation.
Overview of AI in Singapore’s AI Innovations in Singapore’s Food Industry
Food Market
AI-powered Restaurants AI Cooking Machines
• Businesses, start-ups, and the government in
Restaurants
Singapore have been taking serious steps to Auto-cooking machines
offering F&B digital
position themselves as leaders in the AI that can be AI-
ordering systems
market. programmed to whip
using AI to make
up a variety of high-
• Although AI technology is in an emerging personalized menu
quality Chinese dishes
stage, Singapore presents great opportunities recommendations TabSquare has grown to TungLok’s AI cooking
be the leading in- with minimal human machines increase
for young F&B start-ups in the industry. and boost
restaurant technology effort and at more than productivity
revenues for
• Several global AI firms that are already at the provider 3 times the speed of Source: Today
restaurants
forefront in the field have made Singapore a Source: TabSquare veteran chefs Online/Ernest Chua
base for their regional operations.
• The Singaporean government has identified
AI as one of the four core technologies AI-programmed Mobile Apps Robot Delivery Waiter
essential to the country’s push toward Autonomous robots
building a digitally-enabled workforce for the Use of AI to that not only serve
food service industry. match uploaded food and drinks,
photos of food to but also interact
• In addition to attracting international AI talent
a database of with customers,
and investment, Singapore is building a
common local JurongHealth Food Log thereby adding a
pipeline of AI training programs to position Techi robot does menial
dishes to check app, a new application for more human
itself as a base for nurturing AI expertise not tasks so that service
how healthy the people diagnosed with element to the
only for itself, but for the entire Asia-Pacific staffs can focus on their
meals are for pre-diabetes customer
region. key roles
Source: Straits Times/Rei experience
consumption Source: Techmetics
Kurohi

Source: Frost & Sullivan, Economic Development Board Singapore

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Singapore—Market Drivers for AI in Food Processing
Key Takeaway: Singapore is driven to develop AI capabilities in the F&B industry by its supportive
government, consumer demand, declining growth of local workforce, and innovative local ecosystem.
• As one of Asia’s food capitals, there is a
demand for novel food options in the
nation, alternatives that provide
convenience, new flavors, and
Increasing
personalization. This requires application
Consumer
of new technologies such as AI for F&B
Demand for
participants to remain relevant to their
Options
market and customers.
• Singapore is a great test bed for AI
companies, where the developed market
allows start-ups to go through a thorough
R&D phase before scaling, facilitated by
the nation’s wide AI talent pool and strong
intellectual property (IP) expertise.
Conducive
Environment • Availability and access to Machine
for Innovation Learning techniques and infrastructure,
increased experimentation by businesses
and corporations to adopt AI solutions,
and capital availability to fund these start-
ups and projects also make it a potential
active AI landscape.
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• Beyond 2020, Singapore’s workforce
growth is expected to slow down to 1%
per annum as the population ages.
Hence, automation in the F&B industry is
a potential solution for manpower scarcity
Slow Growth of
in Singapore.
Local
Workforce • Moreover, the country aims to be
competitive, enhancing the quality of job
growth by embracing technology and
creating innovative solutions using data
analytics, AI, and design thinking.
• AI initiatives by the Singaporean
government have succeeded in providing
a supportive ecosystem that allows
Government’s commercial efforts, regulations, and
Smart Nation innovation to go hand in hand. Some of
Initiative the initiatives rolled out to develop its
ecosystem are AI for Everyone (AI4E)
introductory program, AI for Industry
(AI4I) program, and formation of an.
Advisory Council on the Ethical Use of AI
and Data.
Source: Frost & Sullivan
25
 Growth Opportunities and Companies to Action

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9AB8-88 26
Growth Opportunity 1—Enhancing Quality and Safety
across the Value Chain
Key Takeaway: AI can address major safety concerns of today and
Vision Transformation
Mega Trends’ Impact
Disruptive Applications
Business Models
Current Offerings
New Capabilities
Value-added Services
Vertical Integration
Geographic Expansion
Partnerships
Investment/M&A
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production demands of tomorrow.
Context and Opportunity
• Concerns with food perishability and
safety require smart solutions, given
the scale of a production, processing,
manufacturing, and distribution facility
in the F&B industry.
• Food production needs to increase by
70% to meet the needs of 10 billion
people by 2050, thereby putting
significant pressure on F&B
manufacturers and regulators.
• AI is already making inroads in
improving safety and efficiency. This
can translate into wider profit margins,
which is crucial in a razor-thin
industry.
Call to Action
• AI is applicable across the entire value
chain, from integrating meteorological
data for crop management to
calculating optimal distribution routes
to real-time monitoring of inventory.
• Partnerships with biotech institutes
foster innovative ways of improving
food safety and quality. For example,
IBM and Cornell are collaborating to
develop an AI-based technology that
can detect bacterial contamination
based on their DNA signature.
• Other application areas include food
sorting to distinguish ingredient quality
based on visual attributes, e.g. The
TAMRA sorter.
Source: Frost & Sullivan
27
Growth Opportunity 2—AI-powered Digital Marketing
Platform
Key Takeaway: AI is poised to transform the marketing space by high-level targeting and
prediction of upcoming market trends.
Vision Transformation
Context and Opportunity
Mega Trends’ Impact
• Consumers, particularly the growing
Disruptive Applications millennial population, value the ability
of providers to personalize their
Business Models products and experiences.
• Moving forward, a more individualized
Current Offerings and fine-tuned approach, as well as
the ability to foresee and shape
New Capabilities trends, will provide a competitive edge
to enterprises that market directly to
Value-added Services consumers.
Vertical Integration • With the ability to synthesize patterns
from an endless combination of
Geographic Expansion consumer preferences, AI applications
will be essential in providing next-level
advertising solutions delivered through
Partnerships
digital marketing platforms and
services.
Investment/M&A
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Call to Action
• Solution providers need to develop a
comprehensive, data-driven marketing
solution that can not only target a
specific demographic group at a
specific time, but also predict their
behavior based on upcoming market
trends.
• For F&B manufacturers, this data can
be leveraged for new product
development and improvement of
existing product lines.
• The UK-based digital marketing
agency, YouYaa utilizes AI technology
to perform smart-targeting ads,
packaged in an intuitive and easy-to-
use platform.
Source: YouYaa, Frost & Sullivan
28
Growth Opportunity 3—Personalized Nutrition and
Food-as-medicine
Key Takeaway: AI use will continue to flourish within the intersection of F&B and healthcare through
integration with wearable devices, biosensors, and personalized nutrition.
Vision Transformation
Context and Opportunity
Mega Trends’ Impact
• Rising prevalence of metabolic
Disruptive Applications syndromes such as obesity and
diabetes, particularly in APAC, is
Business Models spurring the movement toward healthy
eating.
Current Offerings • Consumers are turning to freedom
food and healthier options and are
New Capabilities increasingly aware of the value of food
as medicine.
Value-added Services
• The combination of AI, Machine
Vertical Integration Learning, integrated biosensors, and
IoT will make it possible for
Geographic Expansion consumers to have personalized and
medically precise nutrition plans
based on their fitness level, age, risk
Partnerships
of disease, and other biometrics.
Investment/M&A
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Call to Action
• Wearable biosensors can provide non-
invasive, real-time monitoring of fluids
such as sweat and saliva. The
technology to monitor metabolites is in
early stages of development and will
be a key area of interest for F&B
industry stakeholders.
• Continuous monitoring of sensitive
biological data necessitates an
intelligent and secure data processing
protocol, for which AI will be
immensely useful.
• The increasing popularity of freedom
food and personalized nutrition will be
further boosted by the integration of
F&B, healthcare, and AI technology.
Source: Zipongo, Frost & Sullivan
29
Strategic Imperatives for Success and Growth

The potential for AI to transform the F&B industry is high, given its applicability
in every step of the supply chain, from crop production to processed ingredient
manufacturing to distribution.

Key application areas that can immediately benefit from AI are in ensuring food
quality and safety through object recognition and identification of
contaminants, particularly in large production plants and processing facilities.

Critical With the explosion of data on consumer behavior and a shifting trend toward
Success personalization, AI-powered marketing platforms can provide a targeted,
Factors customized approach to attract consumers.

Healthcare applications will depend on AI to provide secure, responsive, and

clinically relevant alerts, which can be tied to nutritional needs and preferences
customized for each consumer.

Partnerships between tech firms and research institutes will foster innovations
that will address major concerns of food production in the next 30 years.

Source: Frost & Sullivan

9AB8-88 30
 Companies to Watch in APAC

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9AB8-88 31
Kirin—Beer that Learns
Company
Founded: 1885
Headquarters: Japan
The Japan Brewery Company
Limited, the forerunner of Kirin
Brewery first began marketing
Kirin Beer in 1888. Kirin
Brewery, the second-largest
brewery in Japan behind
Asahi, partnered with the
Mitsubishi Research Institute
for its AI application in its
brewing process. Kirin
Brewery sells two of the most
popular beers in Japan: Kirin
Lager, one of the country's
oldest beer brands, and
Ichiban Shibori.
Image Source: Kirin Ichiban
9AB8-88
AI Implementation
The company uses a
Machine Learning program to
calculate an optimum
brewing formula based on 20
years worth of test data. The
perfect beer developed is
determined by flavor, aroma,
color, and alcohol content
desired by consumers. The
use of AI in beer production
has shortened product
development time and
reduced professional training
time in an efficient manner.
Currently, Kirin is looking at
developing new products
based on changing consumer
tastes to stay competitive.
Source: Frost & Sullivan
32
Kewpie—Makes Baby Food Safer
Company
Founded: 1919
Headquarters: Japan
Kewpie Corporation, through
its subsidiaries, engages in
the manufacturing,
wholesaling, transporting, and
warehousing of food products
in Japan and internationally. It
offers condiments including
mayonnaise and dressings
and processed food such as
baby food. The company uses
Google’s AI technology, i.e.
TensorFlow to manufacture
safe baby food.
Image Source: Rakuten
9AB8-88
AI Implementation
The company uses AI to
inspect anomalies in
ingredients used in baby food
such as distinguishing good
diced potatoes versus the
bad ones using deep learning
and computer vision
approach. The system gets
trained by thousands of
photos to visually identify
anomalies, such as sub-par
potatoes. In real-time
production environments, the
results have noted to be
near-perfect accurate, and
the company now plans to
expand the use of AI-based
approach across its wide
range of food products.
Source: Frost & Sullivan
33
Ajinomoto—Selects your Perfect Recipe
Company
Founded: 1907
Headquarters: Japan
Ajinomoto Co., Inc. is a
Japanese food company that
manufactures seasonings, coo
king oils, frozen food, and
beverages. In 1909, Ajinomoto
Co., Inc. released its
fundamental food product, the
umami seasoning, Ajinomoto.
Ajinomoto launched its AI
service after a survey found
out that customers were
finding it a burden to find the
right combination for their
dishes.
Source: Amazon
9AB8-88
AI Implementation
Uses AI to select the perfect
recipe for a dish based on
the consumer’s taste
preference. A website with a
variety of themes including
nutritional value and the time
taken to cook a dish has
been dedicated to customers
searching online recipes.
Based on the customer’s
choice of an appealing dish,
the AI system will suggest
two desirable meal
combinations from its
database of 10,000 recipes.
Source: Frost & Sullivan
34
 Conclusion

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9AB8-88 35
Conclusion of AI Applications in APAC

Overall, APAC is in an early stage in terms of use of AI in food processing

applications. Although companies have adopted AI in the region, the
applications are still in a nascent stage and the numbers are limited.

China and Japan are more aggressive as front-runners in APAC in adopting

new AI applications in food processing, especially in the food safety area,
whereas Singapore demonstrates great enthusiasm with regard to the
application of AI in the food industry.

There are a growing number of new entrants in the food processing market. A
large number of start-ups are striving to innovate AI applications to cater to
specific fields, with many of these forming partnerships or collaborating with
established companies.

Practical application of AI technology, combined with cost, performance, and

food manufacturer acceptance, continues to pose challenges in the wider
adoption of AI across the region. Moreover, the lack of highly skilled data
science personnel and AI domain experts hinders adoption.

However, it is expected that AI technologies will soon be increasingly used by

food companies in APAC to improve feedstock sorting, find efficiencies,
increase safety, and boost product development.

Source: Frost & Sullivan

9AB8-88 36
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9AB8-88 37
 Appendix

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9AB8-88 38
List of Exhibits

Exhibit Slide Number

Processed Food and Beverage Market: Revenue Forecast*, Global, 2016–2019 9

Technological Hot Spots for F&B Investments, Global, 2019–2025 10

Food and Beverage Processing Equipment Market: Revenue Forecast, APAC, 2016–2019 19

9AB8-88 39
 The Frost & Sullivan Story
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