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When it comes to artificial intelligence (AI), the past year has been aspirational, but ultimately unsuccessful, says Athina Kanioura, who was named PepsiCo’s first chief strategy and transformation officer in September 2020. But she is optimistic about 2023.
“Think of how we started with the metaverse and the use of AI, suddenly it crumbled into pieces,” she told VentureBeat. “In AI, we tend to see what doesn’t work the first time, then we lose hope — but I think 2023 should be a year of hope and focus for AI.”
That includes at PepsiCo, said Kanioura, who joined the third-largest consumer packaged goods (CPG) company — with familiar global brands including Pepsi, Lay’s, Cheetos, Quaker and Gatorade — after a dozen years at professional services firm Accenture. There, she served most recently as the firm’s chief analytics officer and global head of applied Intelligence, to help clients capitalize on AI at scale.
PepsiCo, she explained, is “extremely passionate” about AI and, when she joined, put statistical information, digital data and AI under one umbrella to grow the company “exponentially” and “drive a different PepsiCo going forward.”
That seems to be coming from the top: Just a month ago, in remarks accompanying the company’s third-quarter 2022 financial results, PepsiCo CEO, Ramon Laguarta, and chief financial officer, Hugh Johnston, said the company is focused on “automating and digitizing our supply chain to support our innovation pipeline with greater agility and speed-to-market.”
Three key segments
AI at PepsiCo — from cognitive science and machine learning (ML) capabilities to data lakes and clouds— is organized within what Kanioura calls a “human framework” and bucketed into three key segments.
One is the use of AI to enhance the human experience and facilitate what is happening on the ground. For example, PepsiCo uses AI monitoring for predictive asset maintenance, quality and safety of employees in factories, warehouses and distribution centers.
“There are control towers, sensors in their devices, their machinery, to prevent safety risks for our employees, for quality control and to prevent any damage to the parts,” she explained. “Through these AI systems we protect employee well-being, and second, we give them visibility to how they can do their job more efficiently — so there’s a huge importance for us from a supply chain and operations perspective.”
PepsiCo also uses AI to accelerate company growth by identifying “whitespace” when thinking about new product categories — including by analyzing consumer sentiment.
“With this type of data, in less than a year we created Off The Eaten Path seaweed snacks, which is actually going well,” she said.
AI insights also showed that consumers were interested in immunity, which led to Propel, with immunity-boosting ingredients, six months later.
“This is how you can use AI to drive the next generation of products and growth,” she added.
In addition, AI is used to boost sustainability.
“AI is an integral part of the future mission of the company, which is a positive outcome, a better planet, for our employees, for our children, for our communities,” she said.
For example, as one of the biggest potato producers in the world (for brands such as Frito-Lay), PepsiCo uses AI to provide farmers in North America, Latin America and Europe with over a million key data points about the potatoes they plant and offer insights about crops — such as how deep seeds should be planted based on weather conditions, how much to water, how to protect the crop and how to optimize yields.
“That has led to much more sustainable practices,” she said.
Digital hubs drive PepsiCo success
A year ago, PepsiCo established the company’s first two digital hubs in Barcelona, Spain and Dallas, Texas, and was expected to create more than 500 data and digital jobs over the next couple of years, to “greatly influence the way the organization reinvents planning, making, moving, selling and delivering products.”
At the time, PepsiCo said the hubs would help the company move toward a future vision of customers by allowing professionals to have real-time access to sales and inventory data, consistent product availability in the right place, and employees would also be able to use predictive decision-making tools.
But no matter where AI is used throughout PepsiCo, Kanioura said all employees operate under the same responsible AI framework.
“We have one responsible AI framework that everyone abides by, from how we design the systems to how we input the data, process the models, audit the models while they run and finally to the post-processing,” she said. “The principles apply to everyone within my team and we have a committee that makes sure this process is run in a consistent way across the organization.”
The future of AI at PepsiCo and beyond
Kanioura and other AI leaders at PepsiCo are active in providing industry perspective and recommendations to regulatory bodies, including the Congressional AI Caucus and NIST, she added.
“What ethical AI framework should be applied, what are the processes and prerequisites you need for a viable framework for an organization, what is the role of the industry versus the technology provider versus the government,” she said. “I believe if you have different parties…sitting together, this will be a benefit to putting together a regulatory framework.”
For PepsiCo, Kanioura emphasized that the mission of AI is to drive the next generation of growth for the company, but within the context of human experience.
“I think 2023 will be a year when I expect to see further consolidation, with much more concentrated investments in key areas of AI where it will be beneficial for the masses and across industries, rather than futuristic capabilities,” she said. “I think the industry has realized we need to do things where everyone can benefit — you hear that in the discussion from many of the tech companies, they say let’s focus on the core of AI.”
In addition, she said that the future of AI at PepsiCo will be about scalability and industrialization.
“For many years we’ve done many experiments, many proof of concepts, because some AI areas weren’t mature enough,” she said. “Now, if we are thinking about AI for integrated business planning, we’re doing it at scale. R&D will use it at scale.”
It’s important, she concluded, to take stock of what has been a challenging year overall and rethink some AI strategies.
“In 2023, there is a huge hope for what AI can do for society,” she said. “We shouldn’t forget about how during COVID-19, AI was used for precision medicine, and there is a huge hope for AI in precision agriculture, we are using it — it’s an amazing unlock of what AI can do.”
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