The US government’s delays, implementations and suspensions of trade tariffs have sparked global confusion and sent the food and beverage industry into crisis management mode.
“The uncertainty surrounding President Trump’s tariffs, coupled with ongoing labour shortages, are creating significant pressure on food and beverage businesses,” says Georgie Thomas, managing director of food and beverage platform, Choco.
Added to this, manufacturers are grappling with rising production costs and spiralling commodity prices, resulting in ever-tightening margins.
For wholesalers and distributors, the tariffs on imported goods will increase costs for internationally-sourced products like fruits, vegetables, and beverages. These higher costs will cut profit margins and could result in increased prices for consumers. This is particularly true of small and mid-sized businesses that lack the purchasing power of larger operations. Distributors are also facing disruptions to their supply chains, as changes in import prices and availability of goods leads to inventory challenges. This is already delaying deliveries and impacting stock levels.
And manufacturers could feel the effects of Trump’s tariffs from consumers too. As food prices rise, consumers will likely reduce spending, particularly in price-sensitive categories such as alcoholic drinks, luxury food items and, sweets and snacks.
All this, Thomas says is leading companies to increasingly turn towards artificial intelligence (AI) as a solution to streamline operations and maintain profitability.
F&B accelerating switch to AI?
AI offers a critical advantage in the current economic climate by enabling businesses to automate tasks that don’t require human intervention.
“By offloading these repetitive processes to AI, companies can free up their employees to focus on more impactful work, like nurturing customer relationships and driving sales,” says Thomas.
This shift is especially important as businesses face rising costs from tariffs and ongoing labour shortages.
AI costs rising
While adoption of AI is likely to increase under Trump his, currently paused, tariffs will make the technology more expensive. This is because the cost of AI-reliant technologies such as server and data centre parts from supplier countries including Taiwan (32%) and South Korea (25%), will rise.
However, even this won’t slow the adoption of AI, says Jason Snyder, chief technology officer at Momentum Worldwide.
“They’ll speed up the scramble. Scarcity drives adoption and AI will feel more inevitable than ever,” he says. “The irony here is by making interest infrastructure more expensive, tariffs validate the value of AI. If companies are willing to pay more to access compute and GPU, it means that AI is essential, not optional.”
AI already reshaping food and beverage
Though still in its infancy, AI is has already had a dramatic effect on the food and beverage industry.
It’s advancing and accelerating scientific research, designing new products and their branding, streamlining stock management, and supporting regenerative agriculture through the evolution of green technology. It’s also improving the consumer experience through functions such as product recommendations.
AI tools are improving forecasting accuracy, enabling companies to better predict demand, optimise supply chains, and manage inventory. This is crucial at a time when the current tariff turmoil is sparking supply chain concerns across the world. This also helps to reduce food waste, saving money and supporting sustainability.
AI is also advancing food safety by improving contamination detection, ensuring product consistency, and optimising shelf life, another essential benefit as the tariff debacle places supply chains at risk and threatens global trade.
The future of AI in food and beverage
AI’s potential to revolutionise food and beverage is limitless.
Its greatest potential lies in automated food preparation, advanced consumer insights, and the rise of AI agents, explains Choco’s Thomas.
AI also has potential to gain deeper consumer insights by analysing large amounts of data on consumer preferences and behaviours.
“This will allow food and beverage companies to personalise experiences even further, whether through tailored recommendations, marketing adjustments, or product development based on emerging trends,” says Thomas.
Additionally, he predicts that AI agents – autonomous systems capable of executing tasks and making decisions – will begin to take on more responsibilities within food and beverage operations. These agents can manage tasks including order management, overseeing inventory, and even interacting with customers.
