Generative AI Radar — Consumer packaged goods

Insights

• Generative AI spending growth by CPG companies lags most industries, Spending by CPG companies is set to grow by 65% in 2024.
• Most CPG companies have yet to implement or generate value from generative AI (61%).
• While mostly positive, more CPG companies are negative about generative AI’s impact on business.
• Concerns about ethics, bias, fairness, and data privacy are the biggest obstacles to generative AI adoption.
• Only 57% of CPG companies are positive about managing and controlling generative AI systems.

This year will bring further developments in generative AI, as organizations familiarize themselves with this transformative technology. So where are they now?

Through this study, we aimed to uncover how companies use generative AI, how much they spend on it, how it’s being rolled out, and where it makes an impact. We looked at 3,000 companies across 12 industries:

• Automotive
• Consumer packaged goods
• Energy, mining, and utilities
• Financial services
• Healthcare
• High tech
• Insurance
• Life sciences
• Logistics and supply chain
• Manufacturing
• Retail and hospitality
• Telecommunications

Many companies told us they are already spending significant sums of money and are set to spend more this year. However, this pattern isn’t the same across sectors. In this data book, we highlight how consumer packaged goods (CPG) compare with the rest of the pack.

Generative AI spending

Generative AI spending growth by CPG companies lags most industries

Spending by CPG companies is set to grow by 65% in 2024 — CPG companies plan to increase generative AI spending. However, their spending growth ranks in the bottom third among all industries.

CPG generative AI spending

Expected generative AI spending growth in 2024 by industry

Generative AI adoption

CPG companies lag in generative AI adoption

Fewer CPG companies have created business value with generative AI — Only 4% of CPG companies have generated business value with generative AI, significantly less than the overall (13%).

Most CPG companies have yet to implement or generate value from generative AI — 61% of CPG companies have either not started any generative AI initiatives or are still in the experimentation stage.

Generative AI adoption by proportion of respondents

Content generation drives generative AI optimism for CPG companies

CPG companies less enthusiastic about generative AI impact than the overall trend

Improved content generation and creativity capture the CPG industry’s attention — CPG companies are significantly less optimistic about generative AI’s impact on user experience, automation, and product development, compared to the overall trend.

Where companies expect generative AI to have the most positive impact

CPG companies are upbeat about generative AI’s impact

However, CPG companies are more negative than the overall trend

While mostly positive, more CPG companies are negative about generative AI’s impact — 14% of CPG companies expect generative AI to have a negative impact on business areas, higher than the overall trend (8%).

Expected generative AI impact on business areas by proportion of respondents

Obstacles to generative AI adoption

More CPG companies are concerned about ethics and bias than the overall trend

Concerns about ethics, bias, fairness, and data privacy are the biggest obstacles to adoption — CPG companies identify ethics and bias (28%) and data privacy (28%) as their top challenges. These concerns are notably higher in the CPG sector compared to the overall trend.

Challenges in implementing generative AI

Confidence in managing generative AI systems

Only half of CPG companies are positive about managing and controlling generative AI systems

Fewer CPG companies are confident in managing generative AI than the overall trend — Only 57% of CPG companies are positive about ability to manage generative AI, compared to 72% of the overall trend.

Confidence in ability to manage generative AI by proportion of respondents

Primary sponsor of generative AI initiatives

Generative AI sponsorship is less clear for CPG than the overall trend

More CPG companies have yet to designate a sponsor — 22% of CPG companies report that they are yet to determine sponsors for generative AI initiatives, more than double the overall trend. 21% CPG companies report CIOs as sponsors, less than the overall trend (29%).

CPG CMOs take more lead on sponsorship than the overall trend — Generative AI sponsorship finds more ground with CPG chief marketing officers (CMOs) (9%) compared to the overall trend (4%).

Primary sponsor of generative AI initiatives by proportion of respondents

Who leads on generative AI?

Chief information security officers are the top policy maker

More CPG CISOs lead on generative AI policy than the overall trend — 26% of CPG companies reported that chief information security officers (CISOs) are responsible for generative AI policy, significantly higher than the overall trend (16%).

CPG CIOs less involved with policy compared with the overall trend — Only 15% of CPG companies reported chief information officers (CIOs) as their generative AI policymaker, less than the overall trend (25%).

Primary generative AI policymaker by proportion of respondents

Download