Leveraging Artificial Intelligence To Tackle Theft And Waste In The Food Industry: How Startups Are Captivating Early Adopting F&B Operators As AI continues to reveal its potential across every industry, we remain focused on harnessing its power to improve productivity and ingenuity to address decades-old problems plaguing the industry we love so dearly.

The world is rapidly witnessing the unprecedented impact of artificial intelligence (AI) as it moves to rapidly transform various industries at breakneck speed. And the food services (F&B) sector is no exception.

Recently, news about the edtech startup, Chegg, made rounds about the sudden (47%) drop in market value following commentary in the company's earnings report about the threat it faced from AI tools like ChatGPT. In an age of disruption, many more such stories will surface.

Now that the Band-Aid has been ripped off around AI's impact on job displacement, it's crucial to recognize the unparalleled potential for growth and efficiency that this transformative technology offers. While AI has been in development for decades, it seems all the rage now, because it has suddenly become an overnight success. Thanks to tools such as Runway and Midjourney, using AI has been made accessible for anyone's everyday needs such as video creation and graphic design.

First, let's ask the basic question: "What is artificial intelligence?" The Oxford Dictionary defines it as "the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages." The less academic version is that it's "technology that mimics or replicates human capabilities, based on millions of data inputs, accumulated over time".

And while use cases vary across industries, we will focus on food and beverage, because it's the most relevant for us. For starters, chefs and restaurant operators are using AI tools to create recipes and generate creative ideas on reusing inventory items to reduce food waste and shake up menus. Some local companies are also offering basic AI-enabled menu content generators, which is a quick and easy way to introduce AI for early adoption.

It won't be long before autonomous drones deliver food prepared by robotic kitchens ordered using in-game generative AI while playing PUBG. Don't forget loyalty collected in the form of non-fungible tokens (NFTs) for these orders. This seemingly distant future requires good technology infrastructure to function because both ad-hoc and instinct-led actions are still very much human traits. Perhaps not for long. Admittedly a bit creepy now, but so were deepfakes. Maybe it still is.

Related: The Open Letter Asking To Pause Artificial Intelligence Development Misses The Mark. Here's Why.

Image courtesy CBInsights' The Future Fast Food.

But what is the real potential for this so-called transformative technology- and why should it matter to the average restaurant trying to prepare a handmade shawarma by a busy street corner in Dubai's Satwa district? Well, for one, small food businesses buy supplies frequently, erratically, and in small quantities. Naturally, the unit cost of their purchases will be higher, as there is no incentive for the wholesaler to sell for less. On the contrary, franchises and chains command better prices given their procurement is in large volumes.

So, when a few hundred restaurants are looking to procure similar items, aggregate purchasing through a unified procurement channel can offer both the wholesaler and the buying businesses good terms. Everybody wins. Add AI to the said technology infrastructure, and you have an automation engine that can make intelligent recommendations and sustain itself, everytime the smallest operator is down to 25% of their tomato threshold.

The size of this opportunity in the F&B industry of the Gulf region, particularly in Saudi Arabia and the UAE, is set to experience significant growth, with the UAE's market alone expected to reach a staggering US$38 billion in 2023, according to Statista's latest data. The possible key to thriving in this hyper-competitive global destination lies in leveraging AI to optimize operations by automating processes, minimizing waste, and enhancing decision-making, all of which presumably do not factor into the already perceived size of the market, as the impact of AI is still being unraveled, daily.

At my restaurant technology startup, jalebi.io, our mission is to funnel industry expertise that empowers restaurants through our proprietary inventory optimization software to instantly improve stock efficiency, productivity, and yield. By dynamically connecting back-of-house data with front-of-house operations, our hardware-agnostic web app enables mastery over restaurant operations by linking real-time monitoring of food stock consumption, waste, and order management through an easy and intuitive platform.

With a market-leading customer onboarding that is faster than the nearest technology available, we are already exploiting AI to bring a restaurant's entire data securely into jalebi, and getting them online within a day, while witnessing impactful results in a week. This results in faster time to gain actionable decisions by any kitchen that is powered by jalebi.

To truly exploit our researched approach to restaurant and inventory efficiency, numerous upcoming strategic and high-impact partnerships will see these numbers double, even triple our speed, accelerating jalebi's capability for supporting a restaurant's entire operational and technological needs with a single touch point.

Jalebi leadership team working on solving complex restaurant inventory. Source: Jalebi

And the market has been watching us intently. Up until late summer of 2022, jalebi was alone advocating the importance of purpose-built technology to optimize inventory as the most valuable opportunity to improve restaurant margins. For the vast majority, it was always about increasing sales, increasing order volumes, and investing in marketing. While all important, much like the human gut, poorly administered back-of-house operations struggle to cope with increased demand inefficiency and fail to sustain low demand wastage from overstocked inventory, leading to irreversible losses.

Naturally, our consistent approach has led the restaurant tech market in the GCC to also adopt an inventory-focused narrative. We now see a dramatic shift and subsequent uptake of the same by complementary or even legacy technologies operating alongside us. As more of our peers share the burden of raising much-needed awareness to address inventory cost and waste optimization, the opportunity to address climate action also becomes more tangible. As more players begin operating with a common goal, we can expect to mobilize value creation for our customers at an industry-wide level.

Investors aren't ignoring it either. We are excited that half our existing investors are doubling down their confidence in jalebi.io, with tremendous interest from new investors, despite the global dry spell in funding for startups. Furthermore, the addition of industry-relevant advisors, such as founders of highly successful cloud kitchens and global leading food supply giants further validates our unique approach and in-depth understanding of the F&B landscape.

As our ability to tackle inventory-led issues matures, we also draw inspiration from the rapid adoption of AI and technologies in the US food economy, where cutting-edge solutions have begun to demonstrate a positive impact on restaurant operations, such as robotic process automation (RPA). By incorporating proven best practices quickly, we aim to establish even better advancements, originating from the Middle East to the world.

And with 90% of global restaurants relying on manual or non-existent inventory management, the untapped potential for pure software-as-a-service (SaaS) products such as jalebi.io is enormous. As the industry grapples with labor shortages, escalating food costs, and heightened competition, adopting AI-powered tools becomes increasingly essential to supplement and optimize human capacity.

Techstars MENA Managing Director Vijay Tirathrai with Jalebi co-founders. Source: Jalebi

The world is witnessing a real-time tectonic shift in the F&B sector, and this is the tip of the proverbial iceberg. With mergers and acquisitions seeing a four-fold increase between 2019 and 2022, the industry's landscape is entering a significant period of consolidation, where efficiency and automation play a pivotal role to influence imminent private equity investments that lead to large-scale improvements.

It's no surprise then that the global opportunity for unlocking working capital remains trapped in unoptimized inventory, and it is valued at a staggering $360 billion. Fortunately, our technology is already well-equipped to unlock this immense potential. At jalebi, we continue leading the way by consistently and responsibly pioneering meaningful technologies by working with our experts and advisors to support restaurants and the industry, enhanced with the benefits of AI. For F&B players in the region, the time to seize the opportunities presented and embrace the exciting future AI can deliver, is now.

As AI continues to reveal its potential across every industry, we will remain focused on harnessing its power to improve productivity and ingenuity to address decades-old problems plaguing the industry we love so dearly while remaining acutely aware of the risks and fears.

Meanwhile, thankfully the job of eating and enjoying food remains safe from the clutches of AI.

Or is it? Watch this space.

Related: UAE-Based Jalebi Gets Set To Roll Out Its Pioneering Technology For Restaurants In Saudi Arabia