Does AI implementation in one part of a company translate into AI success in another part of the same company?

“This analysis reveals most companies prioritize either consumer innovation or procurement efficiency, with only top performers like L’Oréal/Unilever achieving leadership in both domains through integrated AI strategies.” – RAM 2025 Model 4 Assessment**

**NOTE: This is a RAM 2025 Level 1 Preliminary Assessment only.

AI use cases for CPG transformation Score

“After analyzing 26 major CPG companies at IMD’s Center for Future Readiness, I discovered what separates winners from losers. The most future-ready companies treat consumer data like insider trading information. Howard Yu, The International Institute for Management Development (IMD)

ProcureTech Implementation Success Score

What Does Multi-Department AI Success Look Like For The Above-Listed Companies?

MODEL 1

Summary Insights

• Leaders in both areas: Unilever, Procter & Gamble, Coca-Cola — These firms are AI-first in strategy, applying machine learning and generative AI across R&D, marketing, and procurement.
• Consumer-focused AI stars: L’Oréal, Estée Lauder, Diageo — Lead in personalization and customer insights but lag in supply chain and procurement digitization.
• Procurement-strong, consumer-light: Henkel, Kimberly-Clark, Colgate-Palmolive — Excel in back-office AI but slower to innovate on the consumer side.
• Strugglers in both domains: Monster, Pernod Ricard, Reckitt Benckiser — Face implementation fragmentation, underinvestment, or cultural resistance.

MODEL 2

Comparative Assessment

• Consumer Behavior Tracking/Product Innovation: Likely more advanced across the board, as CPG companies historically prioritize customer engagement to drive sales. High-scoring leaders like L’Oréal and Coca-Cola likely outperform in this area, leveraging AI for personalized marketing and rapid product iteration, with tangible ROI (e.g., P&G’s 10% sales growth).
• Procurement/Supply Chain Efficiency: Gaining traction but less mature. Top companies may have robust systems (e.g., Nestlé’s Azure-powered analytics), but mid-to-lower tiers might still rely on manual processes or fragmented tools, limiting success. The complexity of end-to-end integration could hinder progress compared to the more immediate gains from consumer AI.

Conclusion

The listed companies, especially those with higher “Score 2025” values (e.g., L’Oréal SA, Coca-Cola, Unilever), are likely more successful in leveraging AI for consumer behavior tracking and product innovation than for procurement and supply chain efficiency. This reflects a broader industry trend where customer-facing AI offers quicker, visible returns, while operational AI requires longer-term investment and integration. However, without specific data on each company’s AI initiatives, this remains an informed estimate based on their innovation scores and industry patterns.

MODEL 3

Key Observations:

1. Dual Focus Leaders:
   • L’Oréal and Unilever show balanced excellence, using AI for both consumer innovation (trend prediction/virtual testing) and procurement optimization (sustainable sourcing/logistics).
   • Example: L’Oréal’s TrendSpotter 1 and IBM procurement partnership both drive >50% efficiency gains.
2. Specialized Strengths:
   • P&G and Nestlé prioritize supply chain AI (dynamic routing/forecasting) over consumer-facing innovation.
   • Beiersdorf and Colgate-Palmolive lean toward procurement automation (touchless POs/digital twins) rather than consumer behavior tracking.
3. Emerging Divergence:
   • Coca-Cola/PepsiCo (not listed in results) show stronger consumer tracking (IoT/AI analytics) than procurement automation based on available data.
   • Henkel/Danone focus more on sustainability reporting than end-to-end procurement automation.
4. Implementation Maturity:
   • Most advanced: Unilever’s real-time supply chain integration and L’Oréal’s 6-18mo trend prediction.
   • Early stage: Pernod Ricard’s manual-to-digital transition and Brown-Forman’s limited implementation.

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Strategic Implications

• Consumer Innovation Leaders (L’Oréal, Unilever) use AI to shorten product cycles (e.g., TrendSpotter cuts trend detection from 12→3 months).
• Procurement Leaders (Beiersdorf, P&G) achieve operational savings through automation (80% touchless POs, $300M routing savings).
• Lagging Companies (Pernod Ricard, Hershey) risk 15-20% higher operational costs compared to AI-optimized peers based on McKinsey benchmarks.

This analysis reveals most companies prioritize either consumer innovation or procurement efficiency, with only top performers like L’Oréal/Unilever achieving leadership in both domains through integrated AI strategies.

MODEL 4

Conclusions

– L’Oréal, Unilever, and Procter & Gamble demonstrate the most comprehensive and successful integration of AI across both consumer-facing innovation and supply chain efficiency, with industry recognition and substantial impact.

– Coca-Cola and Nestlé have robust supply chain AI and are making progress in consumer AI, but lag slightly in balanced, end-to-end innovation.

– PepsiCo, Colgate-Palmolive, and Hershey are making strides in both areas but are more traditional or at the scaling stage.

– Mondelez, Estee Lauder, and Danone are in the early adoption phase, especially in integrating AI across both dimensions, with growth potential through partnerships and pilots.

Note: While AI adoption is growing across the sector (71% of CPGs using AI in at least one function as of 2024), full scalability and effectiveness remain goals rather than current realities for most companies ([just-food.nridigital.com](https://just-food.nridigital.com/)).

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BONUS COVERAGE

Which of the above-listed companies, from greatest to least, make the best prospects and customers for ProcureTech solution providers?

Summary by Tier

• Ideal Targets (Tier 1):
  Unilever, P&G, Nestlé, Colgate, Coca-Cola — Scalable, influential, and digitally mature.
• Scalable Innovators (Tier 2):
  Mondelez, PepsiCo, Henkel, Kimberly-Clark, L’Oréal — Need targeted value and strong onboarding strategy.
• Cautious or Niche (Tier 3):
  Estée Lauder, Beiersdorf, Danone, Diageo — May start with pilots or ESG-related procurement use cases.
• Difficult or High-Risk (Tier 4):
  Reckitt, AB InBev, Pernod Ricard — Require structural change before ProcureTech success is feasible.