Should Food Manufacturers Develop AI In-House or Invest in an External Solution?
Before building Exhive - a generative AI platform for product development, we spent years as consultants building AI applications for food and beverage R&D completely from scratch. Having seen both sides of the coin, we often find ourselves in discussions about whether companies should buy or build their AI solutions when it comes to product development in the food and beverage manufacturing industry. We’re now breaking down the pros and cons to help you make an informed decision.
Building an AI Platform from Scratch
The benefits of building a custom solution:
1. Retain Intellectual Property (IP): When you build your own solution, you own the IP. This can be a significant advantage if the AI capability is central to your competitive edge or unique value proposition.
2. Seamless Integration: Custom-built solutions can be tightly integrated with your existing internal systems and processes, ensuring a smoother workflow and better alignment with your business needs.
3. Tailored Customization: Building allows you to design a solution that is perfectly tailored to your specific requirements, rather than adapting to the constraints of an off-the-shelf product.
4. Risk Mitigation: By developing in-house, you reduce dependency on external partners, which can be crucial if vendor reliability or compatibility is a concern.
Building an AI solution in-house can be an attractive option for food and beverage manufacturers for several reasons but it does come with its many challenges.
The Challenges of Building
Building an AI solution in-house is not without its difficulties, especially if AI is outside your company’s primary expertise. Some challenges include:
Talent Acquisition and Retention: Identifying and recruiting skilled AI engineers and data scientists is costly and competitive. Many food and beverage manufacturers lack the in-house expertise to manage AI development effectively.
Reliance on External Consultants: Even with in-house talent it is highly likely you need to rely on external consultants to bring in new expertise, adding to your costs.
Unrelated Cost Centers: Developing and maintaining an AI solution can create additional costs as AI requires extensive data collection, model training, and software development. These efforts can divert resources away from core manufacturing operations and primary revenue sources.
Continuous Development and Maintenance: AI is a rapidly evolving field. Keeping your solution up-to-date requires ongoing investment in development, which can strain your resources.
Risk of Obsolescence: By the time you’ve built your solution, the technology may have already advanced, leaving you with a legacy system that’s expensive to operate and maintain.
When Does it make sense
to build?
Building an AI solution or platform is a viable strategy if the need is so unique that no existing solution fits the problem. For example, if your food production facility is heavily invested in proprietary manufacturing techniques or unique automation processes, a custom-built AI solution can enhance these operations while maintaining a competitive edge.
Buying an off-the-shelf AI Platform
For many food & beverage manufacturers, buying an AI solution from an external provider is a more practical and cost-effective option. Here’s why:
1. Lower Initial Investment: Buying allows you to test the waters without committing to a massive upfront investment. This is particularly valuable if you’re exploring new capabilities, testing solutions or entering uncharted territory.
2. Access to Latest Features: External providers often offer state-of-the-art features that would be costly and time-consuming to develop in-house. Providers make sure that their solutions remain up-to-date with the latest advancements.
3. Flexibility and Scalability: As your business grows, an external AI solution can scale with your needs. Cloud-based AI platforms, for example, allow for seamless expansion without additional infrastructure investment.
4. Focus on Core Business: By outsourcing AI development, you can concentrate on what you do best (running your business) without diverting resources to areas outside your expertise.
5. No Talent Overhead: You have less pressure about hiring, managing, or retaining AI talent, which can be a significant burden for organizations due to the competitive talent market.
When Buying Makes Sense
Buying is the smarter choice when the AI solution you need is outside your core competencies. If your primary focus is food production, not AI development, then outsourcing to a specialized provider ensures you get high-quality, ready-to-deploy solutions without the complexities of building from scratch. This allows you to improve operational efficiency while maintaining focus on your core manufacturing processes.
It is also worth mentioning that purchasing rather than building is significantly more cost-effective.
Based on our experience having seen both sides, we can confidently say that buying will save you a considerable amount of time and money.
So, to Build or Buy?
The decision to buy or build an AI solution is not one-size-fits-all. It depends on your organization’s unique circumstances, goals, and capabilities. When deciding whether to buy or build, ask yourself the following questions:
Is this capability core to our business? If yes, building might be worth the investment. If no, buying is likely the better option.
Do we have the necessary talent and resources? Building requires a skilled team and significant resources. If these are lacking, buying is more practical.
How fast is technology evolving? In fast-moving fields like AI, buying allows you to stay current without the burden of continuous development.
What is our risk tolerance? Building carries higher risks, including cost overruns and potential obsolescence. Buying offers a lower-risk, more predictable path.
For food and beverage manufacturers, leveraging AI can be a game-changer—whether it’s reducing waste, improving traceability, or enhancing production efficiency. By carefully evaluating the trade-offs between buying and building, you can make a strategic decision that positions your company for success in an increasingly AI-driven industry.
Any further questions? We’re always happy to chat.