Snacking Reimagined Through AI

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This is a story about having it all: our favorite snack food, our trim figure, our healthy body, and the health of the planet, all thanks to the wonders of generative A.I. Or at least, that's the plan.

Why does the world need another snack food? There are a lot of them out there. The world needs another snack food because it needs a healthy one. It needs many healthy snack foods.

Harold Schmitz spent decades at Mars, the company responsible for some of the most popular snacks in the world. He is now a founding partner of the venture capital firm, the March Group, targeting the $700 billion global snack market, putting artificial intelligence at the center of snack food companies like Rivalz.

What does artificial intelligence add to the recipe? It makes the incredibly complex mixture of chemistry and biochemistry that goes through food processing understandable. This allows product development to happen exponentially faster, creating better products that are more cost-effective for consumers in the marketplace.

If Schmitz succeeds in making healthier snacks, it couldn’t come at a better time. Studies show people continue to eat more snack food, even as they struggle with weight gains that affect their health. Consumers, for whatever reason, have less time for traditional meals as we think of them, and so snack foods play a significant role in filling these dietary occasions. At the same time, obesity is increasing at alarming rates. Are these two things connected? It is quite possible. What we certainly know is that obesity is high and continues to rise, and diabetes, specifically type 2 diabetes, is often called a global epidemic. It too has been increasing. Interestingly, for the first time in history, thanks to the pharmaceutical industry, we see hints that this curve may be bending downward.

JPMorgan predicts that by 2039, 30 million Americans—around 39% of the U.S. population—will be on GLP-1 drugs like Ozempic and Wegovy. When you think about GLP-1s, the years ahead will likely affect demand, and that may not seem good for someone in the snack food business if people are eating fewer snacks. However, we now have a class of pharmaceuticals that is relatively safe and causes a decrease in food consumption. As a result, consumer demand for certain types of foods, especially less healthy ones, will go down. But demand for healthier foods will rise. And it's clear that there is a gap in the marketplace for these healthy alternatives.

Seeking healthy foods to fill this gap in the marketplace became a quest for UC Davis computer science professor Ilias Tagkopoulos, not because it was his job, but because of his experience with his son. His son had to drop out of school due to a debilitating condition, and doctors had no answers. So, he looked at the food his son was eating. They consulted with different nutritionists and designed a new diet. Within nine days, his son was cured. He's now 15 and has never had that issue again. Tagkopoulos said, "Okay, that's it. Everything we're doing is about food."

Tagkopoulos' company, PIPA, uses AI for food, working with a range of companies from the largest consumer packaged goods firms to startups like Rivalz, which focuses on fiber and protein over savory snacks filled with sugar, fat, and starch. The food industry is underserved in terms of AI, and we are on the precipice of something really big. We need to change the paradigm and be more sustainable for ourselves and society. We need to generate food that can keep us healthy in the long term.

Do large food companies know that they’re on the brink of something big? They do. They’ve realized that change is coming. If I’m a food company and I want to develop a new food, AI allows me to do that in ways I couldn’t without it.

What AI enables is figuring out where to focus. Imagine having all these variables—where do you start and what should you explore? With the velocity of good experiments, AI helps make decisions on what matters most, aiding the food industry’s holy trinity: affordability, scalability, and taste.

Sorting through billions of ingredient combinations and processing parameters is hard enough without worrying about nutrition or sustainability. But Rivalz must also hit the mark with that familiar, satisfying crunch. As Ralph Jerome, co-founder of Rivalz and a former head of Mars’ chocolate research and development, shows us, the extruder machine they use for food processing is the key. This machine mixes, hydrates, cooks, cools, forms, and shapes. The challenge is that it traditionally works with high-starch components, which help achieve that perfect texture. But Rivalz aims to shift away from unhealthy snacks to healthier ingredients, such as protein and fiber, which are more difficult to process in this way.

Rivalz claims that without AI, they would have had to conduct 500,000 experiments to develop their first products. With AI, they've reduced that number to just 71 experiments, coming up with new flavors like rad ranch, tasty taco, and late-night pizza. Using AI, Jerome and Rivalz’s engine produce affordable, nutritious snacks.

AI allows them to run simulations with various parameters, optimizing the process in minutes instead of conducting thousands of experiments manually. Rivalz was created to apply AI to snack food manufacturing, but it’s not the only company doing so. From concept development and consumer research to R&D and scaling food production, many large companies like Unilever, Kraft Heinz, PepsiCo, and AB InBev are heavily investing in AI.

While big companies have advantages in size, scale, capital, and proprietary data, Schmitz believes smaller startups like Rivalz also have some advantages. Rivalz uses AI to radically reduce its R&D costs, consumer insight generation costs, and other expenses that traditional food companies, which don’t use AI, must spend significantly on.

The road to better, healthier food is littered with new inventions that have been overhyped or fallen by the wayside. Most recently, food tech investors lost billions of dollars on the promise that technology could replace animals with plants and cultivated cells. These products often had subpar taste, nutrition, affordability, scalability, and environmental sustainability, which are key for success in the food industry.

One example of a failed innovation is Olestra, a fat replacement used in snack foods in the ‘90s that caused significant digestive distress and was quickly pulled from the market.

However, Rivalz is off to a strong start, according to its Chief Marketing Officer, Erica Pattni, who was also behind the success of Kind Healthy Snacks. Rivalz is already in about 2,000 stores and is on track to triple its sales this year. Despite the hype around AI, consumers really care about taste, health benefits, and cost more than how the food is made. Rivalz is proving that AI can be used to create healthier, tastier snacks, offering a profitable multibillion-dollar opportunity.

To succeed in the consumer food industry, one must understand two things: people want to live forever and feel great while doing so.