There are many ways to invest in the ongoing artificial intelligence (AI) boom. You don't even have to focus on Silicon Valley and friends. The AI tools tech giants provide can have game-changing effects on many sectors and markets you probably never thought of as technology investments.
On that note, let me show you how AI-based process upgrades are helping a longtime household name in the consumer goods industry. Unless you already dove into this giant's AI ambitions on your own, I'm pretty sure you didn't see this name coming. We're leaving Silicon Valley far behind, venturing to an unexpected consumer goods veteran's headquarters in Atlanta, Georgia.
Coke: You can't beat the real thing
Essentially nobody thinks about Coca-Cola (KO) as a technology powerhouse with trailblazing digital ideas.
But that's a big mistake. As it turns out, the soft drink giant is quite busy with digital advertising, various forms of artificial intelligence, and other tech-centered business operations.
For instance, Coca-Cola recently launched a marketing campaign called "Create Real Magic," using AI tools to let consumers design personalized visual imagery related to the brand. The company worked directly with AI expert OpenAI on this project, incorporating features from the Ball-E image generator and the ChatGPT conversational AI portal with the elevated power of the GPT-4 model. Contestants and enthusiasts also had access to a rich library of famous Coca-Cola images and characters, giving the contest a brand-boosting feel.
Some of the most engaging designs were displayed on prominent billboards in New York's Times Square and London's Piccadilly Circus. This campaign highlights how AI can alter marketing strategies, enabling companies to interact with consumers on a highly personalized level and automate the design process for point-of-sale materials.
AI at work: Coca-Cola's sweet, sweet secret sauce
Moreover, AI isn't just reshaping Coca-Cola's consumer interactions; it's also revamping the company's internal operations.
Coca-Cola is harnessing the power of AI to improve its knowledge management systems, making previously hard-to-access data readily available to its employees. By transforming vast amounts of stored data into actionable insights, AI is enabling employees to make more informed decisions, ultimately boosting the company's efficiency and productivity.
Machine learning is not only making the distribution network more efficient but also aiding in inventory management, reducing waste and costs. Marketing campaigns, with the pattern-finding power of deep learning, can become more targeted and cost-effective. This approach is particularly valuable in the current inflation-driven economic climate, where every efficiency gain matters.
In general, AI tools are helping Coke understand its customers better, providing personalized experiences and maintaining customer loyalty even in tough times.
Indeed, this commitment to AI signifies Coca-Cola's forward-thinking approach. As CEO James Quincey pointed out during Coke's annual shareholder meeting in April, AI is opening the door to a new phase of opportunities. The company is eager to be on the front lines, experimenting, learning, and leveraging AI as a competitive advantage.
"We've moved away from focusing on broadcast TV ads to creating immersive experiences, and we're embracing artificial intelligence to help develop ways to be even more engaging with consumers," Quincey said, highlighting the unique "Create Real Magic" campaign.
The ripple effect
Interestingly, Coca-Cola's progressive use of advanced analytical AI tools also extends benefits to its partners. Take Monster Beverage (MNST 0.41%), for instance. The energy drink company heavily relies on Coca-Cola's distribution network for its non-alcoholic beverages. Therefore, any advancements in Coca-Cola's bottling and distribution processes translate into significant gains for Monster Beverage.
When Coca-Cola finds better ways to manage bottling and shipping needs, schedules the production of different products in a shared bottling system more efficiently, or reduces production costs across its global infrastructure, Monster Beverage also reaps the benefits. AI is indeed driving these enhancements, transforming not only Coca-Cola but also positively influencing its partners.
These developments underscore the far-reaching potential of AI investments. It's not just the tech firms or the immediate implementers of AI that stand to benefit. The ripples of AI advancements extend to associated companies, partners, and indeed, the entire industry. So, investors looking at the AI revolution might want to expand their horizons beyond the conventional tech players to also consider these beneficiaries.
Investors should consider the transformative power of AI within traditional industries and how it's driving a major shift in operations and customer engagement. Coca-Cola's enthusiastic embrace of AI shows that the technology's investment potential extends far beyond the tech sector, offering exciting prospects for those willing to see the change.
This consumer goods veteran's broad and deep commitment to AI tools might come as a surprise, but it's also a helpful wakeup call. If Coke is doing all of this heavy AI work, including an imaginative OpenAI collaboration, who else could be pursuing similar AI ambitions behind closed doors? Look around, and you'll find AI conversations popping up in myriad unexpected places.
