IntelligentX: Changing the world, one beer at a time

IntelligentX was developed to create a unique product proposition: a beer brewed by artificial intelligence (AI) that followed the tastes of its customers.

Beer as a legacy

Archeologist evidence suggests that beer is one of the oldest drinks produced by humans. According to a report published in the Journal of Archeological Science, the earliest traces of fermentation are 13,000-year-old residues of a beer found in Israel and “It has long been speculated that the thirst for beer may have been the stimulus behind cereal domestication” [1].

The brewing process has evolved to create a wide range of brewing styles and sub-styles (see the chart below representing “500 Beers On One Ridiculous Chart” [2], click to enlarge).

Despite its many years of experimentation, the brewing process, which is often considered an art form, remains complex, as the demand for personalized beverage experiences has increased.

British IntelligentX startup to quench brewers’ thirst for innovation

IntelligentX was developed to create a unique product proposition: a beer brewed by artificial intelligence (AI) that followed the tastes of its customers.

During his TEDx talk ([3]) in London, co-founder Rob McInerney explained his mission to “crush the mediocrity conundrum.”. Stemming from McInerney’s frustration of encountering mediocre mass-produced products, IntelligentX was born. The start-up aims to move from a model where marketing pushes consumers to buy standardized products to one where products improve according to consumers’ needs, bringing consumers back into the feedback loop and rendering advertising obsolete.

How does it work?

IntelligentX works around a subscription service. First, a consumer creates a profile via the app. Then, they select a combination of the four standard intelligent beers (Pale AI, Black AI, Golden AI, and Amber AI) and a delivery frequency. IntelligentX then directly delivers to the consumer the selected mixture of 10 cans of beer in a box, which is priced at £29.

After the first delivery, the consumer is asked to give feedback on their taste via the app. This feeds many data points to the proprietary AI algorithm, which in turn revises the beers’ recipes to provide new custom-made beers for the next delivery. The cycle then repeats until the customer narrow their preferences down to their favorite beers (see picture below, [9]).

Opportunities and challenges

IntelligentX is currently riding the hype surrounding the use of AI to deliver custom-made beers to its customers. Thanks to its first-mover advantage, the company was able to price beers at a premium to capture most of the value created. The company also avoided most marketing costs—such as those related to market research and advertising—by directly involving the customer in the design process.

However, it is uncertain whether the company will become profitable in an industry where mass production and industrialization have taken over customization.

  • The number of beer varieties will proportionally increase with the number of early adopters, rendering the production difficult and costly—even though some overlap in tastes amongst customers will be expected.
  • Barriers to entry are also low, as the model will constantly evolve, starting from the same four types of beer. This will prevent any network effects among consumers from occurring.
  • The current tech trend in beer is threatening IntelligentX’s niche.

The tech trend in beer

In recent years, like IntelligentX, many breweries have partnered with tech companies to explore AI applications in one of the oldest industries in the world. For instance:

  • Champion brewing company in Virginia teamed up with Metis Machine to use information about the top ten best-selling (Indian Pale Ales (IPAs) in the US to design a new IPA recipe and evaluate new beer recipes [6].
  • Sugar Creek Brewing Company partnered with IBM to use AI to improve its beer manufacturing line [7].
  • Carlsberg partnered with Microsoft in the “Beer Fingerprinting Project” to use machine learning fed with beer ingredient characteristics to map out and predict beer flavors, shortening the time it takes to develop new beers [5]

What’s next?

The food and beverage industry is evolving rapidly, and IntelligentX will need to continue innovating to stay ahead of its competition. Currently, the startup only delivers in the UK; thus, IntelligentX should consider increasing its manufacturing capabilities and expanding in other countries. Europe consumes the most beer in the world [8]—with the Czech Republic at the top of the list with 143.3 liters consumed per capita per year —and IntelligentX should seriously consider expanding throughout the rest of Europe.

Sources:

[1] Journal of Archaeological Science: Reports Volume 21, October 2018, Pages 783-793

[2] https://deadspin.com/the-taxonomy-of-brewing-500-beers-on-one-ridiculous-ch-1435203676, accessed 11/19/2019

[3] https://youtu.be/og5B5RNJ7Gw, accessed 11/19/2019

[4] https://vimeo.com/172395607, accessed 11/19/2019

[5] https://news.microsoft.com/transform/can-ai-help-brewers-predict-how-new-beer-varieties-will-taste-carlsberg-says-probably/, accessed 11/19/2019

[6] https://www.forbes.com/sites/bernardmarr/2019/02/01/how-artificial-intelligence-is-used-to-make-beer/#68db90d370cf, accessed 11/19/2019

[7] https://www.zdnet.com/article/smarter-beer-when-old-school-craft-brewing-meets-industry-4-0-ai/, accessed 11/19/2019

[8] http://worldpopulationreview.com/countries/beer-consumption-by-country/, accessed 11/19/2019

[9] https://join.intelligentx.ai/, accessed 11/19/2019

 

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8 thoughts on “IntelligentX: Changing the world, one beer at a time

  1. Impressive! I wonder if there is an even bigger opportunity with AI in wine making. With all the complexity in texture, smell, sweetness, acidity, density, you name it, coupled with massive subjectivity in quality evaluation (at the premium level), AI could provide significant value in creating better wine and pricing accordingly for it. Although wine seems more complicated than beer from an operational standpoint, with longer production times, big influence of location, climate, altitude, irrigation, etc. Maybe an even bigger opportunity if all these factors are measured and data-mined?

  2. Really interesting article. I’m starting to think science has gone too far! Jokes aside, I would be curious to know what kind of machine learning models IntelligentX uses. Perhaps it is some sort of clustering algorithm that groups users based on their taste preferences. Instead of relying on user generated data, the company might find itself using olfactory sensors to generate its own tasting profiles one day. That being said, I can see how users may actually like submitting their tasting notes because it makes consumption a more social and interactive experience. Cheers.

  3. As a beer lover myself, I’m always curious about trying new beers when I visit a new city. Sadly, a lot of good local beers are limited to their distribution networks and the experience is limited. I would love know if this AI system would be able to grab a sample of beer and recreate the same flavor profile based on my experiences and/or the actual composition of the beer. I know that some perfume brands precisely tailor their products using a similar technology, but it would be even better if I could brew my own beer at home. Let’s start a startup @Matthieu!

  4. Very cool concept, but allow me to play the devil’s advocate. I wonder how well it works considering this model requires a lot of people to have the same “personal” preference in order to brew a batch at scale. I think it would definitely be possible to brew something that pleases the most people but probably not something personal for everyone. At a somewhat expensive price of $3.70 USD per beer (a six-pack would be about $23 USD), I would have high expectations. I think that in some cases, especially in food and drink, consumers don’t always know what they want. I would rather rely on the expert taste of a sommelier at a famous House of Champagne than my own, when it comes to crafting the right flavors. I think the AI concept could be successful for a mass-market product but I have doubts about the higher-end of the market.

  5. Thanks for sharing! What an interesting read. I wonder: if this business is able to in fact fend off its competitors and begin to scale this model, what would be next after simply relying on a niche, subscription-based model? What may be interesting would be a commercially viable beer that has been tried and tested by its subscribers. Once it does get commercialized and you’re able to sell it to both bars and retail stores, the next challenge will then be marketing. The beer market is highly concentrated, with large players but a number of smaller craft brewery players as well. As the company scales, it will be interesting to see where it goes next!

  6. This is so interesting!! I echo the commentators above me – while reading your article I kept on asking myself: what is the next step? Is it wine, whiskey or maybe … flavored moonshine. I know this might not be the immediate option that comes to mind, but during my recent visit to Tennessee, I discovered a multitude of craft “moonshine” distilleries that pride themselves with an extremely broad range of flavors. Maybe using AI to propose personalized cocktails or “moonshine” flavors could be an interesting option for the company to explore!

  7. Going to add to the love for this article (congrats in advance for winning the in-class prize). This is a really fascinating business model – the company is able to capture value by actually creating the beer that it sells to consumers. This prevents disintermediation, because there is no alternative channel to get the beer. One of the concerns I have is that this is a service that requires a high-degree of scale: customers will likely need to order a surplus of beer in advance, because of the shipping fees (it’ll be hard to ever offer this beer at bars or at physical retailers because it is customized) and because it will take time to have the scale to produce a batch.

  8. A very fun read! Thanks for sharing this, Matthieu. I’m not a heavy drink of beer but after reading this, I became tempted to give it a try and see if this time I can finally say: Beer is delicious 🙂

    While I think it a creative business idea, I do feel a bit concerned about cost control for this young company. After all, a key element in its CVP would be AI-powered and highly customized beer. And this would imply a much higher average production cost than conventional brewers, who normally have a fairly standardized and large-scale production process with fixed ingredients and everything. Will this company be able to sustain or will it only end up being a fad? That remains a question mark to me.

    Also I’d think this company should really try to market via social media. The customer engagement aspect of its business looks very Instagrammable, and if viral marketing can take off, they should be able to attract a good number of initial customers who are curious and willing to try. But whether those customers will stay, ultimately, would still depend on whether the beer tastes good and make them think it worthwhile to pay extra for the customization component. Cheers.

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