Major consumer goods companies are increasingly using artificial intelligence in product development to shorten research timelines, test ingredients digitally, and discover new applications for materials already available within their portfolios.
From cosmetics and food products to packaging materials, AI is helping research and development teams simulate ingredient performance, assess thousands of possible combinations, and eliminate unsuitable options before moving to physical laboratory testing.
L’Oréal, Mondelez, Nestlé, Haleon, and other global companies are now using AI to accelerate innovation, reduce development costs, improve sustainability, and respond more quickly to changing consumer preferences.
L’Oréal Uses AI to Develop Beauty Products
French cosmetics group L’Oréal has been applying artificial intelligence in its laboratories for around four years to accelerate product development and identify new uses for existing ingredients.
Fabrice Megarbane, president of L’Oréal’s Consumer Products Division, said the technology helps researchers predict how different molecules may affect the skin and hair before they are introduced into new product formulations.
The company uses predictive formulation systems that allow scientists to simulate ingredient performance and digitally test different variables before beginning laboratory experiments.
This approach helps L’Oréal narrow down potential formulations and focus on the options most likely to deliver the desired results, rather than physically testing a large number of combinations.
According to the company, artificial intelligence has made its product formulation process four times faster.
Repurposing Skincare Molecules for Haircare
One recent example involved molecules that had previously been used in skincare products.
L’Oréal repurposed these molecules to develop a collagen-based shampoo designed to give hair greater lift, volume, and fullness.
The example shows how AI can help product teams discover new applications for familiar ingredients instead of developing every new formulation entirely from scratch.
The technology also allows scientists to test different molecular combinations and assess their potential benefits within a much shorter period.
L’Oréal’s Wider Beauty Innovation Strategy
L’Oréal’s investment in artificial intelligence forms part of a broader innovation strategy introduced after the company reported its slowest sales growth in several years.
Chief Executive Nicolas Hieronimus launched a “beauty stimulus plan” to support the development of new products and accelerate their introduction to the market.
Beauty companies face growing pressure to respond to rapidly changing consumer preferences across skincare, haircare, and cosmetics.
Reducing the time required to develop and launch products has therefore become increasingly important for maintaining competitiveness.
Mondelez Uses AI to Develop Food Recipes
The use of AI in product development is not limited to cosmetics.
Mondelez International is using artificial intelligence to support recipe development across brands including Cadbury, Toblerone, Oreo, and Chips Ahoy.
Filippo Catalano, the company’s chief information and digital officer, said its AI system helps product teams generate and test recipe options more efficiently.
The tool can suggest different recipes, including unusual ingredient combinations, before human experts review the results and decide which options should move to the next stage of development.
This process reduces the number of physical samples the company needs to produce, helping save time, ingredients, and development costs.
AI Supported the Development of Gluten-Free Oreo
Mondelez said its AI tool supported the development of Gluten Free Golden Oreo cookies and a refreshed Chips Ahoy recipe.
The company also reported that 60% of biscuit recipes developed with the tool performed better across nutrition, sustainability, and cost.
The system does more than generate new recipes. It also helps teams compare the potential impact of different formulas on product quality, production expenses, environmental performance, and nutritional value.
AI Strengthens Supply Chain Flexibility
Artificial intelligence is also helping Mondelez reduce its dependence on single-source ingredients.
When the availability or price of a raw material changes, the AI system can identify possible alternatives or suggest adjustments to the recipe while maintaining the required product characteristics.
This connects product development with supply chain management, allowing recipes to adapt more quickly to changes in ingredient prices, availability, or operational requirements.
AI therefore supports not only product innovation but also the ability of companies to respond to disruptions that could affect manufacturing.
Nestlé Faces Product Reformulation Challenges
Nestlé plans to remove artificial food colourings from all its products worldwide by the end of 2026, having already removed them from its US portfolio.
Stefan Palzer, Nestlé’s chief technology officer, said the process requires the company to screen natural alternatives, test them during manufacturing, and assess their effect on product quality and shelf life.
Such changes place additional pressure on research and development teams, particularly when a company has a large portfolio of products requiring reformulation.
The US Food and Drug Administration has also said it is working with manufacturers, retailers, and industry groups to remove six remaining certified colour additives frequently used in the food supply by the end of 2027.
AI Enters Chocolate Recipe Development
Chocolate manufacturer Barry Callebaut has partnered with NotCo to use artificial intelligence in chocolate recipe development and ingredient substitution.
The technology is being used to identify and simulate different combinations of plant-based ingredients and assess whether they could be suitable for chocolate products.
This enables companies to evaluate a larger number of options digitally before starting pilot production, reducing both development time and the amount of material used in physical testing.
Nestlé and IBM Use AI to Develop Packaging Materials
Artificial intelligence is also being applied beyond food recipes.
In 2025, Nestlé and IBM Research announced that they had developed a generative AI tool to identify high-barrier packaging materials.
The tool can assess materials designed to protect products from moisture, oxygen, and temperature changes while also considering cost, recyclability, functionality, and performance.
The project uses chemical language modelling and IBM Research’s regression transformer technology to connect molecular structures with their physical and chemical properties.
Nestlé said the tool was created to support the discovery of new materials for different packaging applications.
Haleon Partners with Microsoft on AI Innovation
Consumer health company Haleon announced a five-year collaboration with Microsoft in June 2026.
The partnership covers the use of artificial intelligence across consumer insights, product innovation, scientific research, clinical content development, supply chain operations, demand forecasting, and commercial execution.
The collaboration demonstrates how AI is becoming integrated across different business functions rather than remaining a standalone research tool used only inside laboratories.
Will AI Replace Product Development Teams?
Although artificial intelligence can generate recipes and product formulations, companies say the technology is not intended to replace scientists or product development specialists.
At Mondelez, for example, human experts review all AI-generated recipe ideas before they move to further testing or product development.
The main role of AI is to accelerate research, reduce the number of possible options, and identify the formulations that deserve further investigation.
Final decisions remain in the hands of scientists, researchers, and product development teams.
How AI Is Changing the Future of Product Development
The experiences of L’Oréal, Mondelez, Nestlé, and other major companies reveal a significant shift in how consumer products are developed.
Instead of relying entirely on long sequences of laboratory experiments and physical samples, companies can use artificial intelligence, data analysis, and digital simulations to evaluate options during the earliest stages of development.
This transformation can reduce product development timelines, lower costs, improve sustainability, strengthen supply chain flexibility, and give human teams more time to focus on innovation and decision-making.
As AI models continue to improve, the technology is likely to become a central part of research and development across the beauty, food, consumer health, and packaging industries.
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