As the Netherlands’ leading supermarket chain, Albert Heijn wants to help its customers to live a healthier lifestyle while minimizing its environmental footprint. To do that, the company is investing in artificial intelligence. With support from Microsoft, it has embarked on a series of initiatives aimed at leveraging AI – and Generative AI in particular – to do everything from customer personalization to demand forecast and food waste projects. These efforts have radically transformed operations at Albert Heijn – further strengthening its role in the Dutch retail sector and making it easier for its customers to change their lifestyle.
Every day, nearly 17 million people who live in the Netherlands reach a point in their day where they ask themselves a mighty age-old question: what’s for dinner tonight?
This is not an exact estimate, of course, but you get the gist. And for thousands of households in the country, this is not just a gloomy prospect – it’s a reality that requires time and effort, as well as some degree of creativity.
“There’s nothing more frustrating than finishing a long day of work or errands and still having to think about what to make for dinner,” says Rogier Zimmer, Senior Director of Product at Albert Heijn. “Whether you’re trying to make sense of the ingredients in your fridge or need to plan a meal from scratch, everyone goes through this at some point in their day.”
It’s a challenge that Albert Heijn – the largest supermarket chain in the Netherlands – has found several ways to address through technology. From a weekly menu sent to customers based on their preferences to a new feature that allows to add recipe ingredients straight to their shopping list, Albert Heijn loves experimenting with new technologies to innovate the way its customers shop.
Its passion for innovation and customer support recently even led them to discover artificial intelligence – and particularly Generative AI – as part of new initiatives to provide customers with even more support when figuring out what’s for dinner.
“At Albert Heijn, our job is to fill six million plates with food every day, helping our customers to eat better while also reducing food waste,” says Noortje van Genugten, VP of Product Operations at Albert Heijn. “We think that AI is essential to achieving this.
“In collaboration with Microsoft, we’re using AI and, Generative AI to drive vital transformation across all sorts of segments and operations – from personalization to forecasting and so much more.”
A traditional retailer becomes a (food) tech company
With more than 1,200 stores spread across the country, Albert Heijn is the Netherlands’ leading supermarket chain and its second-largest e-commerce company.
Over 135 years of history and a workforce of 125,000 people have made it the nation’s biggest employer, as well as a hugely established brand serving households under one main vision. “Together, we make better eating the easy choice, for everyone,” says Noortje van Genugten.
“We want to help people make shopping choices that are better for them, and for the planet – and we think that data and technology have a great potential in making that happen.”
According to Renate Sportel, Head of Labs at Albert Heijn, this is more than just a mission: it’s a mindset that Albert Heijn has been embracing for decades. “Innovation has always been in our DNA,” she says. “In 1987, we already had the first prototype of a shelf scanner. In 1952 we were the first supermarket in the Netherlands to offer self-service stations – so for us, innovation is a culture more than just a goal.”
Decades later, that culture is still very much at the heart of what Albert Heijn does –leading it to pursue a shift from traditional retailer to food tech company. “We want to put more and more data and technology at the core of our work and use them to drive innovation on a continuous basis,” says van Genugten, stressing Microsoft’s key role in achieving this vision.
“We’ve been a Microsoft customer for years,” she adds. “We have all sorts of products from the Microsoft stack that we’re using for various projects.
“But more recently our focus has shifted towards a particularly game-changing technology: artificial intelligence.”
Using AI at scale
From operational efficiency to demand forecasting and more, AI has taken center stage in Albert Heijn’s innovation projects over the past few years.
Using Microsoft Azure OpenAI, AI Vision and Azure Kubernetes Services, the company has been driving transformation at scale across various parts of its business – with particularly striking work in sustainability matters such as food waste.
“The topic of food waste is a particularly important one for us,” says Noortje van Genugten. “Our ambition is to reduce our 2016 levels of food waste by 50% by 2030, but with more sales in each store, that isn’t always easy.”
To address this, the company is applying AI to demand forecasting. “The better we know what we are going to sell, the better we can ensure we bring just enough and prevent waste,” she says. “To do that, we carry out daily predictions for more than 15 million store-item combinations and how much of them we are going to sell.
“We do this more than 5 weeks in advance, so we make almost 1 billion predictions per day. So, AI is fundamental to doing this process quickly and precisely. We hope to be able to reduce our total food waste by more than 10% thanks to it.”
On top of that, work is also being done to reduce waste once the products reach the shelves. An example is the Dynamic Markdown initiative, which allows an increase to a product’s discount throughout the day via an Electronic Shelf Label – making it more enticing for customers to buy items that are nearly out of date. This now saves 250,000 kilos of wasted food per year.
Meals, ingredients and recipes tailored for you
Beyond these food waste initiatives, Albert Heijn is using AI to answer many more challenges in its organization, especially in the realm of customer experience.
Allerhande Weekly Menu is a prime example. “Allerhande is our food magazine, which we’ve been running for 40 years,” says Rogier Zimmer. “It’s the most read magazine in the entire country both online and in paperback.”
Available on the Albert Heijn app too, the magazine is the perfect place to find cooking inspiration. Yet for a long time, it would only have generalized food recommendations based on product discounts or popularity. “We wanted to make it more tailored to everyone’s unique needs,” he continues.
“So, a few months ago, we launched Allerhande Weekmenu, in which customers receive tailored weekly menu suggestions, in the AH App, based on their preferences. All these meals can easily be added to their shopping list for both home delivery and in-store shopping.”
Once they’ve made their choice, customers can also save all recipes in one place – a section of the app called My Recipes – them to their shopping list and store them there for future meals. “They can be your own recipes, Allerhande’s, from a flood blogger or wherever you want,” he adds.
“Thanks to My Recipes, you can save them all in what essentially becomes a cookbook in your pocket.”
Introducing Gen AI Labs
As it continues its shift towards becoming a food tech company, Albert Heijn knows just how powerful Microsoft and its AI tools can be in powering its future projects.
For this reason, the two have now partnered up on Albert Heijn’s Gen AI Labs, a start-up dedicated to exploring and experimenting with the use of Generative AI at a rapid pace. “We’ve had a Tech Labs for more than a decade, which we’ve used to experiment with all sorts of new technologies,” says Renate Sportel.
“But since the possibilities with Gen AI are so big, we have decided to launch a dedicated Generative AI Labs to start exploring the possibilities of this technology. And because we rely heavily on Azure OpenAI and other Azure services for the use of Generative AI, we are co-creating with Microsoft and exploring all the technological possibilities together.”
The partnership has so far proved hugely successful, leading to the creation of two game-changing solutions: Recipe Scanner and Leftover Scanner. The former allows customers to take a picture of a recipe and have its ingredients automatically added to their shopping cart in a matter of seconds. “The Recipe Scanner is really our way to try and bridge the physical world with the digital convenience options in our app,” she says. "It allows us to help our customers answer the ‘what’s for dinner’ question – and especially do it in the healthiest possible way.”
“We also have a project called Leftover Scanner coming soon,” adds van Genugten. “The idea is that customers can take a photo of their leftovers at home and get recipe suggestions from us on what they can cook with them.
“This helps us to promote food waste reduction beyond our stores, but right in our customers’ homes.”
Adding more and more chapters to a long-standing partnership
With the rollout of its two Gen AI solutions well underway, Albert Heijn is already looking to what comes next.
“What we love about these initiatives is that they really do help people eat in a better and more varied way,” says Zimmer.
“Having this library of suggestions at their disposal – and the ability to shop ingredients so quickly and efficiently – plays a big role in promoting a healthier lifestyle, and therefore in our company mission.”
Whatever Albert Heijn decides to do next; the company knows one thing for sure: Microsoft will be there to support them every step of the way.
“Before we were just a normal Microsoft customer,” he concludes. “We are very happy with the solutions provided, but that’s all there was. Now, we’ve taken this partnership to the next level: we’re co-creating.
“And putting our heads together to deliver innovative, ground-breaking technologies that can help us make the world better and improve our customers’ lives.”
“At Albert Heijn, our job is to fill six million plates with food every day, helping our customers to eat better while also reducing food waste. We think that AI is essential to achieving this.”
Noortje van Genugten, VP, Product Operations, Albert Heijn
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