Most FMCG boards in Australia are still hiring CEOs the same way they did five years ago. Commercial track record. Category experience. Retailer relationships. P&L ownership.

None of that is wrong. But it’s no longer enough.

Artificial intelligence is reshaping how supply chains operate, how demand is forecast, how products reach shelves, and how consumers decide what to buy. The businesses that move early will gain ground. The ones that wait will spend the next decade trying to catch up.

And right now, most of the sector is behind.

The Numbers from Inside FMCG Are Hard to Ignore

Seventy-four per cent of Australian food and grocery businesses are investing in generative AI over the next three years, focusing on route optimisation, efficiency, and quality control. That’s according to the AFGC and Argon & Co biennial supply chain survey.

At the same time, 43% of food and grocery organisations are prioritising cost reduction over the next one to two years. For the first time in the survey’s history, cost reduction has outranked customer satisfaction as the top supply chain priority.

The pressure to do more with less is real. AI is the tool the sector is reaching for. But the leadership teams making those investment decisions often don’t understand what they’re buying or what it takes to make it work.

The Big End of Town Is Already Moving

Coles banked $327 million in cost savings in FY25 through its Simplify and Save to Invest programme. Machine learning algorithms now handle rostering, markdowns, and call-centre automation. The company is targeting $1 billion in savings over four years and has spent $103 million building automated distribution centres in Queensland and New South Wales.

Woolworths has gone further. The company opened a $1.3 billion automated distribution hub in Western Sydney, its largest single infrastructure investment. It owns 80.4% of data analytics firm Quantium, which now employs over 1,200 staff and is positioning itself at the centre of AI-driven retail. 

Woolworths is also the first Australian retailer to adopt Google Cloud’s agentic AI platform, using it to power a shopping assistant that can plan meals, interpret recipes, and fill baskets autonomously.

These aren’t pilot programmes but they're operational investments worth billions. They’re setting the benchmark that every mid-tier FMCG business will be measured against.

The Mid-Tier Problem

Australia’s food and grocery manufacturing sector is a $127 billion industry that employs over 276,000 people and represents 32 per cent of total manufacturing output. The AFGC’s target is to double the sector’s turnover to $250 billion by 2030.

Getting there requires automation, AI adoption, and digital capability at scale. But 87% of the sector is made up of small and medium enterprises. Most of them don’t have a Chief Technology Officer, let alone a Director of AI.

The challenge for mid-tier businesses isn’t accessing the technology. It’s having senior leaders who can evaluate it, govern it, and connect it to commercial outcomes.

In my experience running FMCG businesses, the biggest technology failures didn’t happen because the technology was wrong. They happened because the senior team didn’t understand it well enough to make good decisions about it. They relied entirely on technical staff to assess, implement, and govern systems that had direct commercial impact.

That model doesn’t work when AI is embedded across forecasting, logistics, production, and customer engagement.

Data Fluency Is Now a Leadership Requirement

The tools FMCG professionals use every day have changed. Circana, NielsenIQ, Coles 360, and Quantium are now core to commercial and sales roles. But many senior leaders still rely heavily on insights teams to interpret the data for them.

That gap matters more as AI enters the picture. When the CEO or General Manager can’t assess an AI investment with the same rigour they’d apply to a capital expenditure or an acquisition, the board has a capability problem.

AI literacy for a CEO doesn’t mean writing code or building models. It means being able to:

• Assess where AI creates genuine commercial value versus where it creates noise
• Ask the right questions of technical teams and vendors
• Understand the governance and risk implications of autonomous systems
• Make investment decisions based on realistic capability assessments, not marketing claims
• Lead an organisation through the operational change that AI adoption requires



Across Australian business more broadly, only 12% of leaders say AI is transforming their business, despite 61% reporting efficiency gains. The gap between adopting AI and using it to genuinely compete is a leadership gap.

The Hiring Brief Needs to Change

Most executive search briefs for FMCG CEO and General Manager roles still focus on the same criteria. Revenue growth. Customer management. Team leadership. Operational delivery.

AI literacy rarely appears. Data fluency is sometimes mentioned, but usually as a secondary consideration. Governance experience with emerging technology almost never features.

The result is that boards keep hiring leaders whose strengths match the last decade of challenges, not the next one.

Meanwhile, the Director of AI is one of the fastest-rising roles in Australian corporate leadership, with packages averaging $236,000 and reaching above $250,000. Coles Group is already recruiting for director-level AI roles. But hiring a Director of AI doesn’t solve the problem if the CEO and the board can’t engage meaningfully with what that person is doing.

For mid-tier FMCG businesses with turnovers between $20 million and $150 million, the practical question is straightforward. Does the CEO, or the next CEO, have enough understanding of AI to lead the business through what’s coming?

If the answer is no, the board needs to factor that into the next leadership decision. Whether that means upskilling the current team, redefining the CEO brief, or looking for candidates with a different profile, the time to start is now.

Coles and Woolworths aren’t waiting. The mid-tier shouldn’t either.

ELR Executive is a specialist executive search firm focused exclusively on FMCG, food and beverage manufacturing, and fresh produce. If you’re making a senior leadership decision and want clarity on what capability your business needs, a conversation with John Elliott is a good place to start.