• Since 2015, Daily Harvest's goal has been delivering healthy meals to customers across the US.
• It's using AI across facets of the business, including customer experience and packaging.
• This article is part of "How AI is Changing Everything: Small Business," a series exploring how small companies are using AI for success.

Daily Harvest is on a mission to bring nutritious food to consumers — with products that span heart-healthy harvest bowls to high-protein smoothies.

The meal delivery service, founded in 2015, ships orders throughout the US and sells its frozen food products in big-box and grocery stores like Costco and Kroger, and that all involves complex logistics.

While the brand's reach is large, its team is not — Daily Harvest employs fewer than 200 people.

As it has built an omnichannel business, Daily Harvest has integrated artificial intelligence throughout its operations, Jackson Mlawer, the company's director of product management, said. It's using AI for product recommendations, customer experience improvements, and packaging efficiency.

"Over the last year, we've invested a lot more in hyperfocusing on areas that we know over the course of our history as a business have driven success with AI," Mlawer said.

AI now touches nearly every facet of business operations, but the conversation often centers on how large enterprises or Big Tech companies are using it to scale their operations.

Small businesses like Daily Harvest are also tapping into AI, which shows how this segment can use the technology as a force multiplier.

Adopting a new AI approach

Mlawer said Daily Harvest has long been a tech-forward company. It initially built a custom tech stack, website, and mobile app, as well as internal tools. But beginning last year, the company turned to specialized, third-party AI solutions and has taken a more strategic approach with its AI investments.

Daily Harvest uses AI to drive product searches and recommendations for the 100 or so SKUs, or product codes, in its catalog. Sifting through all this data to recommend products based on each customer's dietary needs and unique preferences would be nearly impossible if it relied on humans alone. AI allows the company to quickly analyze customers' orders and website browsing history to incentivize them to try new products and reorder.

"We don't want customers to be fatigued with our food," Mlawer said. "We want them to try new products that we're launching or try things they've never tried so they can feel like the assortment is evergreen and it meets a bunch of different needs that they have throughout their life cycle." That's why ensuring the company has a robust data engine that can support product recommendations is so important, he added.

AI allows Daily Harvest to enhance other parts of its customer experience. The company has always used chatbots in its customer care channels, but AI allows it to drive more self-service and lets customers easily make changes to their plans, such as skipping their next order.

Previously, its customer care team would receive a help ticket and speak with the customer to resolve their issue. Last year, Daily Harvest implemented an AI chatbot that provides more rapid responses to customer queries. It also developed an AI model that categorizes customers at risk of canceling their subscriptions and directs them to a customer service agent for more personalized service, which improves retention.

"Not only are we seeing cost savings from enabling more of this automation, but we're seeing that our customer success scores — their actual satisfaction scores — have actually increased with the implementation of more AI in our care channels," Mlawer said.

Taking the friction out of fulfillment

AI also helps Daily Harvest enhance its fulfillment experience.

The company ships its boxes directly to consumers, so it's critical they are delivered on time and in good condition. Daily Harvest uses AI to determine how much dry ice to pack based on the number of products in each box and the weather at its final destination.

"How do we properly pack a box? Do we need 10 pounds of dry ice? Five pounds? Should I use a small box or a large box?" Mlawer said. "All these compounding factors are really intended to learn as AI is used, and then deliver, essentially, a frozen, on time, in-full package to customers."

With AI, Daily Harvest is improving packaging efficiency and the customer experience, but the technology isn't a solution for everything.

AI is only as good as the data it ingests, and there can be some growing pains in the beginning. For example, when Daily Harvest launched its new chatbot, the tool would sometimes provide incorrect responses to customers. The company adjusted how it trained and coached its AI model, pivoting to provide manual responses and focusing on a few use cases until the model had enough accurate data to deliver better results.

Within its fulfillment operations, Daily Harvest has also implemented quality-control measures, in which employees spot anomalies and double-check box configurations and packaging.

Mlawer said small businesses exploring AI should be tactical about how they use it. They don't need to apply it in every area. Instead, they can use it to augment specific parts of their operations and address the most pressing problems.

"Be very strategic with the type of AI enhancements that you feel your business will drive the highest value from," Mlawer said.