Food companies are rushing to get ahead of possible stricter regulations for artificial dyes and flavors in the U.S. food supply. Ingredient suppliers like ADM have seen sales boom since Health and Human Services Secretary Robert F. Kennedy Jr. in late April announced that the U.S. government will phase out artificial dyes from the food supply by the end of next year. As companies scramble to get ahead of new rules, a slew of new companies are also popping up to fill the void for “natural” colors and flavors.
Kennedy and HHS are urging food manufacturers to voluntarily remove six petroleum-based dyes by the end of next year – Green No. 3, Red No. 40, Yellow No. 5, Yellow No. 6, Blue No. 1 and Blue No. 2. The FDA is also requesting food companies remove Red. No. 3 sooner than the 2027 requirement and warned the authorization for Citrus Red No. 2 and Orange B could be revoked “within the coming months.” Most assume that artificial flavors will eventually be targeted as well.
While new HHS policy falls short of an outright ban, food companies aren’t waiting around for new rules to materialize. Most are already seeking replacements for key ingredients in their signature products as replacing artificial ingredients with natural alternatives is not as easy as it may seem.
Some industry experts say it could take as much as five years for the U.S. food system to fully phase out artificial ingredients. More pressing is the fact that there could be a severe shortage of agricultural products needed to transition the entire food industry to natural colors before the end of 2026, according to the International Association of Color Manufacturers (IACM).
It takes time to cultivate, grow and harvest the ingredients necessary to create natural colors at the necessary scale, notes IACM. What’s more, not every natural color source material has been approved for use as a color by the FDA. All colors, including natural colors, must go through the FDA Color Additive Petition process, which can be quite lengthy. Once a color achieves approval by the FDA, there is no guarantee that other countries will also approve the color. These same issues apply to other ingredients like flavorings.
To help the industry with the transition, the Food and Drug Administration (FDA) says it is accelerating approval of natural alternatives. Three new colors have recently been approved, including two blue colors, one made from algae and the other derived from a flower.
Some companies are already benefitting from the push to reformulate food products. ADM (ADM: NYSE) said demand for flavors boosted operating revenue in its nutrition segment by +13% in Q1 2025. Ingredion (INGR: NYSE) posted a +34% increase in its texture and healthful solutions unit, with demand for “clean-label” solutions driving growth. McCormick (MKC: NYSE) similarly noted that organic sales led growth in its flavors solution segment as food companies reformulate products.
St. Louis, Missouri-based Sensient Technologies Corp. (SXT: NYSE) has less name recognition than those other three but it is actually the leading manufacturer and marketer of colors, flavors, and other specialty ingredients in the world. The company, which saw net earnings grow +11% in Q1 2025, recently announced plans to accelerate investments in naturally sourced colors and a move away from synthetics.
Sensient already works with farmers and producers around the world to harvest the raw materials to make natural dyes. It’s also increasing investment in botanical development, expanding its supply chain to diversify crops and growing regions, and investing in processing capabilities. “It’s not like there’s 150 million pounds of beet juice sitting around waiting on the off chance the whole market may convert,” said Paul Manning, the company’s chief executive. “Tens of millions of pounds of these products need to be grown, pulled out of the ground, extracted.”
There are also a slew of startups trying to capitalize on food industry’s transformation, many of which are in the biotech space and focused on things like fermentation. AgFunder recently highlighted “Michroma,” a biotech startup using fungi and gene editing to create natural dyes.
Michroma has already developed a natural red, Red+, to replace key red synthetic dies. Currently, one of the main natural alternatives for red coloring is extracted from the cochineal bug, a parasite native to South America, which isn’t suitable for vegan diets. Meanwhile, plant-derived colorants like beetroot extract lack the necessary stability and taste neutrality for many applications, according to Michroma founder Ricky Cassini. He also points out that the “even if current natural dyes worked well enough in terms of performance, the supply wouldn’t be sufficient to solve the increased demand.”
Another biotech company working with fungi and fermentation is Denmark-based Chromologics, which has also introduced a red as its first natural color. Then there is Israeli startup Phytolon that has made a yellow pigment utilizing bakers yeast. Like Michroma, both companies are currently navigating the FDA approval process for their natural pigments. (Sources: FoodDive, AgFunder, Reuters)
