U.S. Food Makers Make a Billion-Dollar, Risky Bet on Natural Colors
Natural-colour products accounted for a small share of retail items in 2025 but represented a large market. Products containing certified FD&C colours generated $57.8bn, equal to 7.1% of US food and beverage sales. Beverages accounted for 28.9% of those sales, followed by sweets at 22.4%, savoury snacks at 19.6% and baked goods at 17.9%. Within confectionery, products using FD&C colours generated 42.2% of category revenue.
General Mills has removed petroleum-derived colours from its US retail cereals, including Lucky Charms and Trix. The company had already completed the change in products supplied to K-12 schools in March. About 90% of its US retail portfolio has made the transition; fruit snacks and baked products are among the categories still scheduled for completion by the end of 2027.
PepsiCo’s “Simply NKD” versions of Doritos and Cheetos generated more than $3m in their first month alongside the traditional products. Atkinson Candy, which began replacing FD&C colours in 2019, reported a 60.3% increase in Chick-O-Stick sales between 2020 and 2025. Other companies that have announced removal commitments include Kraft Heinz, Nestlé USA, Conagra, Tyson Foods, Hershey, Grupo Bimbo, Kellanova, Utz Brands, McKee Foods, Campbell’s and JM Smucker, generally with deadlines from 2026 through the end of 2027.
A report commissioned by the National Confectioners Association and prepared by RTI International found that natural pigments are usually less concentrated than synthetic alternatives. Matching the intensity of an FD&C colour can require as much as ten times more material. In 2025, the US certified about 21.4m pounds of red, yellow, blue and green FD&C colours, compared with 12m pounds of non-FD&C colours. RTI estimates that a complete switch could increase demand for natural colours by 400% to 500%.
The supply implications vary by pigment. In RTI’s base case for 2028, average prices for non-FD&C colours would need to rise by 53% to draw out enough supply. Under an accelerated case, with demand 2.5 times higher, the increase would reach 516%; in a stress case with demand four times higher, it would exceed 1,000%. Curcumin shows the sharpest pressure: a 26% rise in demand could require a 277% price increase, while the accelerated and stress cases imply increases of 1,600% and 3,200% respectively.
The US imports almost all of the raw material for several natural colours, including 98.2% of annatto, 99.1% of butterfly-pea flower and 99.7% of saffron. China supplies 76% of imported capsanthin, a paprika-derived red pigment, and 75% of genipin used in gardenia blue. India supplies 86% of imported curcumin and 74% of imported lutein. Additional imports in RTI’s accelerated scenario would rise to 366 metric tonnes, compared with 34 tonnes in the base case and 733 tonnes in the stress case. Pumpkin-derived carotenoids alone would require an additional 22,375 acres of cultivation in the accelerated case and 44,750 acres in the stress case.
Manufacturers also have to manage the behaviour of natural colours during production and storage. Heat, light, oxygen, acidity and moisture can affect their performance; turmeric and spirulina are cited as particularly difficult to stabilise. Reformulation costs are estimated at $50,000 to $500,000 per stock-keeping unit, while shelf-life testing normally takes about 12 months and can take up to 24 months. A new colour system may require three to four years or more to develop. Sensient Technologies is investing up to $250m in natural-colour production, including an additional 28,800 square feet at its St Louis plant.
Retailers and industry groups have set additional deadlines. Walmart plans to remove certified colours and more than 30 other ingredients from its private-label products by January 2027. Target has completed the change in its cereals, while the American Bakers Association has committed to removing FD&C colours from baked goods served in schools from the 2026-27 academic year. Oterra and Debut are developing a precision-fermentation alternative to Red 40, with commercial-scale availability expected within three years. The NCA and RTI report also calls for uniform national standards, expanded domestic cultivation and extraction, long-term supply agreements, improved stability, packaging and distribution coordination, and investment in scalable technologies.
