Food companies are racing to reformulate their products and respond to growing pressure to move away from artificial dyes and ingredients.
Ingredients suppliers have reported booming sales after Health and Human Services Secretary Robert F. Kennedy Jr. demanded the food industry to phase out use of artificial dyes before 2027. Kennedy’s push comes on top of a groundswell of support among consumers for healthier foods with clean-label ingredients lists.
“There is a lot of demand already from customers to reformulate,” Monish Patolawala, CFO of Archer-Daniels-Midland Co., said at the Farm to Market Conference in New York on Wednesday.
Demand for flavors, particularly among beverage producers, raised operating revenue at ADM’s nutrition segment by 13% in the first quarter compared to last year. CEO Juan Luciano told investors on an earnings call that “we have seen a lot of activity and requests for our line of natural colors.”
ADM isn’t alone in seeing increased demand for healthier and more natural ingredients. Ingredion’s texture and healthful solutions unit posted a 34% increase in operating income in the first quarter, driven in part by demand for clean-label solutions.
Similarly, spice giant McCormick has seen “reformulation activity across our customer base” in line with demands from Kennedy and “the new administration,” CEO Brendan Foley told investors in March.
Foley noted that while companies are looking to move away from artificial colors, they also want to improve the nutritional profile of their products.
“It isn’t just colors,” Foley said. “It’s also about just working on trends that are certainly positive like hydration, functional foods, high protein.”
A number of food giants have already announced their intentions to accelerate the transition to natural dyes. Tyson Foods is “proactively reformulating” the products that still contain petroleum-based dyes, according to CEO Donnie King.
PepsiCo, meanwhile, wants to move its portfolio to natural colors — or at least add more natural options — within the next “couple years,” CEO Ramon Laguarta said in April. Brands like Lays will have artificial colors removed by the end of the year.
The snacking giant wants to position itself as a leader in the transition to natural ingredients, and reformulation of big brands is “well underway,” according to the PepsiCo CEO.
“We understand that there’s going to be consumer demand for more natural ingredients, and we’re going to be accelerating that transition,” Laguarta said. “Ideally, we can do this in a very pragmatic, orchestrated way as an industry and not create unnecessary panic or chaos.”
