Food manufacturers are in a race to revamp their products in response to increasing pressure to move away from artificial dyes and ingredients.
Suppliers of ingredients have seen a surge in sales after Health and Human Services Secretary, Robert F. Kennedy Jr., called on the food industry to eliminate the use of artificial dyes by 2027. This push aligns with a growing trend among consumers for healthier foods with clean-label ingredient lists.
“There is already high demand from customers for reformulation,” stated Monish Patolawala, CFO of Archer-Daniels-Midland Co., at the recent Farm to Market Conference in New York.
The demand for flavors, especially from beverage manufacturers, led to a 13% increase in operating revenue for ADM’s nutrition segment in the first quarter compared to the previous year. CEO Juan Luciano mentioned a significant interest in their line of natural colors.
ADM is not the only company experiencing a rise in demand for healthier and more natural ingredients. Ingredion’s texture and healthful solutions unit reported a 34% increase in operating income in the first quarter, driven by the demand for clean-label solutions.
McCormick, a major spice company, has also observed increased reformulation activity among its customers in response to the calls for natural ingredients. CEO Brendan Foley highlighted the focus on improving nutritional profiles along with transitioning away from artificial colors.
Several food industry giants have pledged to expedite the shift to natural dyes. Tyson Foods is actively reformulating products that still contain petroleum-based dyes, while PepsiCo aims to transition its portfolio to natural colors within the next few years.
PepsiCo’s CEO, Ramon Laguarta, emphasized the company’s commitment to meeting consumer demand for natural ingredients and positioning itself as a leader in this transition. The removal of artificial colors from brands like Lays is already in progress.
“We recognize the growing consumer preference for natural ingredients, and we are accelerating this transition in a strategic and organized manner,” Laguarta stated. “Our goal is to lead the industry in this shift without causing unnecessary panic or disruption.”