Food Coloring Prices Explained

Food coloring prices maintain their southward trend as the market’s growth is spurred by increased research and development in the food sector, rising demand for natural food colorants, and the need to enhance the taste of food and beverages. 

The natural food color segment posted the fastest market, with a CAGR of 6.8%. This is due to the increasing health awareness, driving the demand for products free from artificial additives. The European market continues to hold the largest market share as the region has strict clean-label food product guidelines. 

Additionally, the North American market, particularly the U.S. continuously regulates its food and drug guidelines to manage the growing obese population. This leads to the country’s introduction of oil-based color additives in response to the demand for natural and transparent food colors.

Why are food coloring prices fluctuating?

1. Food and Beverage Industry

The food and beverage sector covers raw food materials’ production, packaging, and distribution. This includes fresh and processed foods, and alcoholic and non-alcoholic drinks. Food colors are added to preserve their original color and texture.

The demand for ready-to-eat and ready-to-drink goods spiked as most people lived a fast-paced life, leading them to spend most of their disposable incomes on food consumption. According to Australia’s Independent Statutory Agency for Statistics, about 14.7 million tons of food and non-alcoholic beverages are sold from grocery stores, supermarkets, convenience stores, and fresh food markets to cater to on-the-go customers.

Thus, this new consumption trend spurs the demand and prices of food coloring to maintain the availability of food and beverages.

2. Clean Label Products

The increasing awareness of natural food color benefits stands out as a potential growth factor of the commodity’s market. Clean-label products don’t contain additives and dyes or artificial flavor enhancers. These properties largely contributed to the rising food coloring prices in the global market.

Also, transparency practices in some food service and retail grocery store chains, such as stating lists of ingredients in their product line, provide buyer awareness to customers. As a result, consumer interest in clean labels grew by 86% within the meat alternatives space.

3. Strict Regulations on Synthetic Color Application

The food coloring market is divided into 2 segments: synthetic and natural. Synthetic food colors are mostly used in the food and beverage industry though, some companies gradually shifted to natural color applications.

The growing health and safety concerns associated with synthetic colors prompted several countries to adopt severe regulations in the utilization of artificial coloring. For instance, Europe bans Fanta as this drink contains synthetic food dyes like Yellow No. 6 and Red No. 40. These colorants have cancer-causing substances.

Additionally, Mars (one of the largest food manufacturers in the U.S.) faced consumer backlash for using titanium dioxide (a known toxin) in its Skittle candies.

Thus, this strict product application reduces the marketability of artificial colors, translating to diminishing synthetic food coloring price trends.

Which variables impact the price of food coloring?

• Food and Beverage Industry
• Clean Label Products
• Strict Regulations on Synthetic Color Application
• Production Costs
• Logistics

Where does food coloring come from?

The application of food coloring dates back to ancient times, with evidence of its use in Egypt where natural colorants were extracted from plants to enhance the appearance of food and beverages.

For example, Egyptian candy makers added natural extracts and wine to improve their products. By the 19th century, synthetic dyes emerged with the advent of industrialization and provided more vibrant and stable colors.

The widespread use of food coloring truly took off in the 20th century with advancements in chemistry and the increasing demand for appealing processed foods. Today, food coloring is a common practice in the food industry to make products more visually attractive and consistent.

The production process of food coloring involves extracting pigments from natural sources or synthesizing them chemically.

Natural food colorings come from various sources, including vegetables (such as beets and carrots), fruits (berries), spices (like turmeric and saffron), and even insects (such as cochineal for carmine).

Synthetic food colorings are created through chemical processes to produce several colors. Red 40, Yellow 5, and Blue 1 are the widely used colorings due to their stability and bright hues. These colorants are applied in candies and beverages, baked goods, and cosmetics.

What are the uses of food coloring?

Here are the top 5 applications of food coloring, along with extensive descriptions of their uses:

1. Baked Goods – Colorful icing on birthday cakes, vibrant macarons, and rainbow cupcakes all rely on food coloring to achieve their eye-catching appearance. Bakers often use natural and synthetic dyes to create various goodies of colors that attract consumers and make special occasions even more memorable.

2. Confectionery – Candies, chocolates, and other confectionery products often utilize food coloring to differentiate flavors and make the treats more attractive. Gummy bears, jelly beans, and lollipops come in many colors that indicate different tastes, such as cherry red, lemon yellow, and apple green.

3. Beverages – From sodas and sports drinks to fruit juices and cocktails, vibrant colors make beverages more appealing and help convey their flavor profiles. For instance, orange drinks often use food coloring to enhance their orange hue, making them more visually enticing to consumers.

4. Dairy Products – Yogurt, ice cream, and cheese contain food coloring to enhance their natural colors or to create novelty products. Strawberry yogurt uses red or pink coloring to signal its flavor, while mint chocolate chip ice cream uses green coloring to stand out. In cheese, annatto is a common natural dye used to achieve the orange hue in cheddar.

5. Snack Foods – Chips, popcorn, and other snack items use food coloring to make them more visually appealing and indicate specific flavors. For example, cheese-flavored popcorn is colored orange to represent the cheese flavor, while multi-colored chips create a fun and attractive snack mix.

What is the future price of food coloring?

The emergence of fast-paced lifestyles will drive huge production of processed foods. Food additives are major ingredients in processed foods and drinks as they add texture, taste, and appeal to products. This sector alone holds a 60%-70% share of the commodity market.

Sensient Technologies Corporation manufactures and uses synthetic colors in candies, beverages, and processed foods. These colorants are favored for their vibrant hues and cost-effectiveness, making them popular among manufacturers aiming to attract consumers with visually appealing products.

However, the rising consumer awareness of potential health risks associated with synthetic additives leads to a growing demand for natural alternatives. As a result, regional markets intensified their plant-based purchases. North America leads with 59%, 52% in Europe, and 55% in Asia Pacific.

This spurred several companies to incorporate more natural ingredients into their products. For example, Oterra launched red and pink ColorFruit and FruitMax blends for plant-based meat and seafood to cater to the need for clean-label products.

Archer Daniels Midland Company started manufacturing PearlEdge, a unique white color solution that comes from maize starch. The EU’s Choose Safe Food campaign propels market growth for natural colorants.

These innovative and eco-friendly consumption approaches enable manufacturers to source sustainably and streamline the food coloring industry. Thus, the market is projected to reach $6.85 billion by 2030, with a tag of $534 per ton.