Next Move Strategy Consulting's Insights into the Food Color Market

Market Definition:

The global Food Colors Market size is valued at USD 3.36 billion in 2023 and is predicted to reach USD 6.85 billion by 2030, with a CAGR of 10.9% from 2024 to 2030. Food colors signify natural or synthetic substances added to food and beverages to enhance the color of the product. This market encompasses various products, including liquid, gel, and powder colorants designed to meet diverse industry requirements.

The primary objectives of the food colors are to improve the appearance of food and beverages, meet consumer preference for vibrant and appetizing products, and comply with regulatory standards. It also enhances product aesthetics, brand differentiation, and consumer appeal. Food colors find application in multiple industries, including food in the beverage sector, confectionery, bakery, and dairy, in which colors play a vital role in influencing consumer choice and overall product success.

Market Dynamics and Trends:

The worldwide surge in the popularity of fast food has become a pivotal driver for the global food colors market. According to a recent survey by the U.S. National Center for Health Statistics in 2023, about 36.6% of American adults consume fast food regularly. As more people opt for fast food, there is a growing need for colorful and visually-enticing food options in these choices.

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Additionally, startups such as Motif FoodWorks and Michroma in the U.S. are launching innovative methods to make healthier food colors, ingredients, and flavorings, including products such as Vanilla Vida, Spero Renewables, and Pigmentum. This factor fuels the growth of the food color market.

For instance, in February 2023, Michroma launched a unique food coloring and flavoring technology that utilizes precisely controlled fermentation to commercialize fungal food colors. The company produced Red+, a unique red colorant that is temperature-resistant and stable over the whole food pH spectrum. The company is expanding its product line globally with blue and white variations. It is still in the research and development (R&D) process.

The global food colors market is also significantly driven by the rising demand for clean, simple, and plant-based food colors extracted from fruits and vegetables. According to research conducted by food ingredients supplier Archer-Daniels-Midland Company, in 2021, plant-based sourced colors accounted for 59% of the food colors market in North America, 52% in Europe, and 55% in the Asia-Pacific region. This global shift toward plant-based coloring solutions highlights the increasing dominance of these natural alternatives.

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However, the growing health and safety concerns related to the utilization of some synthetic colors in the food processing industry have hampered the expansion of the food colorants business. These colorants may lead to issues such as hyperactivity and chronic illnesses.

For instance, in July 2022, A California man sued the company that makes rainbow-hued Skittles Mars, stating that the candy is "unfit for human consumption" due to the usage of titanium dioxide. Such concerns further lead to stricter regulations, potentially limiting the growth of the food colors industry.

On the contrary, the growing global demand for natural and transparent food labeling is a prime factor presenting opportunities in the food colors market. Consumers now prioritize clear and honest labeling, emphasizing natural ingredients and transparency. This factor is expected to create opportunities for the food colors industry.

Market Segmentations and Scope of the Study:

The food colors market is segmented based on color palette, form, solubility, application, and region. Based on color palette, the market is divided into natural food colors, synthetic food colors, caramel food colors, and titanium dioxide food colors. On the basis of form, the market is categorized into liquid, powder, and gel. On the basis of solubility, the market is categorized into dyes and lakes. Based on application, the market is categorized into meat products, beverages, dairy, bakery & confectionary, processed food & vegetables, oils & fats, and others. The geographic breakdown and analysis of each of the aforesaid segments include regions, such as North America, Europe, Asia-Pacific, and the Rest of the World (RoW).

Geographical Analysis:

North America holds the dominant share of the food colors market, and is expected to continue its dominance during the forecast period. The introduction of clean-label and oil-based color components in North America responds to the global demand for natural and transparent food colors.

For instance, in May 2023, EXBERRY by GNT created the first completely oil-based coloring food, allowing producers to generate brilliant orange colors in low-water-content applications. EXBERRY Shade Vivid Orange - OS was established to fulfill the global demand for low-dosage and clean-label coloring components that give bright orange colors. By enhancing visual appeal while preserving transparent labels, the firm aimed to meet the market needs, fueling substantial growth of the food colors market in this region.

Additionally, the introduction of innovative and diverse food color products that attract consumers and food manufacturers is positively driving the North American food colors market. For instance, in March 2022, Archer-Daniels-Midland Company launched PearlEdge, a unique white color solution derived from natural components such as maize starch. It provides a vivid, stable, and uniform white color for various food and beverage applications. This innovation addresses the demand for natural and clean label options, further driving the growth of the food colors market.

Competitive Landscape:

The food colors market comprises various market players, including ADM, BIOCONCOLORS, Chr. Hansen Holding A/S, Digestive Disease Week (DDW), DIC Corporation (BASF SE), Döhler GmbH, Florio Colori, GNT International B.V., International Flavors & Fragrances, Inc., and Kalsec, Inc., and others. These market players are adopting various product launches and partnerships as their key developmental strategies across multiple regions to maintain their dominance in the food color market. 

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For instance, in November 2022, GNT International B.V. launched EXBERRY Shade Bright Green-Powder. This innovative addition to their EXBERRY Coloring Foods line features turmeric and spirulina powder and is tailored for dry and powdered applications, including bread mixes and spices. This factor enhanced the growth of the food color market

Also, in August 2022, ADM partnered with Benson Hill, Inc., an animal food manufacturing company, to enhance the production of innovative soy-based food color ingredients. This collaboration addresses the rising demand for natural food color solutions in various segments within the food and beverage industry, including savory, sweet, and dairy products.