A New Palette: What the Natural Dye Movement Reveals About Procurement’s Strategic Role

This summer, seven major food and beverage manufacturers (PepsiCo, Kraft Heinz, General Mills, Nestle, Conagra, J.M. Smucker Co., and Hershey) announced plans to phase out artificial colors and dyes by the end of 2027. As a result, many other manufacturers are expected to follow suit. Collectively, these reformulation goals open up new opportunities for procurement to elevate its role as a strategic function by supporting high‑visibility business priorities tied to brand trust, regulation, and innovation.

Swapping Artificial Colors Is Complex

Replacing artificial colors is more complicated than it may first appear. The first challenge is selecting a natural color that matches the desired shade and vibrancy. It must blend seamlessly into the product, endure the manufacturing process, and remain stable under varying conditions such as temperature, light, and pH.

Once the color is identified, procurement faces the next challenge: sourcing it. Upstream, procurement professionals at dye manufacturers must source the raw ingredients needed to produce the dye. Each opportunity presents unique challenges that require careful planning. Let’s explore two key procurement opportunities.

Procurement opportunity 1: Procuring the natural dyes

The first opportunity is procuring the finished natural dyes. Natural colors have been trending in food and beverages for over a decade. However, recent announcements have sharply accelerated demand. Some products still need adjustments, such as Kraft Heinz’s Crystal Light and Jell-O.

For organizations adding or expanding natural dye procurement, three factors are critical:

1. Changing regulations:

In April, the U.S. Department of Health and Human Services and U.S. Food and Drug Administration announced plans to phase out petroleum-based synthetic dyes. This process includes setting deadlines for changeovers, revoking authorizations for certain food colors, and approving new natural colors. The approved colors will change over time, so procurement professionals should stay on top of new approvals via the U.S. Food and Drug Administration to identify new sources.

2. Competitive market:

A leading natural colors manufacturer, Sensient Colors, told the Associated Press that it will need ten times its current output to meet demand. Higher demand may lead to long lead times or temporary shortages. Supplier relationship management is crucial for visibility into lead times and positioning your organization as a customer of choice.

3. Cost Management:

Addressing affordability will also be critical, as natural colors are significantly more expensive than synthetic alternatives due to the need for tightly controlled growing conditions, specialized extraction methods, certifications, and protective packaging. Procurement specialists should look for bulk discounts and other cost negotiation opportunities to keep new formulations affordable.

Procurement opportunity 2: Procuring from the source

Increasingly, procurement professionals at natural color manufacturers are partnering with farmers around the world to source the raw materials required to produce natural dyes. In practice, this work involves identifying a diverse network of farmers to spread risk associated with natural disasters and unpredictable growing seasons. At the same time, teams support farmers in avoiding pesticide contamination and focusing on growing crops optimized for color vibrancy rather than yield. Additionally, procurement teams vet certifications, validate product quality, and oversee a range of other critical requirements.

Taken together, these upstream procurement partnerships play a vital role at the very top of the supply chain. Ultimately, they ensure that natural color suppliers can scale production to meet rising manufacturer demand, thereby enabling brands to move forward confidently with planned product reformulations.

However, an important caveat remains. In some cases, only a limited number—or even a single—supplier can provide a specific natural color. As a result, procurement teams must adopt a specialized sole‑sourcing approach, working directly with the only supplier capable of meeting their requirements. Because negotiating an effective sole‑source agreement can be complex, it’s critical that final terms deliver value for both parties.

To explore strategies for managing these supplier relationships, read ProcureAbility’s latest blog post: “Streamlined Solutions: A roadmap to negotiating a strategic sole-source agreement.” By applying a range of proven tools and strategies, procurement professionals can play a key role in helping their organizations successfully reach their reformulation goals.