Supply Chain Security for Natural Colors

Major Market Movements Prompt Increased Urgency in Conversion Conversations

Discussions surrounding the transition from synthetic to natural ingredients have persisted for more than a decade, frequently capturing media attention. The trend towards natural ingredients has been consistently prominent and is now gaining significant momentum.

In response to sustained consumer demand and pivotal regulatory measures, notable changes have been observed in the food and pharmaceutical sectors:

• 2022: European Union Prohibition of Titanium Dioxide
• 2023: California’s Prohibition of Red 3 (Effective 2027)
• 2024: California’s Ban on Synthetic Colors in Educational Institutions (Effective 2027)
• 2025: FDA’s Withdrawal of Red 3 Approval (Effective 2027)

Numerous U.S. states have introduced legislation addressing titanium dioxide, Red 3, and other synthetic colorants. Additionally, the FDA is under increasing pressure to reassess approvals for other synthetic colorants.

In light of these escalating restrictions, both perceived and enforced, numerous brands are strategically planning to transition away from synthetic colorants.

How can I prepare my business for a conversion project?

Transitioning from synthetic to natural colors involves a multifaceted approach rather than a straightforward substitution. Numerous elements, such as processing techniques, budget considerations, desired hues, and regional regulations, play a significant role in determining the appropriate natural color for each endeavor. Our expert team stands ready to guide you through this intricate process.

Beyond the development phase, your business should evaluate and prepare to manage additional considerations, including: Ensuring the security of the natural color supply chain

We are committed to being your strategic partner in color innovation during this transition.

The Important Role of Forecasting in the Natural Color Supply Chain

Customer forecasting significantly influences the availability of natural color. Precise forecasting is essential for effectively managing the natural color supply chain. Unlike synthetic options, natural color raw materials are influenced by agricultural factors such as weather, seasonality, and regional crop yields. With accurate forecasts, we can:

• Develop planting schedules and sourcing strategies that align with market demand
• Minimize lead times and ensure consistent product availability
• Reduce waste and manage costs efficiently

By collaborating with our customers to enhance forecast accuracy, we establish a more predictable and responsive supply chain that fulfills your requirements while supporting sustainability.

Discover more about our global sustainability initiatives in our annual report.

How does Sensient Pharmaceutical ensure supply chain security?

We understand the critical role that supply chain security plays in maintaining seamless operations for our clients. Through strategic partnership agreements, including long-term contracts, advanced forecasting models, and adaptable inventory and sourcing strategies, we ensure a dependable supply of natural colors.

This approach empowers our clients to concentrate on their core business activities, with the assurance that our robust and secure supply chain is tailored to meet their operational requirements.

The Impact of Vertical Integration on Customer Experience

Sensient’s Seed-to-Shelf Agronomy initiative aims to diversify the cultivation regions for natural colorants, facilitating multi-hemisphere agricultural opportunities. Our strategic approach to vertical integration is tailored to assess risk and maximize value for each specific botanical used in natural color production.

This comprehensive vertical integration—spanning from raw material procurement to the manufacturing of finished natural color products—provides our clients with substantial advantages:

• Comprehensive Traceability: Clients benefit from complete transparency regarding the origin and production processes of their products.
• Consistency and Quality Assurance: Internal processing ensures adherence to stringent quality standards at every phase.
• Adaptability and Innovation: Direct oversight of raw materials empowers us to swiftly adjust to client needs and market developments.

Our vertical integration strategy strengthens supply chain reliability and empowers us to collaborate with clients in crafting bespoke solutions to address their specific challenges.

Ensuring a Stable Supply Chain for Our Customers

Stability and reliability in our supply chain is a cornerstone of our operations. We achieve this through:

• Risk Management: Continuous monitoring of geopolitical, climatic, and market risks.
• Strategic Sourcing: Partnering with diverse suppliers to reduce dependency on any single source.
• Global Footprint: Leveraging our worldwide presence to meet regional demand effectively.
• Proactive Communication: Keeping customers informed about potential disruptions and recovery plans.
• Ownership of Warehousing Operations: We own and operate our own warehouses which include both ambient and cold storage facilities, ensuring full control over inventory storage, handling, and shipping processes.
• Global Manufacturing Network: With multiple manufacturing sites strategically located worldwide, we offer flexibility and redundancy to meet customer demands and ensure uninterrupted high-quality supply, even in the face of regional disruptions.

Our commitment is to ensure that our customers experience minimal disruptions, even in a volatile global environment.

Collaboration Between Technical and Procurement Supports Stable Supply

In addition to our strategic operational tenets, our technical team collaborates with customers to address specific challenges, from customized formulations to production-focused analytical support to guidance on storage and handling to maximize shelf life and product quality.

By combining technical expertise with supply chain strategies, we deliver integrated solutions that drive efficiency and value.

Our technical teams also work directly with our supply chain team to validate multiple sources for raw materials, giving Sensient an improved ability to respond to short-notice requests. The global nature of our product development and manufacturing capabilities allows us to have redundant capacity as well as shorter lead times, where appropriate, through cross-region collaboration and technology transfer.

Through collaborative technical development with our customers, our color experts are often able to not just match an existing solution, but to look for improved performance or reduced cost. Unparalleled access to technologies and manufacturing capabilities like drying, blending, emulsions, and particle size control enable improved usage rates or enhanced stability in a variety of processing conditions.

Let’s Unleash the Rainbow—Together

We understand that customer success is our success. Amidst a tumultuous regulatory environment and pressing consumer demands, Sensient is ready to help you unleash the power of color however best fits your needs.