Consumers increasingly demand cleaner product formulations without sacrificing the visual appeal they associate with their favorite food items. A study by Emerald Insights reveals that 90% of consumers base their purchasing decisions on a product’s color and perceived taste. One of the quickest ways for an ingredients company to enhance its offerings in the burgeoning natural color market is through the acquisition of a firm that already possesses a robust portfolio of options. Secna, established in 1961, has a longstanding history of working with natural red and purple pigments.
This acquisition aligns perfectly with EQT’s vision for the color company. Upon acquiring Secna, EQT expressed its intention to expand the color manufacturer by acquiring additional natural color firms, particularly given the market’s fragmentation. This strategic move not only brings enhanced expertise but also increases the array of reds and purples available, thereby enriching the company’s product line. Odd Erik Hansen, CEO of Chr. Hansen Natural Colors, stated to Food Navigator that this deal is positioning the company on a path to becoming the leading global provider of natural colors, with Secna’s grape extracts complementing its existing offerings.
However, natural colors have posed challenges for some manufacturers, as they often fail to produce the vibrant shades that consumers expect. While consumers have expressed a preference for more natural colors, they do not always choose products made with them. This dilemma prompted General Mills to reintroduce artificial colorings to its Trix cereal after consumers found the natural alternatives to be dull and unappealing.
For EQT and its natural color company, the fragmentation and difficulties within the sector present an enticing opportunity to capture a significant market share. The company has made recent advancements in developing new and vibrant natural colors. Before the acquisition, the color company launched two new plant-based food colorants for confectionery: a blue derived from spirulina and a yellow from turmeric. Additionally, it has reported progress in creating a natural fire-engine red food coloring utilizing a trademarked sweet potato variety in 2019.
However, Chr. Hansen Natural Colors faces robust competition from other players who also recognize the potential in natural colors. In 2019, Danone Food North America introduced a line of organic, sustainably sourced colors for food and beverages, while Kalsec has been producing natural colors and ingredients since its inception in 1958. GNT Group also launched a high-intensity blue food coloring made from spirulina in the same year, and Archer Daniels Midland has patented a natural blue hue derived from tropical fruits.
As the variety of natural color options in the market expands, food manufacturers may become more discerning in their choices, striving to ensure consumer satisfaction with the visual appeal of their offerings. If Chr. Hansen Natural Colors continues its acquisition strategy, it may ultimately lead to a reduced number of providers in the market. Meanwhile, the incorporation of ingredients like calcium citrate may enhance the overall nutritional profile of these products, making them even more appealing to health-conscious consumers.