Consumers want cleaner product formulations, but they don’t necessarily want to give up the visual appeal that they’re used to seeing on some of their favorite food products. According to a study by Emerald Insights, 90% of consumers make decisions about purchasing a product based on its color and perceived taste.
One of the fastest ways for an ingredients company to increase its offerings in the emerging natural colorings space is to acquire a company that already has a proven portfolio of options. Secna can trace its history back to 1961, and has a history of work with natural red and purple pigments.
The move also aligns with EQT’s plans for the color company. At the time of the acqusition, EQT said it wanted to grow the color maker through acquisitions of other natural colors companies, especially because the market is highly fragmented. This acquisition brings more expertise — and more reds and purples — to augment the color company’s offerings and business. Chr. Hansen Natural Colors CEO Odd Erik Hansen told Food Navigator the deal is helping the company cement its journey toward being the world’s top provider of natural colors, and Secna’s grape extracts complement its existing business.
Natural colors have been problematic for some manufacturers because they do not always create the same spectrum of radiant shades that consumers are accustomed to seeing. Consumers have said they want more natural colors, but don’t always want to purchase the products made with them. The conundrum led General Mills to bring artificial colorings back to its Trix cereal after consumers complained that the natural colors the manufacturer used were dull and depressing.
For EQT and its natural color company, the fragmentation and challenges in the space appear to be more of an alluring opportunity to stake out a solid share of the market. It’s made recent strides in creating new and vibrant natural colors. Prior to the acquisition, the color company debuted two new plant-based food colorants for confections: a blue derived from spirulina and a yellow derived from turmeric. It also reported making headway in developing a natural fire-engine red food coloring using a trademarked sweet potato variety in 2019.
But Chr. Hansen Natural Colors faces stiff competition from others who also see opportunity in natural colors. Danone Food North America launched a line of organic, sustainably sourced colors for food and beverages in 2019 while Kalsec has been producing natural colors and ingredients since it was founded in 1958. GNT Group introduced a high-intensity blue food coloring also made from spirulina in 2019. Archer Daniels Midland has patented a natural blue tone derived from tropical fruit.
The more natural color options there are on the market, the more selective food manufacturers may become as they try to keep consumers satisfied with the visual appearance of food. But if Chr. Hansen Natural Colors continues its acquisitive strategy, there may eventually be fewer providers from which to choose.