The transition away from artificial colors is a large, complex, time-sensitive initiative for food and beverage companies. Even with synchronized efforts across research and development, marketing, procurement, manufacturing, quality assurance, and regulatory compliance, it will be disruptive.
As with any reformulation, while R&D and marketing are driving change, smart F&B operations executives aren’t waiting for new recipes to get started. They’re running tests and preparing to adapt purchasing, production, cost structures, and more.
Here’s how.
Supply Chain Overhaul
Natural dyes tend to be less stable than artificial dyes. For example, beet-based red can turn brown in alkaline food and blue from spirulina algae degrades in acidic food. They have a shorter shelf-life and may require special handling like refrigeration. Add in seasonality and a sudden increase in demand, and it’s no wonder natural colors are more expensive and limited in supply.
Operations leaders will need to act quickly. Collaborate with procurement to work with current supply chain partners and identify and vet new sources, evaluating lead times, capacity, costs, and seasonality. Lock in contracts as soon as possible.
Manufacturers may need to forge new partnerships with specialized suppliers or even support them in expanding capacity. Smaller manufacturers might band together or use third-party brokers to gain bargaining power for scarce ingredients.
Keep in close communication with suppliers to get early warnings of any issues or opportunities. Consider diversifying sources and holding more inventory on the most critical colorants. And ensure storage, shelf-life, and handling protocols are in place for more sensitive ingredients.
Chemistry Test
As R&D is considering alternatives, run tests on samples for temperature, humidity, ingredient combinations, and multiple process steps. How will the colors react to your equipment, and vice versa? Equipment may require recalibration and different cleaning protocols to avoid cross-contamination. For example, if a natural color is prone to carry allergens or is sensitive to trace chemical residues, cleaning routines between production runs might need enhancement. Batch sizes might need to be smaller because natural colors have shorter shelf lives and may not be available in large quantities. Store products under various conditions to see how well color and quality hold up over time.
This helps operations inform R&D of real-world process limitations before they finalize a formulation that’s hard to scale. Collaborate with the quality team, as well, to begin defining quality control specs and color benchmarks.
Cost and Margin Management
Natural dyes’ higher cost—along with the potential need for capital investments in equipment, cold storage, and additional lines—will squeeze margins. Work with finance to begin planning as soon as possible.
Consider investing in demand planning and advanced production scheduling technology, so you can run scenarios and forecast new capacity and COGS. Such software can also help you look for efficiencies elsewhere to protect margins.
Begin Change Management
Production processes will change due to line segregation needs, new cleaning protocols, smaller batch sizes, and different mixing speeds and durations. Proactively communicate with internal teams, as well as co-packers and third-party logistics partners, why changes are happening to gain buy in.
Align with R&D and other departments to make sure everyone’s on the same page on timelines and priorities. If sales promises something that manufacturing can’t deliver, you could lose customers.
Keep in mind that teams—and their leadership—might face burnout due to the accelerated timeline and complexity. Indeed, many companies are also executing initiatives around recyclable packaging and reshoring supply chains. Consider bringing in program leadership or temporary staff, or reassigning less critical tasks off the core team.
For insight on turning a disruption like food-dyes elimination into a catalyst for improvement, read From Mandate to Momentum: Why the Artificial Colors Ban Is a Strategic Opportunity for Food Companies.
