In January 2025, the FDA banned synthetic food dye Red No. 3 under the Delaney Clause due to concerns over health risks. The food and beverage industry, which uses Red No. 3 widely in products like candy and desserts, has until January 2027 to complete reformulation. These regulatory shifts require strategic planning for category managers to communicate effectively with consumers throughout the process of product redevelopment.  

In addition to the federal ban, the California Food Safety Act banned Red No. 3 and similarly harmful substances by January 2027. Utah, Virginia, Arizona, and West Virginia recently followed California’s lead by passing their own laws in 2025. The FDA and HHS also announced plans to phase out additional petroleum-based synthetic dyes in April 2025, including Red No. 40, Yellow No. 5, Yellow No. 6, Blue No. 1, Blue No. 2, and Green No. 3. 

The recency of these new guidelines reflects increasing pressure on food and beverage companies to remove synthetic colorants and test alternatives. This pressure builds on consumer demand for natural foods and a growing desire to understand the health implications of products.  

With more than 36,000 food products in the U.S. containing Red No. 40 and 8,000 containing Red No. 3, the task of removing these dyes requires thorough planning. Category managers must consider implications for product development, supply chain, packaging, and consumer sentiment to navigate regulatory changes. Below, we’re discussing how companies are responding to the red dye ban.

Reformulation and Product Impact 

A vast range of both food products and carbonated or acidic beverages rely on synthetic colorants to maintain their appearance as marketed. Red 40 provides a stable color for soft drinks, but natural alternatives like beet or anthocyanin require more pigment yet result in a less vibrant color. Beverage companies must then explore further adjustments like reformulated acidulants. 

Color is a critical component of product appeal and marketing because consumers create a strong connection between color and flavor, displaying less favorable responses to products with the same taste but a different shade. A study on commercial orange juice revealed that variations in red and green hues can significantly influence how much a consumer expects to like a beverage and its perceived sourness.  

Category managers should collaborate with R&D to consider natural colors in earlier stages of product development due to the challenges that arise later in the process. It can take six months to a year to convert one product from a synthetic dye to a natural one, and three to four years to acquire enough supply of botanical products for an industry-wide shift. 

Commonly used natural alternatives include beet juice concentrate, purple carrot, anthocyanins from berries, and paprika. To properly incorporate these, companies must address nuances in seasonal variability and pH sensitivity. Despite these hurdles, food giants like Kraft Heinz, General Mills, and Nestle are paving the way in the U.S. by making commitments to remove artificial dyes from their well-known products. Globally, companies can learn from decades of success in Europe, where natural alternatives have proven to be commercially successful. 

Supply Chain and Packaging 

As companies begin reformulating products, demand for natural dyes will increase significantly, creating bottleneck risks. Scaling biological crops and extracts requires time and investment, and price volatility is uncertain during the transition.  

A poor harvest or logistical disruption can create spot shortages for major food and beverage producers, but long-term contracts or investment in supplier capacity can mitigate these concerns. Additionally, natural colorants used must be approved for that use in products and vetted for contaminants. Companies will need to validate supplier testing regimes and COAs (Certificates of Analysis) more rigorously than for synthetic dyes. 

Optimization for supply chain efficiency will be accompanied by innovation in packaging to protect light- and oxygen-sensitive natural reds. Many beverage brands may shift to tinted glass, UV-blocking PET, or secondary packaging like sleeves or cartons. These changes affect packaging suppliers and costs because they increase production complexity, but such shifts are necessary to comply with regulatory standards. 

Higher ingredient and packaging costs may drive up retail prices, requiring category management teams to balance margin pressures with consumer willingness to pay for naturally colored products. In fact, it’s currently estimated that natural colors cost 10x as much to produce as synthetic versions, so category managers should prioritize risk management strategies alongside adoption. Taking action to limit the overall cost for raw materials and finished goods will lead to better purchase options for consumers. 

How to Get Started 

To tackle product reformulation and supply chain disruptions, organizations should begin with a portfolio audit, as it’s crucial to identify which products to prioritize based on state and federal regulations and visibility. Engaging with raw material suppliers early also helps ensure scalability, quality, and regulatory compliance. Utilizing PLM best practices at this stage helps category managers drive change across multiple products. 

When examining the best alternatives for synthetic red dyes, companies should stay updated on new natural color additives recently approved by the FDA to make the transition as smooth as possible. To test these dyes, food and beverage prototypes can be useful in smaller markets or limited batches.  

In addition to cost implications, factors like consumer acceptance, color stability, supply constraints, and shelf life should be monitored. Though these policies are only beginning to take effect in the U.S., Europe banned Red No. 3 in all food products except processed cherries in 1994, so global companies can draw on this precedent for guidance. 

Cross-functional collaboration among R&D, regulatory, supply chain, quality assurance, and marketing teams improves efficiency from initial research to future implementation. Teams can work together to manage trade-offs in a way that aligns with the company’s objectives and timeline. To communicate effectively with consumers, transparent marketing can provide education on what changes are being made and why.  

As consumers purchase reformulated products, it’s critical to ensure their understanding of the positive impacts of natural colorants. By highlighting implications for health and sustainability, companies can build loyalty and trust in the face of regulatory shifts. Proactive messaging on both digital channels and in-store can contribute to a cohesive national category story, and packaging can continue to market the company’s innovation. 

Looking Ahead 

The regulatory, health, and consumer landscapes intersect with the red dye ban. Food and beverage companies must respond thoughtfully to their product formulations and strategically with customers to ensure sales continuity with natural colorants.  

Considerations ranging from product reformulation to packaging and supply chain management pose challenges for the industry, but companies that are prepared to innovate can differentiate themselves from competitors through brand growth. To continue the discussion, contact Clarkston today. 

Contributions by Hannah Yang