Natural Colours: Essentials Not Just Options

Strategy Briefing

About This Report

Jun 2015

Use of colour is vital in giving fmcgs the visual appeal to attract consumers. Natural colours, specifically, are mainly used in food and beverages, and pet food, with the popularity of these ingredients rising due to concerns surrounding alternatives. This report discusses the trends driving natural colour growth, as well as the growth prospects for natural colours in different regions and key product areas. The importance of synthetic colours in certain regions and categories is also considere

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Natural Colours: Essentials Not Just Options

Inconsistent natural colour regulation

There is no clear cut definition of a natural colour. Consequently use of the term “natural colour“ is often left to the discretion of manufacturers, leading to inconsistency in its application and confusion for consumers.

Natural trend drives growth

The Southampton study was key to increased use of natural colours; however, much of this was confined to Western Europe. More recently, consumer desire for “all natural” products has boosted natural colour growth in other regions.

Colouring foodstuffs could impact future growth

Natural colours are considered additives by most legislators, rather than ingredients in their own right, like colouring foods. Consequently, colouring foods are more likely to appeal to manufacturers looking to produce a “clean label” product.

Progress made in sourcing natural colours

Manufacturers have taken steps to safeguard the production of natural colours, and to be in a better position to cope with increased demand. There are also a wider variety of natural colours available.

Investment still needed

Several applications are still using synthetic colours, as questions remain over natural colour stability and suitability. Investment is needed to provide cost-effective natural colour solutions for all applications.

Growth will come from developing markets

Natural colour growth in developed markets has started to stall, as there are few products left to convert. Conversely, strong growth is forecast in developing markets as the natural trend takes hold.

Substantial caramel colour contribution

Two of the largest natural colour consumers are carbonates and pet food products. Much of this is based on substantial use of caramel colours. This could be an issue going forward due to controversy surrounding caramel.

Introduction

Scope
Key findings
SWOT
What are natural colours?

Demand Drivers

The importance of colour
N atural and clean label wield increasing influence
Colouring foodstuffs tap into clean label
The Southampton study’s enduring influence

Supply Drivers

Suppliers identify new methods to cope with sourcing issues
Natural colour limitations remain
Caramel comes under fire
Natural colours attract a variety of companies
Focus on Chr Hansen

Regional Analysis

Natural colours dominate global colours industry
Increased natural colour presence in developing regions
Consumption habits consistent across regions
Few changes in top natural colour consuming countries
Future natural colour growth rooted in developing markets
Synthetic colours still relevant in a diverse range of markets

Category Analysis

Natural colours thrive but still have room to grow
Synthetic colour presence remains in food and beverage
Soft drinks still on top
Scope for further growth in non-cola carbonates
Regional divides in carbonate use
RTD tea becomes key to natural colour growth
Future opportunities in confectionery
Confectionery companies commit to natural colours
Natural colours strong in dairy products
Natural colours in pet food

Recommendations

Investment and clarity the key to future growth
Key development areas

Definitions

Data parameters and report definitions