MILWAUKEE — The shift toward naturally sourced colors presents an “outstanding opportunity” for Sensient Technologies Corp., said Paul Manning, president and chief executive officer.

“The conversion to natural colors, that is the biggest opportunity in the history of Sensient Corp., and it is probably the one I've been the most excited about in the 15-plus years I've been at this company,” he said in a Feb. 14 earnings call to discuss results for the fiscal year ended Dec. 31, 2024.

Sensient Technologies Corp. had net earnings of $125 million, or $2.96 per share on the common stock, which was up 34% from $93 million, or $2.22 per share, in the previous fiscal year. Revenues rose 7% to $1.56 billion from $1.46 billion.

In the Sensient Colors segment, revenue increased 7% to $648 million from $608 million. In the fourth quarter, revenue for Sensient Colors jumped 12% to $158 million from $141 million.

“Currently in the US there is a great deal of discussion around synthetic food colors,” Manning said. “With the focus from the new administration, the FDA's recent ban on Red 3, and certain state bans or restrictions of synthetic colors, the focus on natural colors is now getting more attention in the United States and Latin America.”

In Europe, naturally sourced colors are already the norm, he said.

“While this shift in the US reduces the demand for synthetic colors and new launches, overall, the shift to natural colors is an outstanding opportunity for Sensient,” Manning said. “Colors from natural sources are less highly concentrated than synthetic colors, and as a result, natural color sales volumes can be up to 10 times more than synthetic color sales volumes.”

Naturally sourced colors make up about 60% of the food and pharmaceutical revenue within the Sensient Colors segment, he said, adding Sensient sells about $6 million worth of Red No. 3 globally, which is less than 0.5% of total Sensient Technology Corp. revenue. The US Food and Drug Administration in the Jan. 16 issue of the Federal Register ruled that foods and beverages no longer may contain Red No. 3, effective Jan. 15, 2027.

“Sensient anticipated the potential shift from synthetic colors to natural colors more than 15 years ago,” Manning said. “Since then, we have made significant R&D capital supply chain and quality control investments. These investments allow us to deliver leading color technologies through a global network of R&D centers and production sites.”

Future regulations may focus on naturally sourced colors.

“Synthetic colors are among the most highly regulated food ingredients in the world,” Manning said. “For example, every single production batch of synthetic color is inspected and certified by the FDA. A market shift in natural colors must consider that there is currently no equivalent inspection and certification program.