NATURAL FOOD COLORS MARKET ANALYSIS

Market Concentration and Competitive Landscape

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The reliance on convenience and processed foods among increasingly time-pressured consumers has been a major factor driving the growth of natural food colors globally. With hectic routines and fast-paced lifestyles becoming the norm rather than exception in modern societies across both developing and developed world, people now have less time than ever to invest in cooking meals from scratch on a daily basis. As such, the demand for prepared, packaged and ready-to-eat convenience products has witnessed a sizable surge over the past few years.  However, health-conscious consumers are now actively seeking out products made using simpler, familiar ingredients over those containing long, chemical-sounding components that are difficult to recognize and pronounce. This rising preference for familiar, easy-to-understand ingredients has pushed major F&B companies to respond by shifting towards using natural colors derived from common sources such as fruits and vegetables instead of synthetic food dyes. For instance, companies are employing colors extracted from beets, carrots and other natural plant pigments to impart vivid hues to snacks, cereals and desserts in order to appeal to increasingly health-focused buyers. The COVID-19 pandemic has further accelerated this shift towards more natural food options, as lockdowns and restrictions made dining out less viable, driving up at-home food preparation. According to the United Nations Food and Agriculture Organization (FAO), global food commodity prices witnessed a significant increase between 2020-2021 as demand for basic staples and ingredients soared worldwide amid supply chain disruptions caused by the health crisis. This inflated the prices of synthetic colors derived from petroleum sources, incentivizing manufacturers to rely more on affordable, natural substitutes. Therefore, the long term impact of changing consumer attitudes aligning with health and sustainability together with economic factors is that natural food colors are expected to increasingly replace artificial dyes across major F&B categories over the coming years.