U.S. FDA Officially Phases Out Petroleum-Based Synthetic Color Additives

The U.S. Food and Drug Administration (FDA) has issued a final order revoking the approval for 'Orange B,' a petroleum-based color additive used in food, and has proposed an order to revoke the approval for 'Citrus Red No. 2.' This action is part of the U.S. government's 'Make America Healthy Again' initiative, which aims to modernize food safety standards. By formally withdrawing approvals for substances that have long been phased out of the food industry, the FDA is laying the groundwork for regulatory reform. This administrative decision serves as a strong warning that it is not merely a reactive measure but will lead to stricter regulations on a broader range of synthetic additives in the future.

The End of an Era for Sausages and Orange-Coated Products

Specifically, 'Orange B' was previously permitted for limited use in coloring the casings of products such as frankfurters, but it has not been actively certified since 1978 and has effectively disappeared from the market. 'Citrus Red No. 2,' used to color the surfaces of citrus fruits, has also seen no certification requests since 2020, indicating that industry demand has virtually disappeared. By eliminating these obsolete and ineffective approvals, the FDA aims to remove legal regulatory barriers and enhance supply chain transparency. The regulatory agency's cleanup of outdated approvals signals to food manufacturers that they must move away from the practices of relying on petrochemicals.

Global Supply Chain Restructuring Centered on Natural Alternatives

The revocation of these synthetic color additive approvals will serve as a catalyst, forcing global food manufacturers to fully transition to natural colorants. The global food color market is estimated to be worth between $3.7 billion and $5.1 billion by 2026, and the trend toward clean labels is driving growth in the natural ingredients sector. Major food companies will need to quickly restructure their raw material supply chains to secure plant-based alternatives such as beetroot red and spirulina extract. This will create new opportunities for bio-companies with natural extraction technologies to expand their revenues and form technology partnerships.

Additional Phase-Out of Six Remaining Synthetic Color Additives and Market Outlook

The food industry and investors should note that this action is not the end but only the beginning. The FDA is already encouraging the voluntary phase-out of six key petroleum-based dyes, including 'Red No. 40' and 'Yellow No. 5.' Existing raw material manufacturers that rely on the cost competitiveness of synthetic colors will face significant profit declines, and market leadership is likely to shift to companies that quickly secure a portfolio of natural colors. Investors should focus on the valuation premium of leading companies that proactively establish sustainable and environmentally friendly raw material ecosystems in the long term, rather than short-term cost increases.