US food companies face a growing gap between natural color demand and supply, with tariffs and safety concerns compounding the pressure. Major manufacturers have set 2027 deadlines to remove synthetic dyes, but current production levels are not keeping pace with the required shift.
Supply Shortages Threaten Reformulation Goals
Major food brands have committed to eliminating synthetic dyes by the end of 2027. Walmart’s private label deadline is January of that year. General Mills has already completed 90% of its US retail portfolio conversion. The commitment spans a wide range of companies, including General Mills, Kraft Heinz, Nestlé USA, Conagra, Tyson, Hershey, and Kellanova.
However, the supply chain cannot support this timeline. The United States certified 21.4 million pounds of FD&C dyes in 2025, compared to just 12 million pounds of non-FD&C alternatives. If demand surges by 400% to 500%, the available supply will fall short. Reformulating a single product line can cost between $50,000 and $500,000, and developing a full color system takes three to four years.
China provides 76% of the world’s paprika’s capsanthin, and India provides 86% of curcumin. If procurement ramps up early, RTI projects average price increases of 516% for non-FD&C colorants, with curcumin facing a potential 1,600% increase. Oterra is developing a precision-fermented Red 40 alternative, but it will not be commercially available for three years, which is past most 2027 deadlines.
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Upstream Costs Rise Amid Trade Disputes
Tariff inflation has moved from goods prices to consumer-facing inflation. The Minneapolis Fed confirms that the relationship between tariffs and inflation turned “markedly positive” as of July 2026. Tariffs contributed 0.2 to 0.4 percentage points to core PCE inflation, which stands at 3.3% year-over-year. This is the highest rate since 2023. The New York Fed’s business survey indicates firms plan additional tariff-related price increases ahead. Core inflation would remain roughly 1 percentage point above the Federal Reserve’s 2% target even without the added pressure from tariffs.
Trade disputes are also creating a fertilizer problem. The United States imports more than 80% of its potassium from Saskatchewan. Canadian retaliatory tariffs of 15% to 50% took effect on roughly $20 billion CAD of US agricultural goods. An April 2026 Farm Bureau survey found that 70% of US farmers could not afford needed fertilizer during spring planting. The soil nutrient depletion from reduced fertilizer applications does not resolve when tariffs lift; yield effects tend to carry forward. During the 2018 US-China dispute, American agricultural exports to China fell by $7 to $10 billion annually as buyers shifted to Brazilian suppliers.
Safety Concerns Undermine Consumer Confidence
Consumer trust in the food safety system has weakened as recalls become more frequent. A September 2026 GS1 US survey found that 94% of US adults are concerned about the frequency of food recalls, up from 93% in 2025. Additionally, 67% of consumers avoid entire product categories following a recall, a jump of 7 points from the previous year. Sixty-six percent are also hesitant to repurchase from the same brand, also up 7 points. Trust in the recall system itself is declining, with 80% of adults believing recalls protect public health, down from 85% a year ago.
The summer of 2026 provided a stark example of these trends. More than 17,000 confirmed cases of cyclosporiasis were reported, along with 922 hospitalizations and 2 deaths. The outbreak was traced to iceberg lettuce from Taylor Farms, which distributed to major retailers including Target, Taco Bell, Whole Foods, Kroger, Walmart, Costco, and Jack in the Box. The Federal workforce is thinning, with the CDC down 28% since December 2024 and the FDA down 23%. Parasite surveillance staff at the CDC fell from 11 to 3 people. Experts noted that FSMA traceability rules enacted over a decade ago remain unenforced, and this lack of enforcement could have accelerated both the outbreak investigation and the initial recall response from Taylor Farms.
