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    Features

    Flavors & Colors: Opportunities for Clean Labels

    More companies are starting from scratch with natural sources of colors and flavors.

    Flavors & Colors: Opportunities for Clean Labels
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    By Amanda Baltazar, Contributing Writer 07.02.18
    A few years ago, Trenton Shutters was having difficulties in school and his personal life. He was having nightmares—when he finally managed to fall asleep—and was riding an emotional roller coaster. His mom put him on an elimination diet and concluded that artificial dyes were the culprit.

    Like many Americans, Trenton is allergic to certain colors or flavors that are often added to food. Increasingly, consumers are looking for products that are free from these artificial additives. Consequently, leading food and beverage manufacturers are reformulating their products, or launching new, more natural varieties.

    For example, Talking Rain Beverage Co., Preston, WA, recently changed the formula for its Sparkling Ice line of zero-calorie flavored sparkling waters. After receiving requests from customers, the company conducted extensive marketing research and sensory testing over the course of two years, and sought data from more than 8,000 people to ensure it replicated its Sparkling Ice beverages perfectly.

    It was important to replicate both the colors and the flavors of its popular drinks, said Erik Throndsen, vice president of research, development and innovation for Talking Rain.

    Sparkling Ice first underwent this process in order to launch its products in the U.K. in 2015, where it steered clear of some of the artificial colors that are allowable in the U.S. market. “There were no expectations there since the product was new. It really started us out on that step in the U.S.,” Mr. Throndsen said. “We had to look into how does it impact the flavor, shelf life and cost,” in addition to changing the hue. Sparking Ice worked closely with several flavor companies and ran many blind tastings with consumers.

    Consumer Demand
    Last year, Otis Spunkmeyer removed all artificial colors and flavors from many of its products, which impacted its lines of snack cakes and frozen foodservice cookies the most. The renowned brand also eliminated artificial flavors and colors from its Supreme Indulgence portfolio, its ultra-premium line, and from nearly a dozen of its Sweet Discovery portfolio items (which includes the No. 1 selling frozen cookie dough in the U.S.) and its individually wrapped Grab’N’Go portfolio.

    It took a year to get these categories up to snuff, and the company is continuing to evaluate other food lines in which it can “maintain our margin and provide value to our loyal customers,” said Greg Tompkins, senior vice president, R&D/commercialization, Aryzta (the parent company of Otis Spunkmeyer).

    The company’s decision to eschew artificial ingredients came from “a combination of consumer demand and also our desire internally to differentiate our foods from similar snack foods,” Mr. Tompkins said.

    Otis Spunkmeyer used its own R&D team to do a lot of work internally, but shifted to its flavor and color supplier when it met insurmountable problems. “The advantage of having the ability to do it internally is that your team can do tests quickly because you’re in total control of the timeline,” Mr. Tompkins said. “The advantage of working with an external partner is that you’re able to work with subject matter experts who are hyper-focused on colors and flavors. They provide a depth of experience with the ingredients that the internal R&D team might not possess.”

    Chicago, IL-based beverage company Poppilu approached product development a little differently, by starting out with all-natural flavors and colors. The company’s three flavors of antioxidant lemonade are all infused with aronia berries, which not only impart a pink hue to the drinks, but are also high in antioxidants.

    “Consumers simply don’t want artificial anything anymore,” said Melanie Kahn, founder of Poppilu. Making pink lemonade wasn’t Ms. Kahn’s goal; she simply wanted to manufacture a healthy lemonade. “We decided to add aronia for that extra health boost. But now we realize we can create natural pink lemonade that carries health benefits, so that’s how we position the brand. So it’s a win-win using aronia: health plus a distinct color. The color is not as important to us as the functional benefit. But the color does become an ‘ownable asset’ for the brand.”

    Clean Label Momentum
    It may be easier for brands to formulate with natural flavors and colors from the beginning because consumers, as Sparkling Ice found on British shores, don’t have expectations of what the product should taste or look like yet.

    However, many established companies are reformulating much-loved products to comply with clean label demands from a discerning consumer base. Simplicity and transparency are among the top factors influencing purchases.

    “Today’s consumers are more food literate than ever before,” said Melissa Abbott, vice president, retainer services at The Hartman Group in Bellevue, WA. “More and more consumers consider themselves label readers, turning to ingredient panels and nutrition facts to determine the healthfulness and quality of products and the integrity of the manufacturer.” Often, she added, consumers don’t even seek out this information; it comes to them unheeded through word of mouth or their Facebook feed.

    Clean labeling, for the most part, boils down to two things: natural/organic claims and products that are free from artificial ingredients.

    This movement really started to gain traction in 2015 when household name brands such as Campbell Soup Company and Kraft pledged to go more natural. Since then, the restaurant realm has followed, with Chipotle, McDonald’s, and even Dunkin’ Donuts—renowned for its brightly hued, sprinkle-topped sugary spheres—jumping on the bandwagon.

    But changing a beloved product’s formulation is no easy task. For example, two years ago, General Mills announced it would remove all artificial colorings from its iconic Trix cereal, but once it had launched the “cleaner” product it faced some customer backlash from people who missed the green and blue puffs, which couldn’t be replicated.

    But for the most part, consumers are embracing these reformulated products, and according to Research Nester (Brooklyn, NY), the global natural food colors market is expected to flourish at a CAGR of 7.8% between now and 2023.

    Market research company Mintel (Chicago, IL) reported that of global food and drink products that contain food color ingredients, the share of products launched with artificial colors decreased from 24% to 19% in the five years between November 2012 and October 2017.

    In a survey last year by GlobalData, New York, NY, consumers were asked “Which of the following would make you more likely to choose one brand over another?” Of the eight possible answers, natural ingredients was far and away the largest single factor, with 35% of Americans saying it would make them more likely to choose one brand over another.

    These natural colors and flavors are derived largely from plants, though insects and bacteria can also serve to replace synthetic products made, for the most part, from petroleum. To produce strong flavors without resorting to fake ones, companies are often turning to food science. For example, True Citrus offers lemonade ingredients that include crystallized lemon, which is made from citric acid, lemon oil, and lemon juice.

    A Growing Market
    The expanding clean label market has given consumers fresh options in a wide range of categories. Kids’ foods (since parents tend to put their kids’ health first) functional beverages, and meal replacement bars (consumed largely by exercisers who are also seeking the cleanest of labels) are perhaps the best places to start.

    However, according to GlobalData, savory snacks are also rife with food products touting their lack of artificial colors, with 9% of launched food claiming to contain only natural colors. Promoting free-from artificial flavors is also popular within this category.

    Flavor agency Foodarom sees the most demand for all-natural colors and flavors from nutraceuticals companies. “They are more bothered by flavors and want to be accepted by those consumers who are aware of the labels,” said Sara Mariño, research and development manager and senior flavorist in the company’s R&D laboratory in San Diego, CA.

    As for the split between the food and beverage markets, Technavio, a market research firm headquartered in London, estimated that the global food industry accounts for the largest market share in natural colorants (66%), while the beverage industry accounts for 34%; for flavors the split is food 65%, and 35% in beverages.

    In the past couple of years, Orange, NJ-based color and ingredient supplier Lycored has used natural colorants derived from lycopene and beta-carotene in UHT milk drinks, surimi seafood coatings, fruit preparations, and flavored still and sparkling water. “Another interesting category is confectionery—we’re finding that our carotenoid-based colors perform very well in vitamin-enriched gummies and hard coated candy for example,” said Christiane Lippert, head of food marketing.

    Roadblocks
    Changing food and beverage ingredients is not an easy path to tread. “The use of natural colors can involve significant reformulation. The exact shade and intensity of natural colors can be affected by a number of factors, including temperature, pH, and light exposure. Each factor at each step of the production process must be considered when using natural colors,” said Christine O’Keefe, an analyst with The Freedonia Group, Cleveland, OH.

    Synthetic colors are extremely stable, whereas natural colors tend to be less intense. As General Mills discovered with Trix, though, Ms. O’Keefe said, “this can in part be overcome by using greater dosages of natural colors, but this may affect other qualities of the final product.” Though this brings another set of problems since some natural colors have associated off-flavors at higher dosages, such as anthocyanins from red radishes.

    All of these factors can lead to a less stable product, meaning it can have a shorter shelf-life. Carmine, which gives an orangey-yellow color, is stable to heat but can migrate badly, according to Ms. Lippert, so many manufacturers are starting to replace it with lycopene, which offers stability without migration, as well as a longer shelf life.

    There’s another difficulty with carmine in that it’s derived from insects, meaning it’s not vegan, kosher, or halal. And then there’s the question of how to reproduce cotton candy or bubblegum flavor using natural sources.

    When it comes to flavor, taste is essential of course, but texture matters as well. Many natural products can cause foods to taste bitter, or leave a dry sensation in the consumer’s mouth, said Foodarom’s Ms. Mariño. When using natural flavors, it’s often important to use masking agents, she added. These can help the reformulated products have a better mouthfeel or change an aftertaste, for example. Masking agents can also be natural products, she added, though they’ve often been blended with chemical agents.

    For Otis Spunkmeyer, it wasn’t so much a challenge to find natural flavors and colors as it was to formulate with them. “When it comes to colors, natural colors tend to be less bake-stable and fade quickly over time, versus artificial colors that stay vibrant,” said Mr. Tompkins. “When Otis Spunkmeyer reformulated foods to be free from these ingredients, we worked with natural color stabilizers to keep colors from fading.”

    The Bottom Line: Cost
    Although natural colors are more expensive than synthetic colors, a little can go a long way, so the cost difference to consumers is often negligible. The bigger impact, according to Ms. O’Keefe, comes from reformulation costs, and that process can take time.

    “The dosage required to deliver a shade that is close, or sometimes better, tend to be relatively low, so a little goes a long way,” said Ms. Lippert.

    But all colors and flavors are not created equally. For example, according to Technavio, “for natural coconut flavorings, a chemical called massoia lactone is required. This chemical is obtained from the bark of the massoia tree, in Malaysia. The process of obtaining this chemical is quite expensive as it involves harvesting the tree, removing the bark [and] extracting the lactone.”

    During its R&D process, Otis Spunkmeyer found that real vanilla costs three to four times more than artificial vanilla. And removing artificial colors wasn’t a cheap endeavor for Sparkling Ice either; Mr. Throndsen estimated that natural colors cost about 15 times more than artificial alternatives. But the cost of the beverage to consumers has not changed. “This adds value to the consumer and we think this is the right thing to do.”

    For consumers looking to eat better-for-you foods—or maybe more importantly, feed them to their children—cost may not be a priority. “Consumers are generally willing to pay more, provided it’s not an outrageous difference for natural flavors/colors in categories that they feed to their children,” Ms. Abbott from The Hartman Group said. “This is why consumers have moved away from legacy brands over the last five to 10 years and sought out more niche producers who were offering natural versions of mainstream products—often at a premium.”

    The word “natural,” it seems, is key to selling these products. However, the term presents some challenges for companies. Mercury is natural, after all, but that doesn’t mean it’s healthy.

    Ultimately, consumer perceptions and associations with healthy are more meaningful, according to Tom Vierhile, innovation insights director with GlobalData. In the company’s 2017 fourth quarter survey it asked consumers what healthy means to them. Out of 15 possible responses, the top choice was that “natural” equated to “healthy,” selected by 56% of respondents.

    “The big takeaway here is that consumers tend to associate ‘natural’ with ‘healthy’ and this explains why companies are removing artificial colors and flavors, and replacing them with natural colors and flavors,” said Mr. Vierhile. “Perception is everything, and natural is perceived to be better and more healthful, regardless of whether or not this is actually the case.”  
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