Big interview: Ted Nixon, chairman and CEO, DDWilliamson

DDW: We could be as big in natural colors as we are in caramel colors in 5-10 years

By Elaine Watson contact

- Last updated on GMT

Related tags: Natural colors, Caramel color, Color

DDW CEO Ted Nixon: The natural colors industry is still in its infancy
DDW CEO Ted Nixon: The natural colors industry is still in its infancy
Founded in 1865 - the year Lincoln was assassinated - DDW has been in the food colors business for an astonishing 148 years. But there’s no room for complacency, CEO Ted Nixon tells Elaine Watson during a visit to the firm’s HQ in Louisville, KY.

“We’ve not stayed in business this long because we’ve carried on doing exactly the same thing", ​notes Nixon.

"My grandfather ​[who joined DDW in 1896 when it was selling burnt sugars to brewers] probably could never have imagined that caramel color in soft drinks would ever be more than a niche. But as we know, the market exploded, and today we have 50% of the market.

“Likewise, back in the 60s my Dad probably never would have imagined that we’d need to look much beyond the USA, yet today, 75% of our business is outside the US and we have facilities in China, Swaziland, the UK, Brazil and Ireland.”

There are still big growth opportunities for caramel color in emerging markets

So what surprises are in store in the next 50 years? Nixon’s crystal ball is not quite that efficient, but he is prepared to go out on a bit of a limb by predicting that, “In 5-10 years, natural colors could be as significant as caramel colors for us, revenue-wise.”

This doesn’t mean caramel colors (and DDW sells more than 150 different types) lack some of their former luster, he stresses, just that DDW is doing what it always has, looking for the next big thing.

“There are still big growth opportunities for caramel color in emerging markets, even though cola volumes in the US are pretty flat", ​says Nixon. "We’re also seeing growth for caramel color in soy sauce, fish sauce, and petfood ​[dogs might be colorblind, he says, but their owners aren’t very partial to ‘grey’ food and caramel color imparts a nice meaty gravy color].

“But a few years ago we started to look beyond caramel color at other growth opportunities.” ​And natural reds, yellows, oranges and other shades were a logical progression, he says. 

DDW-founder
DDW was founded in 1865 by Dutch immigrant Douw Ditmars Williamson in New York to manufacture burnt sugars for the brewing industry

Acquisitions and partnerships

The first move into this space was a partnership with a California-based natural colors expert Colormaker in 2000.

In 2005, DDW snapped up the natural colors business of Indiana-based Artemis International (specializing in elderberry and chokeberry), and in 2006, it snapped up Wisconsin-based Dinesen Trading Co, which added annatto extract, turmeric, paprika oleoresin and red beet to its expanding natural colors empire, he says.

“We’re also looking at new partnership and acquisition opportunities.”

The industry is really still in its infancy

So will the US market ever revert completely to natural? Not unless prices come down and technology improves to tackle ongoing challenges in heat, light and pH stability associated with certain applications, he says.

“Technology is improving all the time - for example we have recently developed some proprietary oil dispersible technology that opens up new opportunities in seasonings, spray coatings, decorative sugar, compound coating, dairy spreads and buttercream icing - but the industry is really still in its infancy.”

DDW-Jennifer-Brown-Campbell-Barnum-Jody Renner-Nantz
L-R: Global application scientist Jennifer Brown, VP branding and market development Campbell Barnum, and global application scientist Jody Renner-Nantz

While all the different natural colors players have different areas of expertise, and some are experts in just one or two source materials, the key to longer-term success is having global reach, a broad portfolio - so you can be a one-stop-color shop and maximize opportunities to blend multiple shades, superior applications people, and complete control over your supply chain, from field to customer, says Nixon.

There are all these distributors that have glossy brochures, but they have never visited the plants they are sourcing materials from

“We’ve been investing very heavily in basic research and applications people, but we have also invested a lot in analytical capabilities, and end-to-end supply chain assurance. I think going forward, this is increasingly important to customers as concerns over adulteration, food safety and traceability increase.  

DDW-annatto2
DDW is a leading supplier of annatto-derived natural colors

“While there are smaller players in the natural colors market, they are going to struggle to compete in this space in future. But we still see people at IFT that we wouldn’t buy products from.”

He adds: “There are all these distributors that have glossy brochures, but some of them have never visited the plants they are sourcing materials from.

“We’ve had cases where we’ve been looking to source products and found that only a very small percentage, and in some cases, zero percent, of the suppliers we've looked at, can meet the requirements we set.”

Click here​ to see a picture gallery of our visit to DDW’s global HQ in Louisville, KY, and hear more from DDW on 4-MEI, GMOs, raw material prices and the latest application-specific challenges in the natural colors arena.

Watch our on-demand webinars exploring the latest trends in natural and clean label at Natural & Clean Label Trends 2013.

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