Reformulating foods and beverages to meet regulations around dyes and additives requires research and development expertise, and supply chain and business changes that can be simplified with software like that provided by Blue Yonder and others.
This year, FDA rescinded its authorization of Red No.3 due to animal studies and a legal technicality, while President Donald Trump’s confirmed head of HHS, Robert F. Kennedy Jr., is setting his sights on scrutinizing food additives as a key priority.
Additionally, a litany of statewide food additive bans and regulations presented reformulation challenges to many food and beverage companies over the last several years.
California was the first to act — banning propylparaben, brominated vegetable oil, Red Dye No. 3 and potassium bromate effective January 2027 — Pennsylvania, Illinois and other states proposed regulations targeting similar food ingredients.
These regulations are changing consumer perception of certain products, which will pressure CPG companies to take a more proactive approach, potentially pushing up reformulation timetables, Tom Gregorchik, VP of industry strategy of consumer goods and food and beverage for supply-chain management company Blue Yonder.
“There is a good majority of people that are going to turn over the label and say, ‘Do I want to consume this now even though it is not technically banned yet? Is this something that I really want to ingest?’ There is definitely going to be an inventory management component on that, looking at demand because something that does get into the headlines does get into consumers' heads,” elaborated Gregorchik.
‘It is not just your company going after a new source — it is everyone else, too’
Simply finding an ingredient provider to supply a natural food dye over an artificial food color like Red No. 3 is not enough to ensure the long-term success of a reformulated product, noted Gregorchik. CPG companies must ensure that the supply chain is robust enough to support an entire product category or industry over a long period of time, he added.
“It is not just your company going after a new source — it is everyone else too. You want to make sure that you have ample sourcing to support that demand, not just from your own company’s perspective,” Gregorchik elaborated.
Flavors and colors in focus: From emerging consumer demand to new manufacturing strategies
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Additionally, changing food ingredient providers impacts taste, texture, product demand and price, he noted. Blue Yonder offers supply-chain software for CPG companies to forecast how much these reformulations cost and future demand with the help of AI.
“Sometimes, we see products that naturally cost a lot more, and the demand is not nearly as high as something that does have additives,” said Gregorchik “At the end of the day, a consumer wants to be delighted by the products that they are consuming but also they want to make sure it is at the right cost that yields value to them.”
Since many food regulations often take effect years in the future, food and beverage companies can strategically test local markets first and ease into a national launch, saving themselves money in the process, he elaborated.
“Maybe, companies want to start to reformulate in certain geographies and see what that impact is on end consumer demand. Artificial intelligence with forecasting solutions can really help you understand what that impact is,” Gregorchik noted.
Scenario planning: Preparing for whatever comes next
CPG companies seeking to get ahead of future regulations should conduct routine scenario and contingency planning sessions that bring together different company stakeholders — research and development, marketing, sales, etc. — to predict what an ingredient change would mean for their bottom line.
Blue Yonder offers supply chain and demands planning tools, powered by AI, that allows stakeholders to run what-if scenarios and run scenarios that could impact their supply chain, the company shared.
Reformulations are “not just a supply chain problem. It is a product formulation problem. It is a brand-management problem. It is a sales problem. It is a procurement problem. It is all of the above. And that is where having a tightly bound integrated business planning solution really brings everyone together, so that way everyone is not working in silos,” Gregorchik elaborated.
