The clock is ticking for manufacturers to remove synthetic colors from their foods and beverages by upcoming, aggressive deadlines after FDA announced a “mutual understanding” last April with CPG leaders to voluntarily phase out petroleum-based dyes.
But replacing those dyes isn’t simple. Natural colors often depend on crops, temperamental growing seasons and fragile supply chains that place pressure on availability, cost and performance.
Now, a new wave of companies is trying to change that by using fermentation to produce colors in entirely different ways.
One of them is Michroma, a biotech startup using fungi and fermentation to produce high-performance natural colors, and the winner of this year’s Global Food Tech Award Americas heat, announced at Future Food-Tech in San Francisco.
Rush to replace synthetic dyes reveals limits of natural alternatives
As manufacturers work to meet these deadlines, the limitations of natural color supply are becoming increasingly clear.
Eager to meet consumer demand for natural dyes and comply with state regulations restricting the sale of products with synthetic alternatives, many companies pledged to replace petroleum-based dyes by the end of 2027 or earlier.
”But, there is a challenge,” said Michroma Co-founder and CEO Ricky Cassini.
“That challenge is mainly regarding the supply,” he explained. “Right now, we are sourcing natural dyes from agriculture. Some of the dyes come from insects that they grow in a little desert in Peru, so they are very hard to source.”
Complicating the matter more, companies often need upwards of 50 to 100 times more natural dye than synthetic versions to reach the same saturation or color, he added.
As supply becomes constrained by increased demand, Cassini said he expects the price of natural dyes to increase.
A new way to create natural dyes
But meeting that demand in a way that keeps costs down for manufacturers requires more than shifting sources, it requires rethinking how colors are produced altogether.
“We are making food dyes in a better way, in a much more scalable way, through precision fermentation of filamentous fungi, or mushrooms,” said Cassini.
The company used CRISPR gene editing technology to create proprietary, non-GMO industrial strains of filamentous fungi that naturally produce a target color with superior yield and performance. Using low-cost feedstocks in bioreactors, the fungi secrete colors into the media where they grow. And, unlike algae, which is used to make blue colors, Michroma’s fungi strains don’t need color to grow.
“We started with the red color that is more pH and thermal stable, so it’s better when compared to current natural solutions,” he explained. “But that’s just the start. It’s the MVP of the platform, but we’re developing a wide diversity of colors.”
By creating a red color that is more pH and thermal stable than existing natural colors, Michroma is addressing a significant pain point for food and beverage manufacturers: Performance.
“Plant-based colors are great for some applications, but they also have some challenges,” Cassini explained. For example, beet root or natural dyes can exhibit off notes or fade to brown when they are heated.
“Our colorant is thermal stable, so it can go through pasteurization, cooking, baking and even extrusion processes,” Cassini said.
He added manufacturers only need a fraction of Michroma’s colorant compared to beet root and other natural options to obtain the same or better result.
Likewise, “there are a lot of advantages in terms of supply chain. We don’t depend on climate conditions, we use just a fraction of water, land and carbon emissions,” he said.
Overcoming scaling challenges
But even with technical advantages, scaling fermentation-based production remains a major hurdle.
“When scaling up fermented colors – as with any fermentation company – we depend on CapEx,” and it is very hard to raise sufficient funds to build a plant that might cost upwards of $200 million, Cassini said.
“So, the only way to afford producing these dyes is through partnerships,” like the one Michroma struck with South Korea’s CJ CheilJedang that was announced last September, he said. “CJ is one of the largest fermentation companies in the world that will produce our colorant at commercial scale” to meet market demand.
And that demand is growing – fast.
“Right now the market for natural dyes is around $2 billion, but there is another billion that is going to convert from synthetic to natural,” and that is not a one-to-one transition given significantly more natural colorant is needed to create the same impact as synthetic dyes, Cassini explained.
Awards offer validation and competitive edge
In the race to seize this potential, color companies need every competitive edge – and one that sets Michroma is a slew of recent awards – including FoodNavigator’s Global Food-Tech Awards announced last week at the Future Food-Tech summit in San Francisco.
This honor followed quick on the heels of several other awards, including the iFAB Kraft Heinz Innovation award, announced earlier this month, and the Future is Fungi award, revealed in January.
“Winning these awards is super important to us because it gives us recognition, validation” and a marketing edge, Cassini said. “We go through a due diligence process to win these awards and we compete with the best companies in the world.”
He added, the awards also are a way to “connect with the big companies that pay attention to the innovations that we are creating.”
Checking regulatory boxes
But turning that opportunity into reality will depend not only on innovation, but on regulatory progress and the ability to scale production.
“Our only bottleneck right now is regulations,” Cassini said.
He explained that Michroma is in the process of filing a color additive petition to FDA, which is more rigorous than the Generally Recognized As Safe, or GRAS, process.
While filing a color additive petition is time consuming, Cassini is optimistic, noting that FDA announced it is fast tracking the approval of new natural dyes to help companies phase out synthetic colors.
“So,” he concluded, “I foresee that eventually most of the market is going to come through fermentation, and there is potential to develop other ingredients as well, not only a red color, but the rest of the colors that we need in nature and also in the future, flavors, fragrances, and many other ingredients that are really high value and high margin, low inclusion level ingredients as well.”
As food companies race to meet reformulation deadlines, solutions like fermentation could play a key role in reshaping how ingredients are made – and how supply chains evolve.
For companies like Michroma, the challenge now is scaling fast enough to meet the moment.
